Document:

ex3-1.htm

Exhibit 3.1

BY-LAWS

of

WATTS WATER TECHNOLOGIES, INC.

Amended and Restated as of July 12, 2010

  

  

  

ARTICLE I

Stockholders

Section 1.  Annual Meeting.  The annual meeting of stockholders shall be held at the hour, date and place within or without the United States which is fixed by the Board of Directors or the Chairman of the Board, which hour, date and place may subsequently be changed at any time by vote of the Board of Directors.  If no annual meeting has been held for a period of thirteen months after the Corporation's last annual meeting of stockholders, a special meeting in lieu thereof may be held, and such special meeting shall have, for the purposes of these By-laws or otherwise, all the force and effect of an annual meeting.  Any and all references hereafter in these By-laws to an annual meeting or annual meetings also shall be deemed to refer to any special meeting(s) in lieu thereof.

Section 2.  Matters to be Considered at Annual Meeting.  At an annual meeting of stockholders, only such business shall be conducted, and only such proposals shall be acted upon, as shall have been properly brought before the annual meeting (a) by, or at the direction of, the Board of Directors or a designated committee thereof or (b) by any holder of record (both as of the time notice of such proposal is given by the stockholder as set forth below and as of the record date for the annual meeting in question) of any shares of capital stock of the Corporation entitled to vote at such annual meeting who complies with the procedures set forth in this Section 2 (or, with respect to nominations of candidates for election as Directors, as set forth in Section 3 of Article II hereof).  In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a holder of record of any shares of capital stock entitled to vote at such annual meeting, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation as set forth in this Section 2 and such stockholder or his representative must be present at the annual meeting.  To be timely, a stockholder's notice must be delivered to, or mailed to and received at, the principal executive offices of the Corporation (a) not less than 75 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders (the "Anniversary Date") or (b) in the event that the annual meeting of stockholders is called for a date more than 10 days prior to the Anniversary Date, not later than the close of business on (i) the 20th day (or if that day is not a business day of the Corporation, on the next succeeding business day) following the first date on which the date of such meeting was publicly disclosed or (ii) if such date of public disclosure occurs more than 75 days prior to such scheduled date of such meeting, then the later of (1) the 20th day (or if that day is not a business day for the Corporation, on the next succeeding business day) following the first date of public disclosure or (2) the 75th day prior to such scheduled date of such meeting (or if that day is not a business day for the Corporation, on the next succeeding business day).  Any public disclosure of the scheduled date of the meeting made by the Corporation by means of a press release, a report or other document filed with the Securities and Exchange Commission, or a letter or report sent to stockholders of record of the Corporation, shall be deemed to be sufficient public disclosure of the date of such meeting for purposes of these By-laws.

  

  

  

A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the Corporation's stock transfer books, of the stockholder proposing such business and of the beneficial owners (if any) of the stock registered in such stockholder's name and the name and address of other stockholders known by such stockholder to be supporting such proposal on the date of such stockholder's notice, (c) the class and number of shares of the Corporation's capital stock which are held of record, beneficially owned or represented by proxy by the stockholder and by any other stockholders known by such stockholder to be supporting such proposal on the record date for the annual meeting in question (if such date shall then have been made publicly available) and on the date of such stockholder's notice, and (d) any material interest of the stockholder in such proposal.

If the Board of Directors, or a designated committee thereof, determines that any stockholder proposal was not timely made in accordance with the provisions of this Section 2, or that the information provided in a stockholder's notice does not satisfy the informational requirements of this Section 2 in any material respect, then such proposal shall not be presented for action at the annual meeting in question.  If neither the Board of Directors nor such committee makes a determination as to the validity of any stockholder proposal, the presiding officer of the annual meeting shall determine and declare at the annual meeting whether the stockholder proposal was made in accordance with the terms of this Section 2.  If the presiding officer determines that a stockholder proposal was made in accordance with the terms of this Section 2, he shall so declare at the annual meeting and ballots shall be provided for use at the meeting with respect to any such proposal.  If the presiding officer determines that a stockholder proposal was not made in accordance with the terms of this Section 2, he shall so declare at the annual meeting and any such proposal shall not be acted upon at the annual meeting.

The provisions of this By-law shall not prevent the consideration and approval or disapproval at the annual meeting of reports of officers, Directors and committees of the Board of Directors, but in connection with such reports, no new business shall be acted upon at such annual meeting unless stated, filed and received as herein provided.

Notwithstanding the foregoing provisions of this By-law, a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations thereunder with respect to the matters set forth in this By-law.  Nothing in this By-law shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.

Section 3.  Special Meetings.  Except as otherwise required by law, special meetings of the stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution approved by the affirmative vote of a majority of the Directors then in office or the Chairman of the Board.

  

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Section 4.  Matters to be Considered at Special Meetings.  Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the Corporation, unless otherwise provided by law.

Section 5.  Notice of Meetings; Adjournments.  A written notice of each annual meeting of stockholders stating the place, date and hour of such annual meeting shall be given by the Secretary (or other person authorized by these By-laws or by law) not less than 10 days nor more than 60 days before the meeting, to each stockholder entitled to vote thereat and to each stockholder who, by law or under the Restated Certificate of Incorporation or under these By-laws, is entitled to such notice, by delivering such notice to him or by mailing it, postage prepaid, and addressed to such stockholder at the address of such stockholder as it appears in the records of the Corporation.  Such notice shall be deemed to be delivered when hand delivered to such address or deposited in the mail so addressed, with postage prepaid.

Notice of all special meetings of stockholders shall be given in the same manner as provided for annual meetings of the stockholders, except that the written notice of all special meetings shall state the purpose or purposes for which the meeting has been called.

Notice of an annual or special meeting of stockholders need not be given to a stockholder if a written waiver of notice is executed before or after such meeting by such stockholder or such stockholder's authorized attorney, if communication with such stockholder is unlawful, or if such stockholder attends such meeting, unless such attendance was for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice.

The Board of Directors may postpone and reschedule any previously scheduled annual or special meeting of stockholders and any record date with respect thereto, regardless of whether any notice or public disclosure with respect to any such meeting has been sent or made pursuant to Section 2 of this Article I or Section 3 of Article II hereof or otherwise.  When any meeting is convened, the presiding officer may adjourn the meeting if (a) no quorum is present for the transaction of business, (b) the Board of Directors determines that adjournment is necessary or appropriate to enable the stockholders to consider fully information which the Board of Directors determines has not been made sufficiently or timely available to stockholders, or (c) the Board of Directors determines that adjournment is otherwise in the best interests of the Corporation.  When any annual or special meeting of stockholders is adjourned to another hour, date or place, notice need not be given of the adjourned meeting other than an announcement at the meeting at which the adjournment is taken of the hour, date and place to which the meeting is adjourned; provided, however, that if the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote thereat and each stockholder who, by law or under the Restated Certificate of Incorporation or these By-laws, is entitled to such notice.

  

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Section 6.  Quorum.  At any annual or special meeting of stockholders, the holders of a majority of the voting power of all classes of stock issued, outstanding and entitled to vote at such meeting, represented in person or by proxy, shall constitute a quorum at such meeting; but if less than a quorum is present at such meeting, the holders of a majority of the voting power of all classes of stock issued, outstanding and entitled to vote at such meeting that are present in person or by proxy at such meeting or the presiding officer may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice, except as provided in Section 5 of this Article I.  At such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally noticed.  The stockholders present at a duly constituted meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

Section 7.  Voting and Proxies.  The voting power of each share of capital stock of the Corporation shall be as set forth in the Restated Certificate of Incorporation, with a proportionate vote for each fraction of any share.  Stockholders may vote either in person or by written proxy, but no proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.  Proxies shall be filed with the Secretary of the meeting before being voted.  Except as otherwise limited therein or as otherwise provided by law, proxies shall entitle the persons authorized thereby to vote at any adjournment of such meeting, but they shall not be valid after final adjournment of such meeting.  A proxy with respect to stock held in the name of two or more persons shall be valid if executed by or on behalf of any one of them unless at or prior to the exercise of such proxy the Corporation receives a specific written notice to the contrary from any one of them.  A proxy purporting to be executed by or on behalf of a stockholder shall be deemed valid, and the burden of proving invalidity shall rest on the challenger.

Section 8.  Action at Meeting.  When a quorum is present, any matter before any annual or special meeting of stockholders shall be decided by vote of the holders of all classes of stock present in person or by proxy representing a majority of the votes of all classes of stock entitled to be cast at the meeting, except where a larger vote is required by law, by the Restated Certificate of Incorporation or by these By-laws.  Any election by stockholders shall be determined by a plurality of the votes of all classes of stock cast, except where a larger vote is expressly required by law, by the Restated Certificate of Incorporation or by these By-laws.  The Corporation shall not directly or indirectly vote any shares of its own stock; provided, however, that the Corporation may vote shares which it holds in a fiduciary capacity to the extent permitted by law.

Section 9.  Action by Consent.  Any action required or permitted by law to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

  

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Section 10.  Stockholder Lists.  The Secretary (or the Corporation's transfer agent or other person authorized by these By-laws or by law) shall prepare and make, at least 10 days before every annual or special meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares of each class of stock registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the hour, date and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 11.  Presiding Officer.  The Chairman of the Board, or in his absence, the President, shall preside at all annual or special meetings of stockholders and shall have the power, among other things, to adjourn such meeting at any time and from time to time, subject to Sections 5 and 6 of this Article I.  The order of business and all other matters of procedure at any meeting of the stockholders shall be determined by the presiding officer.

