EXHIBIT 10.2
SEVERANCE AND NON-COMPETITION AGREEMENT
THIS SEVERANCE AND NON-COMPETITION AGREEMENT (the "Agreement") is
entered into effective as of this 2nd day of May, 2005 by and among Sterling
Bancshares, Inc., a Texas corporation ("Bancshares"), Sterling Bank, a banking
association chartered by the State of Texas and an indirect subsidiary of
Bancshares ("Bank") and Xxxxx Xxxxx (the "Executive Officer").
WHEREAS, the Executive Officer is being employed by Bancshares and/or
Bank in a position in which he will have access to, and will gain knowledge of,
confidential and proprietary information of Bancshares, Bank, Sterling
Bancorporation, Inc. and their respective affiliates (each, a "Sterling Entity,"
and together, the "Sterling Entities"), and the parties wish to ensure that the
Executive Officer will enjoy access to the Sterling Entities' existing and
future confidential and proprietary information;
WHEREAS, the Sterling Entities' confidential and proprietary
information constitutes a substantial asset of the Sterling Entities that the
parties mutually wish to protect;
WHEREAS, the Executive Officer is already subject to certain
confidentiality obligations under Texas law, and the parties reasonably believe
that it would be difficult, if not impossible, for the Executive Officer to
refrain from using or disclosing the confidential and proprietary information of
the Sterling Entities in the event that the Executive Officer were to work for
any other financial institution after terminating his/her employment with
Bancshares and/or the Bank;
WHEREAS, the parties mutually desire to achieve a level of certainty
and predictability concerning the post-employment activities the Executive
Officer may perform, and when;
WHEREAS, the parties mutually desire to compensate the Executive
Officer for any restriction on his ability to engage in certain competitive
activities; and
WHEREAS, the parties mutually desire to ensure that the Executive
Officer receives certain severance benefits in the event that his employment is
terminated by Bancshares and Bank without cause, or following a "Change of
Control" (as herein defined) under the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the premises,
representations, and mutual covenants hereinafter set forth, the parties do
hereby agree as follows:
1. Definitions. The following words and terms shall have the meanings
set forth below for purposes of this Agreement:
(a) Cause. A termination of employment is for "Cause" only if
it is due to:
(i) serious intentional misconduct on the part of the
Executive Officer;
(ii) fraud, misappropriation or embezzlement related
to any of the Sterling Entities on the part of the Executive
Officer;
(iii) the conviction of the Executive Officer of any
felony or crime involving moral turpitude;
(iv) a material violation by the Executive Officer of
any applicable federal or state banking law or regulation that
has had, or may have, a material adverse effect on any
Sterling Entity;
(v) a material breach of any corporate policy
including, without limitation, the Code of Business Conduct
and Ethics and the Code of Ethics for Senior Officers, as
applicable to the Executive Officer which, if correctable,
remains uncorrected for 30 days following written notice to
the Executive Officer by a Sterling Entity of such breach;
(vi) a material breach of this Agreement which, if
correctable, remains uncorrected for 30 days following written
notice to the Executive Officer by a Sterling Entity of such
breach; or
(vii) the willful and continued failure by the
Executive Officer to perform substantially the Executive
Officer's duties on behalf of any Sterling Entity, other than
any such failure resulting from the Executive Officer's
incapacity due to Disability, which failure is not promptly
abated after a demand for substantial performance is delivered
to the Executive Officer by Bancshares or other applicable
Sterling Entity that specifically identifies the manner in
which the Executive Officer has not substantially performed
the Executive Officer's duties and gives the Executive Officer
a reasonable period of cure.
For purposes of this definition, any act or failure to act on the Executive
Officer's part shall be considered "material" or "willful" if done or omitted to
be done by the Executive Officer otherwise than in good faith and without
reasonable belief that the Executive Officer's action or omission was in the
best interest of the Sterling Entities.