Section 12.  Voting Procedures and Inspectors of Elections.  The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof.  The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act.  If no inspector or alternate is able to act at a meeting of stockholders, the presiding officer shall appoint one or more inspectors to act at the meeting.  Any inspector may, but need not, be an officer, employee or agent of the Corporation.  Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his ability.  The inspectors shall perform such duties as are required by the Delaware General Corporation Law, as amended from time to time, including the counting of all votes and ballots.  The inspectors may, with the approval of the presiding officer, appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.  The presiding officer may review all determinations made by the inspector(s), and in so doing the presiding officer shall be entitled to exercise his sole judgment and discretion and he shall not be bound by any determinations made by the inspector(s).  All determinations by the inspector(s) and, if applicable, the presiding officer shall be subject to further review by any court of competent jurisdiction.

  

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ARTICLE II

Directors

Section 1.  Powers.  All the power of the Corporation shall be exercised by or under the direction of the Board of Directors except as otherwise provided by the Restated Certificate of Incorporation or as required by law.  In the event of a vacancy in the Board of Directors, the remaining Directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled.

Section 2.  Number; Election; Qualification.  The Board of Directors shall consist of not more than fifteen (15) nor less than three (3) members.  The exact number of Directors within the maximum and minimum limitations specified herein may be fixed from time to time by resolution of a majority of the Board of Directors then in office or by the stockholders at the annual meeting of stockholders.  The Directors shall be elected by the stockholders at each annual meeting, except as provided in Section 5 of this Article II.  No Director need be a stockholder.

Section 3.  Director Nominations.  Nominations of candidates for election as Directors of the Corporation at any annual meeting of stockholders may be made (a) by, or at the direction of, a majority of the Board of Directors or a designated committee thereof, or (b) by any holder of record (both as of the time notice of such nomination is given by the stockholder as set forth below and as of the record date for the annual meeting in question) of any shares of the capital stock of the Corporation entitled to vote at such annual meeting who complies with the procedures set forth in this Section 3.  Any stockholder who seeks to make such a nomination, or his representative, must be present in person at the annual meeting.  Only persons nominated in accordance with the procedures set forth in this Section 3 shall be eligible for election as Directors at an annual meeting of stockholders.

Nominations, other than those made by, or at the direction of, the Board of Directors or a designated committee thereof, shall be made pursuant to timely notice in writing to the Secretary of the Corporation as set forth in this Section 3.  To be timely, a stockholder's notice shall be delivered to, or mailed and received, at the principal executive offices of the Corporation (a) not less than 75 days nor more than 120 days prior to the Anniversary Date or (b) in the event that the annual meeting of stockholders is called for a date more than seven days prior to the Anniversary Date, not later than the close of business on (i) the 20th day (or if that day is not a business day for the Corporation, on the next succeeding business day) following the first date on which the date of such meeting was publicly disclosed or (ii) if such date of public disclosure occurs more than 75 days prior to such scheduled date of such meeting, then the later of (1) the 20th day (or if that day is not a business day for the Corporation, on the next succeeding business day) following the first date of public disclosure of the date of such meeting or (2) the 75th day prior to such scheduled date of such meeting (or if that day is not a business day for the Corporation, on the next succeeding business day).  Any public disclosure of the scheduled date of the meeting made by the Corporation by means of a press release, a report or other document filed with the Securities and Exchange Commission, or a letter or report sent to stockholders of record of the Corporation, shall be deemed to be sufficient public disclosure of the date of such meeting for purposes of these By-laws.

  

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Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director (i) the name, age, business address and residential address of such person, (ii) the principal occupation or employment of such person during the past five years, (iii) the class and number of shares of the Corporation's capital stock which are beneficially owned by such person on the date of such stockholder notice, (iv) a description of any of the following events that has occurred within the last five years and that is material to the evaluation of the ability or integrity of such proposed nominee:  (1) a petition under federal bankruptcy laws or any state insolvency laws was filed by or against such person, (2) a conviction of such person in a criminal proceeding or the naming of such person as a subject of a criminal proceeding (excluding traffic violations and other minor offenses), (3) a finding by any court of competent jurisdiction that such person has violated any federal or state securities law or federal commodities law, which judgment or finding has not been subsequently reversed, suspended or vacated, or (4) the entry of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or of any federal or state governmental or quasi-governmental agency, authority or commission enjoining such person or otherwise limiting him from engaging in any type of business practice or in any activity in connection with the purchase or sale of any security or commodity, and (v) the consent of each nominee to serve as a Director if so elected and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the Corporation's stock transfer books, of such stockholder and of the beneficial owners (if any) of the stock registered in such stockholder's name and the name and address of other stockholders known by such stockholder to be supporting such nominee or nominees, (ii) the class and number of shares of the Corporation's capital stock which are beneficially owned by such stockholder and such beneficial owners (if any) on the date of such stockholder's notice and by any other stockholders known by such stockholder to be supporting such nominee or nominees on the date of such stockholder's notice, (iii) a representation that the stockholder or his representative intends to appear in person at the meeting to nominate the person or persons specified in the notice, (iv) a description of all arrangements or understandings between such stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by such stockholders; provided, that nothing in this Section 3 shall require the stockholder giving such notice to provide to the Corporation copies of such stockholder's preliminary or definitive proxy, proxy statement, or other soliciting material filed with the Securities and Exchange Commission.  At the request of the Board of Directors, any person nominated by, or at the direction of, the Board of Directors for election as a Director at an annual meeting shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to such nominee.

No person shall be elected by the stockholders as a Director of the Corporation unless nominated in accordance with the procedures set forth in this Section 3.  Election of Directors at the annual meeting need not be by written ballot, unless otherwise provided by the Board of Directors or presiding officer at such annual meeting.  If written ballots are to be used, ballots bearing the names of all the persons who have been nominated for election as Directors at the annual meeting in accordance with the procedures set forth in this Section 3 shall be provided for use at the annual meeting.

  

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If the Board of Directors, or a designated committee thereof, determines that any stockholder nomination was not timely made in accordance with the terms of this Section 3 or that the information provided in a stockholder's notice does not satisfy the informational requirements of this Section 3 in any material respect, then such nomination shall not be considered at the annual meeting in question.  If neither the Board of Directors nor such committee makes a determination as to the validity of any nominations by a stockholder as set forth above, the presiding officer of the annual meeting shall determine and declare at the annual meeting whether a nomination was made in accordance with the terms of this Section 3.  If the presiding officer determines that a nomination was made in accordance with the terms of this Section 3, he shall so declare at the annual meeting and ballots shall be provided for use at the meeting with respect to such nomination.  If the presiding officer determines that a nomination was not made in accordance with the terms of this Section 3, he shall so declare at the annual meeting and such nomination shall be disregarded.

Section 4.  Tenure.  Except as otherwise provided by law, by the Restated Certificate of Incorporation or by these By-laws, Directors shall hold office until the next annual meeting of stockholders and until their successors are elected and qualified or until their earlier resignation or removal.

Section 5.  Vacancies.  Any vacancy occurring on the Board of Directors, including any vacancy resulting from death, resignation, retirement, disqualification, removal or other cause or created by reason of an increase in the authorized number of Directors shall be filled by the affirmative vote of a majority of the remaining Directors then in office, even if such majority is less than a quorum of the Board of Directors.  Any Director appointed in accordance with the preceding sentence shall hold office subject to the provisions of these By-laws until the next annual meeting of stockholders and until such Director's successor is elected and qualified or until such Director resigns or is removed.  In the event of a vacancy in the Board of Directors, the remaining Directors, except as otherwise provided by law, may exercise the powers of the full Board of Directors until the vacancy is filled.

Section 6.  Removal.  Any Director (including persons elected by Directors to fill vacancies in the Board of Directors) or the entire Board of Directors may be removed with or without cause by the affirmative vote of the holders of at least a majority of the voting power of the shares of the Corporation then entitled to vote at an election of Directors, voting together as a single class.  Any Director may be removed for cause by vote of a majority of the Directors then in office.  A Director may be removed for cause only after reasonable notice and opportunity to be heard before the body proposing to remove him.

  

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Section 7.  Resignation.  A Director may resign at any time by giving written notice to the Chairman of the Board, the President or the Secretary.  A resignation shall be effective upon receipt, unless the resignation otherwise provides.

Section 8.  Regular Meetings.  The regular annual meeting of the Board of Directors shall be held, without other notice than this By-law, on the same date and at the same place as the annual meeting of stockholders following the close of such meeting of stockholders.  Other regular meetings of the Board of Directors may be held without call or notice at such hour, date and place as the Board of Directors may from time to time determine.

Section 9.  Special Meetings.  Special meetings of the Board of Directors may be called, orally or in writing, by or at the request of the Chairman of the Board, the Treasurer, or two or more Directors designating the hour, date and place thereof.

Section 10.  Notice of Special Meetings.  Notice of the hour, date and place of all special meetings of the Board of Directors shall be given to each Director by the Secretary or an Assistant Secretary, or in case of the death, absence, incapacity or refusal of such persons, by the President.  Notice of any special meeting of the Board of Directors shall be given to each Director in person or by telephone, telex, telecopy or other written form of electronic communication, or by telegram sent to his business or home address at least 24 hours in advance of the meeting, or by written notice mailed to his business or home address at least 48 hours in advance of the meeting.  Such notice shall be deemed to be delivered when hand delivered to such address, read to such Director by telephone, deposited in the mail so addressed, with postage thereon prepaid if mailed, dispatched or transmitted if telexed or telecopied, or when delivered to the telegraph company if sent by telegram.

When any Board of Directors meeting, either regular or special, is adjourned for 30 days or more, notice of the adjourned meeting shall be given as in the case of an original meeting.  It shall not be necessary to give any notice of the hour, date or place of any meeting adjourned for less than 30 days or of the business to be transacted thereat, other than an announcement at the meeting at which such adjournment is taken of the hour, date and place to which the meeting is adjourned.

A written waiver of notice executed before or after a meeting by a Director and filed with the records of the meeting shall be deemed to be equivalent to notice of the meeting.  The attendance of a Director at a meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because such meeting is not lawfully called or convened.  Except as otherwise required by law, by the Restated Certificate of Incorporation or by these By-laws, neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

  

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Section 11.  Quorum.  At any meeting of the Board of Directors, a majority of the Directors then in office shall constitute a quorum for the transaction of business, but if less than a quorum is present at a meeting, a majority of the Directors present may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice, except as provided in Section 10 of this Article II.  Any business which might have been transacted at the meeting as originally noticed may be transacted at such adjourned meeting at which a quorum is present.

Section 12.  Action at Meeting.  At any meeting of the Board of Directors at which a quorum is present, a majority of the Directors present may take any action on behalf of the Board of Directors, unless a larger number is required by law, by the Restated Certificate of Incorporation or by these By-laws.

Section 13.  Action by Consent.  Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing.  Such written consent shall be filed with the records of the meetings of the Board of Directors and shall be treated for all purposes as a vote at a meeting of the Board of Directors.

Section 14.  Manner of Participation.  Directors may participate in meetings of the Board of Directors by means of conference telephone or similar communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these By-laws.

Section 15.  Chairman of the Board.  The Chairman of the Board shall, subject to the direction of the Board of Directors, have general supervision and control of its business.  The Chairman of the Board shall preside, when present, at all meetings of the Board of Directors, unless the Board of Directors shall otherwise provide, and at meetings of the stockholders as provided in Section 11 of Article I hereof.  The Chairman is not an officer of the Corporation.

Section 16.  Committees.  The Board of Directors, by vote of a majority of the Directors then in office, may elect from its number one or more committees, including an Executive Committee and an Audit Committee, and may delegate thereto some or all of its powers except those which by law, by the Restated Certificate of Incorporation, or by these By-laws may not be delegated.  Except as the Board of Directors may otherwise determine, any such committee may make rules for the conduct of its business, but unless otherwise provided by the Board of Directors or in such rules, its business shall be conducted so far as possible in the same manner as is provided by these By-laws for the Board of Directors.  All members of such committees shall hold such offices at the pleasure of the Board of Directors.  The Board of Directors may abolish any such committee at any time.  Any committee to which the Board of Directors delegates any of its powers or duties shall keep records of its meetings and shall report its action to the Board of Directors.  The Board of Directors shall have power to rescind any action of any committee, but no such rescission shall have retroactive effect.

  

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Section 17.  Director Emeritus.  The Board of Directors may by resolution appoint any former Director who has retired from the Board of Directors as a Director Emeritus.  Directors Emeriti may be invited to attend meetings of the Board of Directors or any committee of the Board of Directors; however, they shall not have the right to vote and they shall be excluded from the number of Directors for quorum and other purposes.  Directors Emeriti shall be appointed for one-year terms and may be reappointed for an unlimited number of additional one-year terms.

ARTICLE III

Officers

Section 1.  Enumeration.  The officers of the Corporation shall consist of a President, a Secretary, a Treasurer, and such other officers, including without limitation one or more Executive Vice Presidents, Vice Presidents, Assistant Secretaries and Assistant Treasurers, as the Board of Directors may determine.

Section 2.  Election.  At the regular annual meeting of the Board of Directors following the annual meeting of stockholders, the Board of Directors shall elect the President, the Secretary, and the Treasurer.  Other officers may be elected by the Board of Directors at such regular annual meeting or at any other regular or special meeting.

Section 3.  Qualification.  No officer need be a stockholder or a Director.  Any person may occupy more than one office of the Corporation at any time.  Any officer may be required by the Board of Directors to give bond for the faithful performance of his duties in such amount and with such sureties as the Board of Directors may determine.

Section 4.  Tenure.  Except as otherwise provided by the Restated Certificate of Incorporation or by these By-laws, each officer of the Corporation shall hold office until the regular annual meeting of the Board of Directors following the next annual meeting of stockholders and until such officer's successor is elected and qualified or until such officer's earlier resignation or removal.  Any officer may resign by delivering a written resignation to the Board of Directors, and such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

Section 5.  Removal.  Except as otherwise provided by law, the Board of Directors may remove any officer with or without cause by the affirmative vote of a majority of the Directors then in office.

Section 6.  Vacancies.  Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors.

  

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Section 7.  President.  The President shall be the chief operating officer of the Corporation and shall perform such duties as the Board of Directors or the Chairman of the Board may from time to time determine.  In the absence of the Chairman of the Board, the President shall preside, when present, at meetings of the Board of Directors, unless the Board of Directors shall otherwise provide, and at meetings of the stockholders as provided in Section 11 of Article I hereof.

Section 8.  Executive Vice Presidents; Vice Presidents.  Any Executive Vice President or Vice President shall have such powers and shall perform such duties as the Board of Directors, the Chairman of the Board or the President may from time to time designate.

Section 9.  Treasurer and Assistant Treasurers.  The Treasurer shall, subject to the direction of the Board of Directors, have general charge of the financial affairs of the Corporation and shall cause to be kept accurate books of account.  He shall have custody of all funds, securities, and valuable documents of the Corporation, except as the Board of Directors may otherwise provide.

Any Assistant Treasurer shall have such powers and perform such duties as the Board of Directors may from time to time designate.

Section 10.  Secretary and Assistant Secretaries.  The Secretary shall record all the proceedings of the meetings of the stockholders and the Board of Directors (including committees of the Board) in books kept for that purpose.  In his absence from any such meeting, a temporary secretary chosen at the meeting shall record the proceedings thereof.  The Secretary shall have charge of the stock ledger (which may, however, be kept by any transfer or other agent of the Corporation).  He shall have custody of the seal of the Corporation, and he, or an Assistant Secretary, shall have authority to affix it to any instrument requiring it, and, when so affixed, the seal may be attested by his signature or that of an Assistant Secretary.  He shall have such other duties and powers as may be designated from time to time by the Board of Directors, the Chairman of the Board or the President.

Any Assistant Secretary shall have such powers and perform such duties as the Board of Directors may from time to time designate.

Section 11.  Other Powers and Duties.  Subject to these By-laws and to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors.

Section 12.  Compensation.  The compensation of the officers of the Corporation shall be fixed from time to time by the Board of Directors; provided, however, that the Board of Directors may authorize any officer or committee to fix the compensation of officers and employees.  No officer shall be prevented from receiving compensation by reason of the fact that such officer is also a Director of the Corporation.

  

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ARTICLE IV

Capital Stock

Section 1.  Certificates of Stock.  Shares of the capital stock of the Corporation may be certificated or uncertificated, as provided under the General Corporation Law of the State of Delaware.  Each stockholder, upon written request to the transfer agent or registrar of the Corporation, shall be entitled to a certificate of the capital stock of the Corporation in such form as may from time to time be prescribed by the Board of Directors.  Such certificate shall bear the Corporation seal and shall be signed by the Chairman of the Board of the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary.  The Corporation seal and the signatures by corporation officers may be facsimiles if the certificate is manually countersigned by an authorized person on behalf of a transfer agent or registrar other than the Corporation or its employee.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer, transfer agent or registrar were such officer, transfer agent or registrar at the time of its issue.  Every certificate for shares of stock which are subject to any restriction on transfer and every certificate issued when the Corporation is authorized to issue more than one class or series of stock shall contain such legend with respect thereto as is required by law.  The Corporation shall be permitted to issue fractional shares.

Section 2.  Transfers.  Subject to any restrictions on transfer and unless otherwise provided by the Board of Directors, shares of stock may be transferred only on the books of the Corporation, if such shares are certificated, by the surrender to the Corporation or its transfer agent of the certificate therefore properly endorsed or accompanied by a written assignment or power of attorney properly executed, with transfer stamps (if necessary) affixed, or upon proper instructions from the holder of uncertificated shares, in each case with such proof of the authenticity of signature as the Corporation or its transfer agent may reasonably require.

Section 3.  Record Holders.  Except as may otherwise be required by law, by the Restated Certificate of Incorporation or by these By-laws, the Corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock, until the shares have been transferred on the books of the Corporation in accordance with the requirements of these By-laws.

It shall be the duty of each stockholder to notify the Corporation of his, her or its post office address and any changes thereto.

  

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Section 4.  Record Date.  In order that the Corporation may determine the stockholders entitled to receive notice of or to vote at any meeting of stockholders or any adjournments thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which, (i) with respect to any meeting of stockholders, shall be not more than 60 nor less than 10 days (except as otherwise required by law) before the date of such meeting, (ii) with respect to corporate action without a meeting, shall be not more than 10 days after the date on which the resolution fixing the record date is adopted by the Board of Directors and (iii) with respect to any other lawful action, shall be not more than 60 days prior to such action.  In such case, only stockholders of record on such record date shall be so entitled, notwithstanding any transfer of stock on the books of the Corporation after the record date.

If no record date is fixed:  (i) the record date for determining stockholders entitled to receive notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed; and (iii) the record date for determining

stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 5.  Replacement of Certificates.  In case of the alleged loss, destruction or mutilation of a certificate of stock, a duplicate certificate may be issued in place thereof, upon such terms as the Board of Directors may prescribe, provided, however, that if such shares have ceased to be certificated, a new certificate shall be issued only upon written request to the transfer agent or registrar of the Corporation.

ARTICLE V

Indemnification of Directors, Officers and Others

Section 1.  Indemnifiable Events; Extent of Indemnification.

(a)             The Corporation shall indemnify, to the fullest extent permitted by the General Corporation Law of the State of Delaware (as presently in effect or as hereafter amended):

(i)             Any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action or suit by or in the right of the Corporation) by reason of the fact that he is or was a Director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably

  

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incurred by him in connection with such suit, action or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.  The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that his conduct was unlawful.

(ii)             Any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a Director or  officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless, and only to the extent that, the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

(iii)             To the extent that a Director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraphs (i) and (ii), or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.