(b) Change of Control. A "Change of Control" shall be deemed
to have occurred if:
(i) any "person" or "group" (within the meanings of
Sections 13(d) or 14(d)(2) of the Securities Exchange Act of
1934) becomes the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or
indirectly, of securities of Bancshares representing
thirty-five percent (35%) or more of the combined voting power
of Bancshares' then outstanding securities eligible to vote
for the election of the board of directors of Bancshares (the
"Bancshares Voting Securities"); provided, however, that the
event described in this paragraph (i) shall not be deemed to
be a Change of Control by virtue of any of the following
acquisitions: (A) by Bancshares, (B) by any employee benefit
plan (or related trust) sponsored or maintained by Bancshares,
(C) by any underwriter temporarily holding securities pursuant
to an offering of such
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securities, or (D) pursuant to a Non-Qualifying Transaction
(as defined in paragraph (ii) below);
(ii) the consummation of a merger, consolidation,
share exchange or similar form of corporate transaction
involving Bancshares that requires the approval of Bancshares'
shareholders, whether for such transaction or the issuance of
securities in the transaction (a "Business Combination"),
unless immediately following such Business Combination: (A)
more than seventy-five percent (75%) of the total voting power
of (x) the corporation resulting from such Business
Combination (the "Surviving Corporation"), or (y) if
applicable, the ultimate parent corporation that directly or
indrectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving
Corporation (the "Parent Corporation"), is represented by
Bancshares Voting Securities that were outstanding immediately
prior to such Business Combination (or if applicable, is
represented by shares into which such Bancshares Voting
Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof
is in substantially the same proportion of the voting power of
such Bancshares Voting Securities among the holders thereof
immediately prior the Business Combination, (B) no person
(other than any employee benefit plan (or related trust)
sponsored or maintained by the Surviving Corporation or the
Parent Corporation), is or becomes the beneficial owner,
directly or indrectly, of fifty-percent (50%) or more of the
total voting power of the outstanding voting securities
eligibile to elect directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) and
(C) at least the majoirity of the board of directors of the
Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the
Business Combination were Incumbent Directors (as herein
defined) at the time the board of directors of Bancshares
approved the execution of the intial agreement providing for
such Business Combination (any Business Combinaion which
satisfies all of the criteria specified in (A), (B) and (C)
above shall be deemed to be a "Non-Qualifying Transaction");
(iii) the individuals who constitute the board of
directors of Bancshares as of the date of this Agreement (the
"Incumbent Directors") shall cease for any reason to
constitute at least a majority of the members of the board of
directors of Bancshares, provided that any person becoming a
director subsequent to the date of this Agreement, whose
election or nomination was approved by a vote of at least a
majority of the Incumbent Directors then comprising the board
of directors of Bancshares shall be, for purposes of this
Agreement, considered an Incumbent Director; provided,
however, that no individual initially elected or nominated as
a director of Bancshares as a result of an actual or
threatened contest with respect to directors or as a result of
any other actual or threatened solicitation of proxies (or
consents) by or on behalf of any person other than the board
of directors shall be deemed to be an Incumbent Director;
(iv) the consummation of a sale of all or
substantially all of the assets of Bancshares; or
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(v) the shareholders of Bancshares shall approve a
plan of complete liquidation or dissolution of Bancshares.
(c) Change of Control Termination. A "Change of Control
Termination" shall mean the termination of the Executive Officer's
employment with the Sterling Entities (or any Parent Corporation or
Surviving Corporation), within a two-year period commencing on the
effective date of a Change of Control, due to (i) an Involuntary
Termination or (ii) a termination for Good Reason.
(d) Disability. "Disability" means the Executive Officer's
permanent and total disability as defined in any long-term disability
plan sponsored by Bancshares and applicable to the Executive Officer or
in the absence of any such long-term disability plan, the term
"Disability" shall mean the absence of the Executive Officer from his
or her duties with the Sterling Entities on a full-time basis for at
least twelve (12) consecutive weeks as a result of the Executive
Officer's incapacity due to illness, accident, injury, physical or
mental incapacity or other disability.
(e) General Release of Liability. A "General Release of
Liability" means the legal document in which the Executive Officer, in
exchange for benefits under this Agreement, releases the Sterling
Entities, their affiliates, their directors, officers, employees and
agents, their employee benefit plans and the fiduciaries and agents of
said plans from liability and damages in any way related to the
Executive Officer's employment with or separation from the Sterling
Entities.