(b)             The Board of Directors, in its discretion, may authorize the Corporation to indemnify:

(i)             Any person who was or is a party or is threatened to be made a party to any threatened pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as a Director or as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in

  

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good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.  The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed tothe best interests of the Corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that his conduct was unlawful.

(ii)             Any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as a employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless, and only to the extent that, the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which the Court of Chancery or such other court shall deem proper.

Section 2.  Determination of Entitlement.  Any indemnification hereunder (unless required by law or ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 of this Article V.  Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders of the Corporation.

Section 3.  Advance Payments.  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, only as authorized by the Board of Directors in the specific case (including by one or more Directors who may be parties to such action, suit or proceeding), upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Article V.

  

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Section 4.  Non-Exclusive Nature of Indemnification.  The indemnification provided herein shall not be deemed exclusive of any other rights to which any person, whether or not entitled to be indemnified hereunder, may be entitled under any statute, by-law, agreement, vote of stockholders or Directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.  Each person who is or becomes a Director or officer as aforesaid shall be deemed to have served or to have continued to serve in such capacity in reliance upon the indemnity provided for in this Article V.

Section 5.  Insurance.  To the extent obtainable, the Corporation may purchase and maintain insurance with reasonable limits on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of the General Corporation Law of the State of Delaware (as presently in effect or hereafter amended), the Restated Certificate of Incorporation of the Corporation or these By-laws.

Section 6.  No Duplicate Payments.  The Corporation's indemnification under Section 1 of this Article V of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be reduced by any amounts such person receives as indemnification (i) under any policy of insurance purchased and maintained on such person's behalf by the Corporation, (ii) from such other Corporation, partnership, joint venture, trust or other enterprise, or (iii) under any other applicable indemnification provision.

Section 7.  Amendment.  This Article V may be amended only so as to have a prospective effect.  Any amendment to this Article V which would result in any person having a more limited entitlement to indemnification may be approved only by the stockholders.

ARTICLE VI

Transactions with Related Parties

Section 1.  Transactions Not Void.  No contract or transaction between the Corporation and one or more of its Directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its Directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the Director or officer is present at or participates in the meeting of the Board of Directors or committee thereof, which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if:

  

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(a)             The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors, or the committee, and the Board of Directors or committee in good faith authorizes the contract or 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 transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

(c)             The contract or 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 stockholders.

Section 2.  Quorum.  Common or interested Directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

Section 3.  Limitation.  Nothing herein contained shall protect or purport to protect any Director or officer of the Corporation against any liability to the Corporation or its security holders to which he would otherwise be subject by reason of his willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office.

ARTICLE VII

Miscellaneous Provisions

Section 1.  Fiscal Year.  Except as otherwise determined by the Board of Directors, the fiscal year of the Corporation shall end on December 31 of each year.

Section 2.  Seal.  The Board of Directors shall have power to adopt and alter the seal of the Corporation.

Section 3.  Execution of Instruments.  All deeds, leases, transfers, contracts, bonds, notes and other obligations to be entered into by the Corporation in the ordinary course of its business without Director action may be executed on behalf of the Corporation by the Chairman of the Board, the President, the Treasurer or any Vice President.

  

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Section 4.  Voting of Securities.  Unless the Board of Directors otherwise provides, the Chairman of the Board, the President or the Treasurer may waive notice of and act on behalf of this Corporation, or appoint another person or persons to act as proxy or attorney in fact for this Corporation with or without discretionary power and/or power of substitution, at any meeting of stockholders or stockholders of any other corporation or organization, any of whose securities are held by this Corporation.

Section 5.  Resident Agent.  The Board of Directors may appoint a resident agent upon whom legal process may be served in any action or proceeding against the Corporation.

Section 6.  Corporate Records.  The original or attested copies of the Restated Certificate of Incorporation, By-laws and records of all meetings of the incorporators, stockholders and the Board of Directors and the stock and transfer records, which shall contain the names of all stockholders, their record addresses and the amount of stock held by each, shall be kept at the principal office of the Corporation, at the office of its counsel, or at an office of its transfer agent.

Section 7.  Restated Certificate of Incorporation.  All references in these By-laws to the Restated Certificate of Incorporation shall be deemed to refer to the Restated Certificate of Incorporation of the Corporation, as amended and in effect from time to time.

Section 8.  Amendments.  These By-laws may be altered, amended or repealed, to the extent permitted by applicable law, the Restated Certificate of Incorporation and agreements to which the Corporation may from time to time be a party, by the affirmative vote of the holders of a majority of the voting power of all classes of the stock of the Corporation then entitled to vote, voting together as a single class, at any regular or special meeting of the stockholders of the Corporation, or by the vote of a majority of the Board of Directors at any regular or special meeting thereof, without any action on the part of the stockholders, unless otherwise provided herein; provided, however, that (i) the Board of Directors may not amend or repeal this Section 8 nor may it amend or repeal any other provision of these By-laws to the extent such amendment or repeal requires action by the stockholders, and (ii) any amendment or repeal of these By-laws by the Board of Directors and any provision to these By-laws adopted by the Board of Directors may be amended or repealed by the stockholders.

	  

  

20Employment Agreement

 Exhibit 10.1 

EMPLOYMENT AGREEMENT 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made by and between STERLING BANCSHARES, INC., a Texas corporation
(“Company”) and J. DOWNEY BRIDGWATER (“Executive”). Capitalized terms used herein without definition shall have the respective meanings set forth in paragraph 7.1. 

W I T N E S S E T H: 

WHEREAS, Company and Executive desire to enter into this Agreement for the purposes, among other things, of providing for the employment
of Executive through June 30, 2013, establishing base and incentive compensation terms, and providing for Executive to receive certain severance benefits in the event that his employment is terminated following a Change of Control under the
conditions set forth herein; 
 WHEREAS, Company is desirous of continuing Executive’s employment as the senior executive
of Company and its wholly-owned subsidiary, STERLING BANK, a banking association chartered by the State of Texas (the “Bank”), on the terms and conditions, and for the consideration, hereinafter set forth and Executive is desirous
of continuing his employment by Company on such terms and conditions and for such consideration; and 
 WHEREAS, references
herein to Executive’s employment by Company shall also mean his employment by the Bank, and references herein to payments or benefits of any nature to be made by Company to Executive shall mean that either Company will make such payments or it
will cause the Bank to make such payments to Executive. 
 NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and obligations contained herein, Company and Executive agree as follows: 
 ARTICLE 1: EMPLOYMENT AND DUTIES 

 1.1 EMPLOYMENT EFFECTIVE DATE. Company agrees to employ Executive and Executive agrees to be employed by Company, beginning
as of the Effective Date (as hereinafter defined) and continuing for the period of time set forth in Article 2 of this Agreement, subject to the terms and conditions of this Agreement. For purposes of this Agreement, the “Effective
Date” shall be July 1, 2010. 
 1.2 POSITION. 

(a) From and after the Effective Date, Company shall employ Executive in the capacity of Chief Executive Officer of both
Company and of the Bank, or in such other positions as the parties mutually may agree. 
 (b) At all times during
the term of this Agreement, Company shall use commercially reasonable efforts to cause Executive to be elected a director of Company and the Bank and to serve on the Executive Committee of Company. If elected, Executive agrees to serve as a director
of Company, the Bank and any one or more of Company’s subsidiaries and to serve on the Executive Committee of the Bank. 
  

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 1.3 DUTIES AND SERVICES. Executive agrees to serve in the capacities referred to in
paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from
time to time. Executive’s employment shall also be subject to the policies maintained and established by Company, as the same may be amended from time to time. 

1.4 OTHER INTERESTS. Executive agrees, during the period of his employment by Company, to devote his primary business time, energy and
best efforts to the business and affairs of Company and Bank and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors of Company (the
“Board of Directors”). However, Executive shall have the right to participate in the following activities so long as they do not conflict with the business and affairs of Company or interfere with Executive’s performance of his
duties hereunder: (i) engaging in and managing passive personal investments and other business activities, and (ii) serving on civic, religious, educational and/or charitable boards or committees. 

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT 

2.1 TERM. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executive for the period beginning on
the Effective Date and ending on June 30, 2013 (the “Employment Term”). Upon expiration of the Employment Term, Executive shall become an “at will” employee and either Company or Executive may terminate
Executive’s employment by Company with or without cause and with or without notice. 
 2.2 COMPANY’S RIGHT TO
TERMINATE. Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive’s employment under this Agreement at any time for any of the following reasons: 

(a) upon Executive’s death; 

(b) upon Executive’s becoming Disabled; 

(c) for Cause; or 

(d) for any other reason whatsoever, in the sole discretion of the Board of Directors. 

2.3 EXECUTIVE’S RIGHT TO TERMINATE. Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his
employment under this Agreement at any time for any of the following: 
 (a) Good Reason; or 

(b) for any other reason whatsoever, in the sole discretion of Executive, provided Executive delivers written notice to
Company at least six (6) months’ prior to the effective date of Executive’s termination of his employment, unless Company and Executive mutually agree to a shorter notice period. 

 

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 2.4 NOTICE OF TERMINATION. If Company or Executive desires to terminate Executive’s
employment hereunder at any time prior to expiration of the Employment Term, it or he shall do so by giving written notice to the other party that it or he has elected to terminate Executive’s employment hereunder and stating the effective date
and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder, including, without limitation, the provisions of Articles 4 and 5 hereof. 

ARTICLE 3: COMPENSATION AND BENEFITS 

3.1 BASE SALARY. During the Employment Term, Executive shall receive an annual base salary of not less than $610,500. Executive’s
annual base salary shall be paid in equal installments in accordance with Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly. The Human Resources Program Committee of Company or any
successor committee with responsibility for executive compensation (the “HR Committee”) shall review Executive’s Base Salary on an annual basis. For purposes of this Agreement, “Base Salary” shall mean
Executive’s initial annual base salary and, if increased, the increased annual base salary. During any period that Executive is receiving benefits under Company’s Long Term Disability Plan, Company shall only be obligated to pay Base
Salary to Executive in an amount equal to the excess, if any, of the after-tax value of the Base Salary over the after-tax value of the disability benefits being received by Executive. 

3.2 BONUSES. Executive shall receive annual performance-based bonuses upon the achievement of certain performance results described on
Exhibit A. The annual performance bonus shall be paid in cash or Bonus Shares, as designated by Executive at the time each performance-based bonus is paid, and shall be determined and paid not later than March 15 of the year following
the year in respect of which the annual performance bonus is being determined. Bonuses paid pursuant to this section shall be in lieu of any bonuses to which Executive may have been entitled to pursuant to Company’s short-term incentive
program. 
 In the event that Executive receives a payment of performance-based cash bonuses under this Section and Company
subsequently (i) determines that it must file a formal restatement of its previously filed financial statements with the Securities and Exchange Commission, and (ii) as a result of the restatement the Board makes a formal determination
that some portion of Executive’s performance based cash bonuses should not have been paid due to a change in actual performance results based on such restatement, then Company and Executive agree that the provisions of this paragraph shall
apply. The Board shall be authorized to (i) recalculate Executive’s performance-based cash bonuses for the current and any prior period, and (ii) determine the amount of any excess cash bonus payments paid to Executive during such
prior period. Executive shall immediately deliver to Company, upon demand, an amount in cash equal to any excess bonus payments paid by Company to Executive, as adjusted for taxes. In the event such amount is not immediately delivered to Company,
Company may offset such payment obligation against any other payments from Company that Executive is entitled to receive under this Agreement or any other agreement or arrangement with Company. Nothing in this Section shall be deemed to limit
Company’s rights against Executive for any conduct which resulted in the formal restatement or formal determination described herein in any action at law or in equity. 

 

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 3.3 EQUITY INCENTIVES. 

(a) Effective as of July 1, 2010, Executive is awarded 187,500 Performance Restricted Share Units
(“PRSUs”). As of the Effective Date, none of the PRSUs are vested. If Executive is continuously employed by Company from the Effective Date through June 30, 2013, the PRSUs will vest on June 30, 2013 based on
Company’s performance as compared to its peers over the three year period beginning July 1, 2010 and ending on June 30, 2013, in accordance with Exhibit B. The peer banks will be selected by the Committee prior to the beginning
of the three-year vesting period. Not later than September 30, 2013, but effective as of June 30, 2013, Company will provide to Executive one Bonus Share (as defined in the 2003 Plan or any successor thereto) in settlement for each of his
vested PRSUs. 
 (b) If, prior to June 30, 2013, Executive’s employment hereunder shall be terminated
by Company due to Executive’s death or disability, effective as of the date of termination Company shall issue Bonus Shares to Executive, or Executive’s estate or legal representative, as applicable, based on his period of service since
the Effective Date, in accordance with the following table: 
  

			
	 Period of Service Since Effective Date
	 	Cumulative Bonus Shares Issued
		
	 One Year or Less
	 	62,500
	 More than One Year and Less Than Two Years
	 	125,000
	 Two Years or More
	 	187,500

 (c)
If, prior to June 30, 2013, Executive’s employment hereunder shall be terminated by Company without Cause, or by Executive for Good Reason, Executive shall be treated as if he had been continuously employed by Company through June 30,
2013. In such case, Executive, shall be entitled to receive any payment under this paragraph 3.2; provided, however, that the amount of any such payment shall be prorated by multiplying the payment by a fraction, the numerator of which shall be the
number of calendar days that elapsed between the date of Executive’s termination and the Effective Date and the denominator of which shall be 1,095 but in no case shall such fraction be greater than one (1). 

(d) Notwithstanding the foregoing, upon a Change of Control, the 187,500 PRSUs shall fully vest, and all Bonus Shares
which may be issued as a result of the vesting of such PRSUs shall be issued, effective as of the date of the Change of Control.] 

(e) The aggregate number of shares of Company Stock which may be awarded hereunder to Executive shall be appropriately
adjusted for any increase or decrease in the number of outstanding shares of Company Stock resulting from a stock split or other subdivision or consolidation of shares of Company Stock or for other capital adjustments or payments of stock dividends
or distributions or other similar increases or decreases in the outstanding shares of Company Stock without receipt of consideration by Company. 
  

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 (f) In the event that Executive receives shares of Company Stock in
connection with the settlement of PRSUs under this Section and Company subsequently (i) determines that it must file a formal restatement of its previously filed financial statements with the Securities and Exchange Commission, and (ii) as
a result of the restatement the Board makes a formal determination that some portion of Executive’s PRSUs were not properly vested due to a change in actual performance results due to such restatement, then Company and Executive agree that the
provisions of this paragraph shall apply. The Board shall be authorized to (i) recalculate the number of PRSUs that should have been paid to Executive for the current or any prior period, and (ii) the amount of any excess PRSU vesting that
occurred during such prior period. Executive shall immediately deliver to Company, upon demand, (i) all shares of Company Stock issued to Executive in connection with the improper vesting of some or all of his PRSUs to as to which Executive is
still the direct or indirect beneficial owner; and (ii) if Executive has sold or otherwise transferred the shares of Common Stock received in connection with improper vesting of his PRSUs, Executive shall pay to Company an amount in cash equal
to the greater of (A) the actual consideration received for such shares, or (B) the fair market value of the shares on the date on which such shares were sold or otherwise transferred, in either case adjusted for taxes. If an amount
described in the preceding sentence is not immediately delivered to Company, Company may offset such delivery obligation against any other payments from Company that Executive is entitled to receive under this Agreement or any other agreement or
arrangement with Company. Nothing in this Section shall be deemed to limit Company’s rights against Executive for any conduct which resulted in the formal restatement or formal determination described herein in any action at law or in equity.

 3.4 LONG TERM INCENTIVE PROGRAM. Executive shall participate in Company’s Long-Term Incentive (LTI) Stock Performance
Program in accordance with its terms. Executive’s participation in this program, including establishment of specific award targets, shall be administered by the Human Resources Program Committee. 

3.5 BUSINESS AND ENTERTAINMENT EXPENSES. Subject to Company’s standard policies and procedures with respect to expense reimbursement
as applied to its executive employees generally, Company shall reimburse Executive for, or pay on behalf of Executive, reasonable and appropriate expenses incurred by Executive during his employment hereunder for business-related purposes, including
dues and fees to industry, professional and social organizations and costs of entertainment and business development. Company shall also provide to Executive a car allowance, the amount of which shall be determined by the Human Resources Program
Committee from time to time, or use of a Company owned vehicle. 
 3.6 OTHER COMPANY BENEFITS. Executive and, to the extent
applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in all benefits, plans and programs, including improvements or modifications of the same, which are now, or may hereafter be, available to other
executive employees of Company. Such benefits, plans and programs may include, without limitation, pension benefit plans, health insurance or health care plans, life insurance, disability insurance, supplemental retirement plans, vacation and sick
leave benefits, and the like. Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such benefit plan or program, so long as such changes are similarly
applicable to executive employees generally. 
  

 5 

 ARTICLE 4: CONFIDENTIAL INFORMATION 

In Executive’s position with Company and the Bank, Company has previously (i) disclosed to Executive, and placed Executive in a
position to have access to or develop, trade secrets or confidential information of Company or its affiliates, (ii) entrusted Executive with business opportunities of Company or its affiliates, or (iii) placed Executive in a position to
develop goodwill on behalf of Company or its affiliates. Executive acknowledges that in his position with Company and the Bank, Company shall continue to (i) disclose to Executive, or place Executive in a position to have access to or develop,
additional and subsequent trade secrets or confidential information of Company or its affiliates, (ii) entrust Executive with future business opportunities of Company or its affiliates, or (iii) place Executive in a position to develop
business goodwill on behalf of Company or its affiliates. Executive recognizes and acknowledges that Executive has had, will continue to have, and is being provided contemporaneously with or after the execution of this Agreement certain information
of Company and that such information is confidential and constitutes valuable, special and unique property of Company. In consideration of Company’s promise to disclose and actual disclosure of its Confidential Information contemporaneous with
or after the execution of this Agreement, Executive shall not at any time, either during or subsequent to the term of employment with Company, disclose to others, use, copy or permit to be copied, except in pursuance of Executive’s duties for
and on behalf of Company, its affiliates and their respective successors, assigns or nominees, any Confidential Information of Company (regardless of whether developed by Executive) without the prior written consent of Company. In the event
Executive becomes legally compelled (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand, regulatory demand or other similar process) to disclose any Confidential Information, Executive
will provide Company with prompt written notice so that Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Article 4. In the event that a protective order or other remedy is not
obtained, or Company waives compliance with the provisions of this Article 4, Executive will furnish only that portion of the Confidential Information which is legally required and exercise reasonable best efforts to obtain assurances that
confidential treatment will be accorded the Confidential Information. The term “Confidential Information” means any secret or confidential information or know-how and shall include, but shall not be limited to, the plans, customers,
costs, prices, uses, corporate opportunities, research, financial data, evaluations, prospects, and applications of products and services, results of investigations or studies owned or used by Company, and all apparatus, products, processes,
compositions, samples, formulas, computer programs, computer hardware designs, computer firmware designs, and servicing, marketing or manufacturing methods and techniques at any time used, developed, investigated, made or sold by Company, before or
during the term of employment with Company, that are not readily available to the public or that are maintained as confidential by Company. Executive shall maintain in confidence any Confidential Information of third parties received as a result of
Executive’s employment with Company in accordance with Company’s obligations to such third parties and the policies established by Company. 
  