(f) Good Reason. "Good Reason" means, without the Executive
Officer's express written consent, the occurrence of any one of the
following events after a Change of Control:
(i) (A) any change in the duties or responsibilities
of the Executive Officer that is inconsistent in any material
and adverse respect with the Executive Officer's position,
duties, responsibilities or status with the Sterling Entities
immediately prior to such Change of Control or (B) a material
and adverse change in the Executive Officer's titles or
offices with the Sterling Entities (or any Parent Corporation
or Surviving Corporation) and including, if applicable,
membership or position on a board of directors with Bancshares
or Bank (or their respective successor), as in effect
immediately prior to such Change of Control;
(ii) a reduction of ten percent (10%) or more in the
Executive Officer's rate of annual base salary or annual
target bonus opportunity (including any material and adverse
change in the formula for such annual bonus target) as in
effect immediately prior to such Change of Control or as the
same may be increased from time to time thereafter, or the
failure of the applicable Sterling Entity (or any Parent
Corporation or Surviving Corporation) to pay any such amounts
when due;
(iii) any requirement that the Executive be based
anywhere more than twenty-five (25) miles from the office
where the Executive Officer was located at
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the time of the Change of Control, if such relocation
increases the Executive Officer's commute by more than
twenty-five (25) miles;
(iv) the failure of the Sterling Entities (or any
Parent Corporation or Surviving Corporation) to continue in
effect benefits and a total compensation package including,
without limitation, employee benefit plans, compensation
plans, welfare benefit plans, material fringe benefit plans,
vacation policies and other similar benefit plans providing
not less than ninety percent (90%) of the Executive Officer's
total compensation package in the twelve (12) months
immediately preceding the Change of Control; and
(v) the failure of Bancshares to obtain the
assumption (and, if applicable, guarantee) agreement from any
Surviving Corporation (and, if applicable, Parent Corporation)
as contemplated in Section 13(b).
(g) Involuntary Termination. An "Involuntary Termination"
means an involuntary termination of employment of the Executive Officer
by the Sterling Entities (or any successor thereto including a Parent
Corporation or Surviving Corporation); provided, however, that
"Involuntary Termination" shall not include termination of employment
by reason of death, Disability or Cause.
2. Compensation and Stock Award. In consideration of the services to be
provided by the Executive and the covenants and agreements contained in Sections
3, 4 and 5 of this Agreement, Bancshares shall award the Executive Officer a
$75,000 cash bonus during the first available payroll period of 2005 following
employment and three thousand (3,000) shares of Bancshares' common stock, and
five thousand (5,000) shares of restricted stock, $1.00 par value, to be vested
in equal increments over a four-year period upon commencement of your employment
and execution of the Agreement. The 3,000 shares of common stock issued to the
Executive Officer hereunder shall be awarded under the terms of Bancshares' 2003
Stock Incentive and Compensation Plan (or any successor plan) and shall not be
subject to any forfeiture or vesting requirements.
3. Non-Competition. Executive Officer acknowledges that the Sterling
Entities are providing Executive with access to Confidential Information as
defined below. Ancillary to Executive Officer's agreement not to disclose
Confidential Information, to protect the Confidential Information described
below, and in consideration for Executive Officer receiving access to this
Confidential Information, being entitled to Severance Payments, having rights
after a Change in Control, and other benefits provided in this Agreement, the
Sterling Entities and Executive Officer agree to the following non-competition
provisions. The Executive Officer shall not, during the time that he/she is
employed by any Sterling Entity and, in the event of a termination of employment
for Cause, an Involuntary Termination, or a termination of employment by the
Executive Officer, for a period of twelve (12) months after any such
termination:
(a) directly or indirectly, own, manage, operate, control,
invest or acquire an equity interest in any financial institution (or
any affiliate thereof including, without limitation, any bank holding
company or financial holding company) with $10 billion or
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less in assets located or conducting business in Xxxxxx County, Texas
or any of its contiguous counties (the "Territory") which competes with
the business conducted by any Sterling Entity;
(b) engage in or carry on, either directly or indirectly,
whether for himself or as an employee, officer, director, agent,
consultant, proprietor, partner, stockholder, member, joint venturer,
investor, or other paid participant, any business with, on behalf of or
as a financial institution within the Territory which competes with the
business conducted by any Sterling Entity;
(c) request or induce any customer, depositor or borrower of
any Sterling Entity or any other person which has a business
relationship with any Sterling Entity to curtail, cancel, or otherwise
discontinue its business or relationship with any such Sterling Entity;
or
(d) publicly denigrate or in any manner undertake to publicly
discredit any of the Sterling Entities or any person or operation
associated with any Sterling Entity.