 6 

 ARTICLE 5: NON-COMPETITION OBLIGATIONS 

5.1 IN GENERAL. 

(a) As part of the consideration for the compensation and benefits to be paid to Executive hereunder; as necessary to
protect the Confidential Information of Company and its affiliates that has been, is contemporaneously with the execution of this Agreement, and will in the future be disclosed or entrusted to Executive, the business goodwill of Company and its
affiliates that has been, are contemporaneously with the execution of this Agreement, and will in the future be developed in Executive, and the business opportunities that have been, are contemporaneously with the execution of this Agreement, and
will in the future be disclosed or entrusted to Executive by Company and its affiliates; and as an additional material incentive for Company to enter into this Agreement, Company and Executive agree to the non-competition obligations hereunder.
Executive shall not, directly or indirectly for Executive or for others, in any county where Company, Bank or any of its banking affiliates has offices as of the date of the termination of the employment relationship or in any county contiguous
thereto: 
 (1) engage in any business competitive with the banking, financial services and other businesses
conducted by Company, Bank, or its banking affiliates; 
 (2) render advice or services to, or otherwise assist,
any other person, association, or entity who is engaged, directly or indirectly, in any banking, financial services or other business competitive with the banking, financial services and other businesses conducted by Company, Bank, or its banking
affiliates with respect to such competitive business; 
 (3) own, manage, operate, control, invest or acquire an
equity interest in any entity engaged in or conducting any banking, financial services or other business competitive with the banking, financial services and other businesses conducted by Company, Bank or its banking affiliates; 

(4) request or induce any customer, depositor or borrower of Company, Bank or any of its banking affiliates or any other
person which has a business relationship with Company, Bank or any of its banking affiliates and with respect to whom Executive has had, directly or indirectly, Confidential Information about or dealings with or has managed or supervised another
individual who has had Confidential Information about or dealings with such customer, depositor, borrower, or other person, to curtail, cancel or otherwise discontinue its business or relationship with Company, Bank or any of its banking affiliates;
or 
 (5) induce any employee of Company, Bank or any of its affiliates to terminate his or her employment with
Company, Bank or any such affiliate, or hire or assist in the hiring of any employee of Company, Bank or any of its affiliates, or any former employee of Company, Bank, or any of its affiliates, who

  

 7 

 
has ended his or her relationship with Company, Bank or any of its affiliates within six months prior to the date of such hiring or assistance, by any person, association, or entity not
affiliated with Company. 
 (b) These non-competition obligations shall apply during the period that Executive is
employed by Company and shall extend for two years after the termination of Executive’s employment. 
 (c)
Notwithstanding the foregoing, nothing contained in this Agreement shall prohibit Executive from acquiring or holding any issue of stock or securities of any entity that has securities registered under Section 12 of the Securities Exchange Act
of 1934 and either listed on a national securities exchange or quoted on the automated quotation system of the National Association of Securities Dealers, Inc. so long as (i) Executive is not deemed to be an “affiliate” of such entity
as such term as used in paragraphs (c) and (d) of Rule 145 under the Securities Act of 1933 and (ii) Executive and members of his immediate family do not own or hold more than three percent (3%) of any voting securities of any
such entity. Executive acknowledges that while employed by Company he will remain subject to Company’s Code of Ethics or any similar or successor policy governing ownership of interests in any competitive or potentially competitive financial
institution. 
 5.2 ENFORCEMENT AND REMEDIES. Executive understands that the restrictions set forth in paragraph 5.1 may limit
Executive’s ability to engage in certain businesses during the period provided for above, but acknowledges that Executive will receive sufficiently high remuneration and other benefits under this Agreement, including but not limited to
Company’s disclosure of its Confidential Information as provided herein, to justify such restriction. Executive acknowledges that money damages would not be a sufficient remedy for any breach of this Article 5 by Executive, and Company
shall be entitled to enforce the provisions of this Article by terminating all compensation and all benefits hereunder (other than all accrued and unpaid Base Salary through the date such action is taken by Company) and seeking specific performance
and injunctive relief as remedies for such breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article 5, but shall be in addition to all remedies available at law or in equity to Company, including without
limitation, the recovery of damages from Executive and Executive’s agents involved in such breach and remedies available to Company pursuant to other agreements with Executive. 

5.3 REFORMATION. It is expressly understood and agreed that Company and Executive consider the restrictions contained in this Article to
be reasonable and necessary to protect the proprietary information of Company. Nevertheless, if any of the aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or
otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by such court so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced. 

 

 8 

 ARTICLE 6: EFFECT OF TERMINATION ON COMPENSATION 

6.1 BY EXPIRATION. If Executive’s employment hereunder shall terminate as provided in paragraph 2.1 hereof, then all compensation
and all benefits to Executive hereunder shall terminate contemporaneously with termination of his employment except to the extent (i) any compensation (including bonuses), or Bonus Shares earned by Executive during the Employment Term have not
been determined, paid, issued or delivered to Executive as of the expiration of the Employment Term, in which case Company shall remain obligated to pay, issue or deliver any such compensation, or Bonus Shares in accordance with the terms and
provisions hereof, and (ii) benefits which continue pursuant to the specific terms of any plan or program. 
 6.2 BY
COMPANY. If Executive’s employment hereunder shall be terminated by Company prior to expiration of the Employment Term, then, upon such termination, all compensation and benefits to be paid or provided to Executive hereunder shall, except as
otherwise provided herein, terminate contemporaneously with the termination by Company of Executive’s employment (except to the extent benefits continue pursuant to the specific terms of any plan or program); provided, however, that if
Executive’s employment shall be terminated by Company prior to a Change of Control pursuant to paragraph 2.2(d) or shall be terminated by Company following a Change of Control pursuant to paragraph 2.2(c) or (d), then Company shall (i) pay
Executive the Termination Payments, and (ii) provide Executive with Continuation Benefits. 
 6.3 BY EXECUTIVE. If
Executive’s employment hereunder shall be terminated by Executive prior to expiration of the Employment Term, then, upon such termination, regardless of the reason therefore, all compensation and benefits to Executive hereunder shall, except as
otherwise provided herein, terminate contemporaneously with the termination of such employment (except to the extent benefits continue pursuant to the specific terms of any plan or program); provided, however, that if such termination shall be
pursuant to paragraph 2.3(a), then Company shall (i) pay Executive the Termination Payments and (ii) provide Executive with Continuation Benefits. 

6.4 REQUIRED RELEASE. Notwithstanding the provisions of paragraph 6.2 or 6.3, as a condition to the receipt of any Termination Payments
or Continuation Benefits pursuant to paragraph 6.2 or 6.3, Executive and Company must first execute a mutual release agreement, in a form mutually acceptable to Executive and Company, which shall (i) release Company, its affiliates and their
officers, directors, employees and agents from any and all existing claims and causes of action of any kind or character, including but not limited to all claims or causes of action arising out of Executive’s employment with Company and the
termination of such employment, and (ii) release Executive from any and all existing claims and causes of action of any kind or character, including but not limited to all claims or causes of action arising out of Executive’s employment
with Company and service as an officer and director. Company shall, within fourteen (14) days following Executive’s termination date, provide the release agreement (the “Release”) to Executive. Executive shall return the
release to Company within the particular time period specified therein, which shall be no later than forty-five (45) days following the delivery of the Release to Executive (such deadline, the “Release Deadline”), and any
applicable revocation period set forth in the release shall have expired. If Executive does not properly execute the Release by the Release Deadline, or effectively revokes the executed Release within

  

 9 

 
seven (7) days after delivery of such Release to Company, Executive will receive only such compensation and benefits as are required by applicable law. Payment of Termination Payments and
Continuation Benefits under this Agreement shall commence sixty (60) days following Executive’s termination date. In the event such payments are made in the form of a series of installments, any payments which are delayed under this
provision shall be paid to Executive in a lump sum not later than the date of Company’s first full payroll cycle in the later taxable year. 

6.5 NO DUTY TO MITIGATE LOSSES. Executive shall have no duty to find new employment following the termination of his employment under
circumstances which require Company to pay any amount to Executive pursuant to this Article 6. Any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an
independent contractor) following the termination of his employment under circumstances pursuant to which this Article 6 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount of such payment) pursuant to the
terms of this Article 6. 
 6.6 INCENTIVE AND DEFERRED COMPENSATION. This Agreement governs the rights and obligations of
Executive and Company with respect to Executive’s base salary, bonus, life insurance and certain perquisites of employment. Executive’s rights and obligations both during the term of his employment and thereafter with respect to incentive
compensation (including, without limitation, the Bonus Shares) shall be governed by the separate agreements, plans and other documents and instruments governing such matters. 

6.7 PREEMPTIVE CONSIDERATIONS. Notwithstanding anything to the contrary set forth herein: 

(a) If Executive is suspended and/or temporarily prohibited from participating in the conduct of Company’s or
Bank’s affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)), Company’s obligations under this Agreement shall be suspended as of the date of service unless
stayed by appropriate proceedings. If the charges in the notice are dismissed, Company shall (i) pay Executive the compensation withheld while this Agreement’s obligations were suspended, and (ii) reinstate any of its obligations
which were suspended. 
 (b) If Executive is removed and/or permanently prohibited from participating in the
conduct of Company’s or Bank’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) or (g)(1)), all obligations of Company under this Agreement shall terminate as of the
effective date of the order, but vested rights of the parties shall not be affected. 
 (c) If the performance of
any of Company’s obligations under this Agreement would constitute a golden parachute payment as defined by Section 359.1(f) of the Federal Deposit Insurance Corporation Rules and Regulations (12 C.F.R. §359.1(f)) and prohibited by
Section 359.2 of the Federal Deposit Insurance Corporation Rules and Regulations (12 C.F.R. §359.2), or any other applicable law or regulation, Company’s obligations under this Agreement to make any such golden parachute payment shall
terminate. 
  