Notwithstanding the foregoing, nothing contained in this Agreement shall
prohibit the Executive Officer from owning any issue of stock or securities of
any corporation the securities of which are either traded on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc. and which is engaged in a business which
is in competition with any Sterling Entity so long as (i) the Executive Officer
is not deemed to be an "affiliate" of such entity as such term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act of 1933 and (ii) the
Executive Officer and members of his immediate family do not own or hold more
than one percent (1%) of any voting securities of such entity.
Executive Officer warrants that Executive Officer is not a party to any
other restrictive agreement limiting Executive Officer's activities for the
Sterling Entities. Executive Officer further warrants that at the time of the
signing of this Agreement, Executive Officer knows of no written or oral
contract or of any other impediment that would inhibit or prohibit employment
with the Sterling Entities and that Executive will not knowingly use any trade
secret, confidential information, or other intellectual property right of any
other party in the performance of Executive Officer's duties hereunder.
Executive Officer shall hold the Sterling Entities harmless from any and all
suits and claims arising out of any breach of such restrictive agreement or
contracts.
4. Non-Solicitation. The Executive Officer shall not, during the time
that he is employed by any Sterling Entity, and for a period of twelve (12)
months thereafter, directly or indirectly solicit the employment of any officers
or employees of the Sterling Entities, provided, however, that this Agreement
shall not prohibit (a) any advertisement or general solicitation that is not
specifically targeted at such officers or employees, or (b) soliciting the
employment of any such officer or employee who has been terminated by any
Sterling Entity.
5. Confidentiality. The Executive Officer shall never disclose to any
person, or use or otherwise exploit for his/her own benefit or for the benefit
of any person other than a Sterling Entity, any Confidential Information (as
defined below). The Executive Officer shall have no
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obligation to keep confidential any Confidential Information if and to the
extent disclosure thereof is specifically required by law, judicial or
governmental order or other legal process; provided, however, that in the event
such disclosure is required, the Executive Officer shall, to the extent
reasonably practicable, provide Bancshares with reasonably prompt notice of such
requirement, so that Bancshares may seek an appropriate protective order or
waive compliance with this provision with respect to such disclosure. In the
event that a protective or other remedy is not obtained, or Bancshares waives
compliance with the provisions of this Section 5, the Executive Officer will
furnish only that portion of the Confidential Information which is legally
required and exercise commercially reasonable efforts to obtain assurances that
confidential treatment will be accorded to the Confidential Information.
For purposes of this Agreement, "Confidential Information" shall mean
any confidential information with respect to the conduct or details of the
business of Sterling and any Sterling Entity including, without limitation,
information relating to its commercial and retail banking services, mortgage
banking services, commercial and consumer loans, merchant credit card services,
investments and capital market transactions and strategies, its methods of
operation, customer and borrower lists, customer account information, deposits,
outstanding loans, products (existing and proposed), prices, fees, costs, plans,
technology, inventions, trade secrets, know-how, software, marketing methods,
policies, personnel, suppliers, competitors, markets or other specialized
information or propriety matters of the Sterling Entities. The term
"Confidential Information" does not include, and there shall be no obligation
hereunder with respect to, information that (a) is generally available to the
public on the date of this Agreement or (b) becomes generally available to the
public other than as a result of a disclosure by the Executive Officer in
violation of this Agreement.
6. Severance Payments. In the event of an Involuntary Termination by
the Sterling Entities prior to a Change of Control or a Change of Control
Termination, then Bancshares, or its successor, shall pay and provide, or cause
Bank or its successor to pay and provide, in exchange for the execution of a
General Release of Liability the following to the Executive Officer:
(a) two (2) years' base pay payable in equal installments each
regular pay period during the two (2) years following the termination.
For purposes of this calculation, base pay is the rate of annual salary
being paid on the day immediately preceding the termination (or the
Change of Control in the event of a Change of Control Termination);
(b) an annual bonus, payable upon each anniversary date of the
effective date of termination, for two (2) years following the
termination in an amount equal to the highest annual bonus amount paid
to that particular Executive Officer during the three (3) years
immediately preceding the termination (or the Change of Control in the
event of a Change of Control Termination);
(c) a car allowance, or use of company owned vehicle, and the
use of a cell phone provided by Bancshares or Bank for the two (2)
years following the termination if any of these items were being
provided to the Executive Officer immediately prior to the termination
(or the Change of Control in the event of a Change of Control
Termination);
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(d) welfare benefits or, to the extent that such benefits
cannot be lawfully provided or the Executive Officer otherwise does not
qualify for coverage, the cost of providing welfare benefits, such as
medical, dental, vision, Employee Assistance Plan, and flexible
spending accounts for the two (2) years following the termination that
are equal to or greater that those provided to the Executive Officer
immediately prior to the termination (or the Change of Control in the
event of a Change of Control Termination);
(e) life insurance benefits or, to the extent that such
benefits cannot be lawfully provided or the Executive Officer otherwise
does not qualify for coverage, the cost of providing life insurance
benefits for the two (2) years following the termination that are equal
to or greater than those provided to the Executive Officer immediately
prior to the termination (or the Change of Control in the event of a
Change of Control Termination);
(f) club dues paid for the two (2) years following the
termination that are equal to or greater that those provided to the
Executive Officer immediately prior to the termination (or the Change
of Control in the event of a Change of Control Termination);
(g) continuation of banking services without service charge or
at a reduced charge for the two (2) years following the termination if
any of these banking products were being utilized by the Executive
Officer immediately prior to the termination (or the Change of Control
in the event of a Change of Control Termination):
(h) payment of reasonable and customary business-related
expenses incurred through the last day of active employment if
submitted in writing to Bancshares, Bank or their respective successor
within ninety (90) days following the effective date of termination;
(i) payment of up to $20,000 in fees to one or more executive
search firms for purposes of job placement efforts for the Executive
Officer for the two (2) years following the termination;
(j) to the extent permitted by applicable law, participation
in Bancshares' Deferred Compensation Program (or similar program if
termination follows a Change of Control) for the two (2) years
following the termination;
(k) to the extent permitted by applicable law and the
applicable terms of any plan, participation in Bancshares' Employee
Stock Purchase Program (or similar program if termination follows a
Change of Control) for the two (2) years following the termination;
(l) to the extent permitted by applicable law, participation
in Bancshares' Employee Savings Plan (or similar program if termination
follows a Change of Control) for the two (2) years following the
termination;
(m) to the extent permitted by applicable law and the
applicable terms of any plan, immediate and full vesting upon
termination in all Bancshares plans (or similar plans if termination
follows a Change of Control) that require a vesting period including,
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without limitation, all unvested contributions to the Bancshares'
Employee Savings Plan; and
(n) to the extent permitted by applicable law and the terms of
any applicable plan, all outstanding stock options shall fully vest and
become exercisable and all restrictions and forfeiture provisions
applicable to any outstanding stock awards shall lapse and terminate.
If, following a Change of Control, the Executive Officer is retained by
the Sterling Entities, Surviving Corporation or Parent Corporation, as the case
may be, and a Change of Control Termination occurs within the two-year period
following the effective date of a Change of Control, then the Executive Officer
shall receive the benefits as described above for a period of not less than one
(1) year or the balance of such two (2) year period, whichever is greater,
following the Change of Control. If the Executive Officer accepts an employment
offer from the Surviving Corporation or Parent Corporation, or otherwise remains
employed by a Sterling Entity following a Change of Control, regardless of
whether the circumstances of such employment would justify a termination of
employment by the Executive Officer for Good Reason, and remains so employed for
a period of two (2) years or more following the effective date of the Change of
Control, then the Executive Officer shall no longer be entitled to terminate
his/her employment for Good Reason and receive any severance benefits under this
Section 6 on the basis of a termination for Good Reason. The Executive shall
continue to be entitled to receive severance benefits under this Agreement as a
result of an Involuntary Termination.