 10 

 ARTICLE 7: DEFINITIONS 

7.1 DEFINITIONS. As used in this Agreement, terms defined in the preamble and recitals of or elsewhere in this Agreement shall have the
meanings set forth therein and the following terms shall have the meanings set forth below: 
 (a) “Bonus
Shares” shall mean the common shares of Company Stock issued to Executive pursuant to paragraph 3.3(a). 

(b) “Cause” shall mean Executive: 

(1) has engaged in gross negligence or willful misconduct in the performance of the duties required of him hereunder;

 (2) has been convicted of or pleaded guilty or nolo contendere to a misdemeanor involving moral
turpitude or a felony; 
 (3) has willfully refused without proper legal reason to perform the duties and
responsibilities required of him hereunder; 
 (4) has materially breached either (i) any material provision
of this Agreement, or (ii) any corporate policy or code of conduct established by Company which, in either case, if curable, remains uncured for thirty (30) days following written notice to Executive by Company of such breach; or

 (5) has willfully engaged in conduct that he knows or should know is materially injurious to Company or any of
its affiliates. 
 (c) A “Change of Control” shall be deemed to have occurred if: 

(1) 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 Company representing thirty-five percent (35%) or more of the combined
voting power of Company’s then outstanding securities eligible to vote for the election of the board of directors of Company (the “Company Voting Securities”); provided, however, that the event described in this paragraph
(1) shall not be deemed to be a Change of Control by virtue of an acquisition by any of the following persons or groups: (i) by Company, (ii) by any employee benefit plan (or related trust) sponsored or maintained by Company,
(iii) by any underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) by any person or group pursuant to a Non-Qualifying Transaction (as defined in paragraph (2) below); 

 

 11 

 (2) the consummation of a merger, consolidation, share exchange or similar
form of corporate transaction involving Company that requires the approval of Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately
following such Business Combination: (i) more than seventy-five percent (75%) of the total voting power of (A) the corporation resulting from such Business Combination (the “Surviving Corporation”), or (B) if
applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by
Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company 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 Company Voting Securities among the holders thereof immediately prior to the Business Combination, (ii) 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 indirectly, 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 (iii) 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 Company approved the execution of the initial
agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying Transaction”); 

(3) the individuals who constitute the board of directors of Company 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 Company, 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 Company shall be, for purposes of this Agreement, considered an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of Company 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; or 
 (4) the consummation
of a sale of 50% or more of the assets of Company. 
 (d) “Company Stock” shall mean
Company’s common stock, $1.00 per share. 
  

 12 

 (e) “Continuation Benefits” shall mean the following
benefits, which shall be provided to Executive following the termination of Executive’s employment hereunder, at a cost to Executive (exclusive of applicable tax obligations of Executive in respect of such benefits) not greater than his cost if
he had remained employed by Company, for the greater of (i) the remainder of the Employment Term, or (ii) twelve (12) months; provided, however, that the period in clause (ii) shall, following a Change of Control, increase to
thirty-six (36) months: 
 (1) a car allowance, or use of company owned vehicle, and the use of a cell phone
or any other such personal business tools provided by Company or Bank if any of these items were being provided to Executive on the day immediately prior to the earlier of his termination or any Change of Control (the “Benefit Measurement
Date”); 
 (2) welfare benefits (such as medical, dental, vision, Employee Assistance Plan and flexible
spending accounts) and life insurance benefits for Executive (including his spouse and dependents) who were covered on the Benefit Measurement Date or, to the extent that any such benefit cannot be lawfully provided or Executive otherwise does not
qualify for coverage, the cost (exclusive of applicable tax obligations of Executive) of providing any such welfare benefit or life insurance benefit that is at least equal to the benefit provided to Executive on the Benefit Measurement Date;

 (3) club dues paid that do not exceed those being paid for Executive on the Benefit Measurement Date; and

 (4) continuation of banking services without service charge or at a reduced charge if any of these banking
services were being utilized by Executive on the Benefit Measurement Date. 
 In addition, Company shall pay up to $50,000 in
fees to one or more executive outplacement firms for purposes of job placement efforts for Executive, provided such all benefits shall be provided during the period commencing on Executive’s termination date and ending on the last day of the
second calendar year following such termination date. 
 Notwithstanding the foregoing, any such benefit listed above shall
terminate if and to the extent Executive becomes eligible to receive (at a cost not greater than what Executive would have paid if still employed by Company) a substantially comparable benefit from a subsequent employer, and any such eligibility
shall be promptly reported to Company by Executive. 
 (f) “Disabled” shall mean Executive is
incapacitated by accident, sickness or other circumstance which renders him, with reasonable accommodation, mentally or physically incapable of performing the duties and services required of him hereunder on a full-time basis for a period of at
least 180 consecutive days. 
  

 13 

 (g) “Good Reason” means, without Executive’s express
written consent, the occurrence of any one of the following events after a Change of Control: 
 (1) either
(i) any change in the duties or responsibilities of Executive that is inconsistent in any material and adverse respect with Executive’s position, duties, responsibilities or status with Company immediately prior to such Change of Control
or (ii) a material and adverse change in Executive’s titles or offices with Company (or any Parent Corporation or Surviving Corporation) and including, if applicable, (A) membership or position on a board of directors with Company or
Bank (or either’s respective successor), or (B) Executive’s direct reporting relationship to the Board of Directors of Company (or any Parent Corporation or Survivor Corporation) as in effect immediately prior to such Change of
Control; 
 (2) a material reduction in Executive’s rate of Base Salary or target bonus opportunities
(including any material and adverse change in the formula for such bonus target) as in effect immediately prior to the Change of Control or as the same may be increased from time to time thereafter, or the failure of Company (or any Parent
Corporation or Surviving Corporation) to pay any such amounts when due; 
 (3) any requirement that Executive be
based anywhere more than twenty-five (25) miles from the office where Executive was located at the time of the Change of Control, if such relocation increases Executive’s commute by more than twenty-five (25) miles; 

(4) the failure of Company (or any Parent Corporation or Surviving Corporation) to continue in effect a total compensation
package (including incentive compensation opportunities) providing a total compensation package at least equivalent to Executive’s total compensation package in the calendar year immediately preceding the calendar year in which the Change of
Control occurs or in effect immediately prior to the Change of Control, whichever is greater; 
 (5) the material
breach of any material provision of this Agreement by Company; or 
 (6) the failure of Company to obtain the
assumption (and, if applicable, guarantee) agreement from any Surviving Corporation (and, if applicable, Parent Corporation) as contemplated in paragraph 8.10(b). 

Executive shall provide notice of any such reduction, failure, change or breach upon which Executive Employee intends to rely as the basis
for a Good Reason resignation within forty-five (45) days of the occurrence of such reduction, failure, change or breach. Company shall have thirty (30) days following the receipt of such notice to remedy the condition constituting such
reduction, change or breach and, if so remedied, any termination of Executive’s employment hereunder on the basis of the circumstances described in such notice shall not be considered a Good Reason resignation. If Company does not remedy the
condition that has been the subject of a notice as described in this paragraph within thirty (30) days of Company’s receipt of such notice, Executive must 

 

 14 

 
terminate his employment within ninety (90) days following the occurrence of such condition in order for such termination to be considered for Good Reason for purposes of this Agreement.

 (h) “SEC” shall mean the Securities and Exchange Commission. 

(i) “Termination Payments” shall mean: 

(1) In the case of a termination of Executive’s employment prior to a Change of Control either by Company pursuant to
paragraph 2.2(e) or by Executive pursuant to paragraph 2.3(a), a lump sum cash payment, payable within ten (10) days after the last day of Executive’s employment with Company, in an amount equal to the aggregate Base Salary, as in effect
on the effective date of any such termination, that Executive would earn during the remainder of the Employment Term or for a minimum of twelve months, whichever is greater. 

(2) In the case of a termination of Executive’s employment following a Change of Control either by Company pursuant
to paragraph 2.2(c), (d) or (e) or by Executive pursuant to paragraph 2.3(a), a lump sum cash payment, payable within ten (10) days after the last day of Executive’s employment with Company, in an amount equal to the product of
three times the sum of (i) Executive’s base salary for the calendar year prior to the calendar year in which the Change of Control occurs or Executive’s Base Salary in effect immediately prior to the Change of Control, whichever is
greater, plus (ii) the average annual performance bonus paid or payable to Executive pursuant to paragraph 3.2 during the Employment Term. 

ARTICLE 8: MISCELLANEOUS 

8.1 NOTICES. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 

 

							
	IF TO COMPANY TO:	  	Chief Human Resources Officer	  		  	
		  	Sterling Bancshares, Inc.	  		  	
		  	10260 Westheimer	  		  	
		  	Houston, Texas 77042	  		  	
				
	IF TO EXECUTIVE TO:	  	J. Downey Bridgwater	  		  	
		  	c/o Sterling Bank	  		  	
		  	10260 Westheimer	  		  	
		  	Houston, Texas 77042	  		  	

 or to such other address as either party may furnish to the other in writing in accordance herewith, except that
notices of changes of address shall be effective only upon receipt. 
  

 15 

 8.2 APPLICABLE LAW. This Agreement is entered into under, and shall be governed for all
purposes by, the laws of the State of Texas. 
 8.3 NO WAIVER. No failure by either party hereto at any time to give notice of
any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 

8.4 SEVERABILITY. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then
the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect. 

8.5 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of
which together will constitute one and the same Agreement. 
 8.6 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS. Company
may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with
respect to Company’s employees generally. 
 8.7 HEADINGS. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes. 
 8.8 GENDER AND PLURALS. Wherever the context so requires, the
masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely. 
 8.9 AFFILIATE.
As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, Company. 

8.10 SUCCESSOR OBLIGATIONS. 

(a) This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or
otherwise. 
 (b) Company agrees that in connection with any Business Combination, it will cause each successor
entity to Company or Bank to unconditionally assume, and each Parent corporation to guarantee, by written instrument delivered to Executive (or his beneficiary or estate), all of the obligations of Company hereunder. Failure of Company 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. 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 Executive. 

 

 16 

 8.11 ASSIGNMENT. Except as provided in paragraph 8.10, this Agreement, and the rights and
obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law
or otherwise, without the prior written consent of the other party. 
 8.12 TERM. This Agreement has a term co-extensive with
the Employment Term provided in paragraph 2.1. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination. Without limiting the scope of the preceding sentence, the provisions of Articles 4
and 5 shall survive any termination of the employment relationship and/or of this Agreement. 
 8.13 ENTIRE AGREEMENT. Except
for (i) the written benefit plans and programs referenced in paragraphs 3.5 and 6.7, (ii) any agreement or other obligation of Executive concerning non-disclosure of confidential information, non-competition, or any restrictions on
Executive’s actions concerning Company customers, borrowers, or depositors (which shall remain in full force and effect in addition to such obligations contained in this Agreement), and (iii) any signed written agreement contemporaneously
or hereafter executed by Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contain all the covenants, promises, representations, warranties and agreements between the
parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all prior understandings and agreements among the parties hereto relating to the subject matter hereof are hereby null and void and of
no further force and effect. Any modification of this Agreement shall be effective only if it is in writing and signed by the party to be charged. 

8.14 TAX CONSEQUENCES. Company makes no representations to Executive regarding any tax liabilities that may be incurred, including, but
not limited to, any application of or taxes incurred under Code Section 409A, because of any payments made to Executive under this Agreement or any plan or program referenced herein. 

8.15 SECTION 409A COMPLIANCE. 

(a) General Suspension of Payments. If Executive is a “specified employee,” as such term is defined
within the meaning of Code Section 409A and determined under Company’s Deferred Compensation Plan, any payments or benefits payable or provided as a result of Executive’s termination of employment that would otherwise be paid or
provided within six months and one day of such termination (other than due to death or “disability”, as such term is defined within the meaning of Code Section 409A) shall instead be paid or provided on the earlier of (i) six
months and two days following Executive’s termination, (ii) the date of Executive’s death, or (iii) any date that otherwise complies with Code Section 409A. In the event that Executive is entitled to receive payments during
the suspension period provided under this Section, Executive shall receive the accumulated benefits that would have been paid or provided under this 

 

 17 

 
Agreement within the six month and one day suspension period on the earliest day that would be permitted under Code Section 409A. For periods following the date a Change of Control occurs,
Company shall, within five business days following the otherwise applicable payment date, deposit any amounts which are subject to the payment suspension requirement of this paragraph 8.15(a) into a “rabbi trust” maintained by an unrelated
banking institution designated by Executive, designate that Executive shall receive any earnings on amounts held in the Trust at the end of the suspension period, and pay any and all fees associated with such “rabbi trust.” 

(b) Medical Benefits. To the extent that Executive is entitled to receive medical continuation benefits for any
period in excess of eighteen (18) months following Executive’s termination date, the following provisions shall apply: 

(1) Following the end of the eighteen (18) month COBRA continuation period under Company’s group health and/or
dental plan (the “Health Plan”), Executive may elect to receive additional coverage for Executive (including his spouse and dependents) during any period specified under this Agreement by (i) filing a written notice with Company, and
(ii) paying an amount equal to the then applicable COBRA rates for such coverage. The parties hereby agree that, notwithstanding any other provision of this Agreement, Executive shall pay the full cost to receive such instead of the subsidized
cost of coverage paid by an active employee of Company. 
 (2) Following the end of the eighteen (18) month
COBRA continuation period provided under the Health Plan, Company shall, as a separate obligation, reimburse Executive for any medical premium expenses he incurs to purchase continued medical coverage under the Health Plan for Executive (including
his spouse and dependents), but only to the extent such expense is in excess of the premium level that would be paid by Executive on the Benefit Measurement Date (which amount shall be referred to herein as the “Medical Reimbursement”). In
accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv)(A), the premiums available for reimbursement under this paragraph in any calendar year will not be increased or decreased to reflect the amount actually reimbursed in a prior or
subsequent calendar year, and all reimbursements under this paragraph will be paid to Executive within twenty (20) days following Company’s receipt of a request for reimbursement. In addition, Company will pay Executive an amount equal to
the aggregate of the Federal, state and local income taxes that Employee pays on the Medical Reimbursement payments, plus the additional Federal, state and local income taxes imposed on Employee due to such additional income tax gross-up payment by
Company. Company will pay the additional income tax gross-up amounts owed to Executive under this paragraph at the same time payments of the Medical Reimbursement are made. 

(c) Reimbursement Payments. The following rules shall apply to payments of Continuation Payments that are treated
as “reimbursement payments” under Code Section 409A: (i) the amount of expenses eligible for reimbursement in one calendar year shall not limit the available reimbursements for any other calendar year; (ii) Executive shall

  

 18 

 
file a claim for all reimbursement payments not later than thirty (30) days following the end of the calendar year during which the expenses were incurred, (iii) Company shall make such
reimbursement payments within thirty (30) days following the date Executive delivers written notice of the expenses to Company; and (iv) the Employee’s right to reimbursement payments under this Section 8.15(c) shall not be
subject to liquidation or exchange for any other payment or benefit. 
 (d) Separation from Service. For
purposes of this Agreement, any reference to “termination” of Executive’s employment shall be interpreted consistent with the meaning of the term “separation from service” in Code Section 409A(a)(2)(A)(i). 

(e) Mandated Deferral of Payments. In the event that all or any portion of a payment that is scheduled to be made
to Executive pursuant to Article 3 of this Agreement, any separate compensation plan established by Company or any equity compensation award will result in Company being subject to the deduction limits of Code Section 162(m), Company, in its
sole discretion, shall have the right to defer payment to Executive of all or any portion of any such payment until the earlier of (i) such time as Executive is no longer a “covered employee” under Code Section 162(m), or
(ii) the first calendar year in which Company reasonably anticipates that the payment can be made without causing a loss of tax deductions under Code Section 162(m); provided that such deferral shall be limited to the portion of the
payment that is not deductible by Company pursuant to the Code and such deferral shall not violate the restrictions under Code Section 409A. The preceding sentence shall only apply if its application would, or is anticipated to, permit Company
to deduct the payment of amounts deferred thereunder during a future calendar year. 
 (f) General.
Notwithstanding any provisions of this Agreement relating to the timing of any benefits or payments, including without limitation the provisions of paragraphs 6.2, 6.3 and 6.7, to the extent required to comply with applicable law, including Code
Section 409A, or to prevent the imposition of any excise taxes or penalties on Company or Executive, the commencement of payment or provision of any Termination Payments, Continuation Benefits, Gross-Up Payment or other payment or benefit shall
be deferred to the minimum extent necessary so as to comply with any such law or to avoid the imposition of any such excise tax or penalty. 

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

  

 19 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the 9th day of July,
2010, to be effective as of the Effective Date. 
  

			
	STERLING BANCSHARES, INC.
		
	By:	 	 /s/ James W. Goolsby, Jr.

		 	James W. Goolsby, Jr.
		 	Executive Vice President and General Counsel

  

	
	 APPROVED:

	
	 /s/ George Beatty, Jr.

	 George Beatty, Jr.

	 Chairman, Human Resources Programs Committee

“COMPANY” 
  

	
	 /s/ J. Downey Bridgwater

	J. Downey Bridgwater

“EXECUTIVE” 
  

 20 

 EXHIBIT A 

Annual Incentive Program 

The Human Resources Programs Committee shall provide an annual incentive bonus program for Executive based on the terms contained in
this Exhibit A. These performance metrics, Return on Assets or “ROA” and Earnings Per Share or “EPS”, shall established for each fiscal year based on the budget approved by Company’s Board for such year. Criteria for the
Board Evaluation component of the program will be established annually by the HR Programs Committee at its December meeting to be effective
January 1st of the following year, except for the
year 2010 for which the criteria are to be established September 30, 2010. The weighting shall be 35% based on ROA, 35% based on EPS and 30% based on Board evaluation. The target bonus percentage shall be based on available market data and
shall be subject to annual approval by the Human Resource Programs Committee. 
  

 - i - 

 EXHIBIT B 

STERLING BANCSHARES, INC. 

Three-Year Performance Metrics for Phantom Stock Units 

July 1, 2010 – June 30, 2013 
  

												
	 STERLING BANCSHARES, INC. PERFORMANCE
BASED
 PHANTOM STOCK UNITS VESTING TABLE
	 	 	Percent of
award based
on
performance
results	 
	 Return on Assets Sterling

Bank performance Vs. PEERS 50% Weight
	 	 	 Earning per Share Growth

Sterling Bank performance

Vs. PEERS 50% Weight
	 	 
	 Percentile Rank
	  	Percent of
PRS Vested	 	 	 Percentile Rank
	  	Percent of
PRS Vested	 	 
	 0-29.99%tile
	  	0	% 	 	0-29.99%tile	  	0	% 	 	0	% 
	 30-34.99%tile
	  	10	% 	 	30-34.99%tile	  	10	% 	 	20	% 
	 35-39.99%tile
	  	25	% 	 	35-39.99%tile	  	25	% 	 	50	% 
	 40-49.99%tile
	  	40	% 	 	40-49.99%tile	  	40	% 	 	80	% 
	 50-64.99%tile
	  	50	% 	 	50-64.99%tile	  	50	% 	 	100	% 
	 65-74.99%tile
	  	75	% 	 	65-74.99%tile	  	75	% 	 	150	% 
	 75%tile or higher
	  	100	% 	 	75%tile or higher	  	100	% 	 	200	% 

  

 - ii -

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