Notwithstanding any other provision of this Section 6 to the contrary,
the aggregate present value (measured as of the Change of Control) of the
benefits to which the Executive Officer becomes entitled under this Section 6 at
the time of the Executive Officer's termination of employment will in no event
exceed in amount the dollar amount (the "Benefit Limit") which yields the
Executive Officer the greatest after-tax amount of benefits under this Section 6
after taking into account any excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), on the payments and
benefits which are provided to the Executive Officer under this Section 6 or
which constitute other parachute payments. For purposes of applying the Benefit
Limit to the Executive's benefits under this Section 6, the value of the
Executive's non-competition covenant under Section 3 shall be determined through
independent appraisal by a nationally-recognized independent accounting firm
acceptable to both the Executive Officer and Bancshares and obtained solely at
Bancshares' cost, and a portion of the Executive Officer's Section 6 benefits
shall, to the extent of such appraised value, be specifically allocated as
reasonable compensation for the Executive Officer's non-competition covenant.
For purposes of this paragraph, "Present Value" means the value, determined as
of the date of the Change of Control, of any payment in the nature of
compensation to which the Executive Officer becomes entitled in connection with
a Change of Control or the Executive Officer's subsequent termination including
the benefits to which the Executive Officer becomes entitled under this Section
6, provided, however, that such present value of each such payment will be
determined in accordance with the provisions of Section 280G of the Code,
utilizing a discount rate equal to one hundred twenty percent (120%) of the
applicable federal rate in effect at the time of such determination, compounded
semi-annually to the effective date of the change of control. In addition, for
purposes of this paragraph of this Section 6, "Other Parachute Payment" means
any payment in the nature of compensation (other than the benefits to which the
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Executive Officer becomes entitled under this Section 6) which are made to the
Executive Officer in connection with the change of control and which qualify as
parachute payments within the meaning of Section 280G(b)(2) and the Treasury
Regulations issued thereunder.
7. Other Agreements.
(a) Subject to the immediately following sentence, the parties
to this Agreement further agree that to the extent the restrictive
covenants and agreements contained in Sections 3, 4 or 5 are held by
any court or other constituted legal authority to be void or otherwise
unenforceable in any particular area or jurisdiction, then the parties
shall consider this Agreement to be amended and modified so as to
eliminate therefrom that particular area or jurisdiction as to which
such restrictive covenant is so held to be void or otherwise
unenforceable, and, as to all other areas and jurisdictions covered by
this Agreement, the terms and provisions hereof shall remain in full
force and effect as originally written. The parties to this Agreement
further agree that to the extent any of the foregoing restrictive
covenants or agreements should be held by any court or other
constituted legal authority to be effective in any particular area or
jurisdiction only if said covenant is modified to limit its duration or
scope, then the parties shall consider such covenant to be amended and
modified with respect to that particular area or jurisdiction so as to
comply with the order of any such court or other constituted legal
authority, and, as to all other jurisdictions or political subdivisions
thereof, such covenant shall remain in full force and effect as
originally written.
(b) The Executive Officer acknowledges that each of the
restrictions set forth in Sections 3, 4 and 5 is reasonable as to
duration and geographic scope.
(c) The Executive Officer understands that the Sterling
Entities will not have an adequate remedy at law for the breach or
threatened breach by the Executive Officer of any one or more of the
covenants set forth in this Agreement and agrees that in the event of
any such breach or threatened breach, Bancshares may, in addition to
the other remedies which may be available to it, file a suit in equity
to enjoin the Executive Officer from the breach or threatened breach of
such covenants.
8. No Mitigation. In no event shall the Executive Officer be obligated
to seek other employment or take other action by way of mitigation of the
amounts payable to the Executive Officer under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not Executive Officer
obtains other employment.
9. Notice. Any notice, or other communication provided or permitted in
this Agreement must be given in writing and may be served by depositing same in
the United States mail in certified or registered form, postage prepaid,
addressed to the party or parties to be notified with return receipt requested,
or by delivering the notice in person to such party or parties or by a
nationally recognized overnight service. Unless actual receipt is required by
any provision of this Agreement, notice deposited in the United States mail in
the manner herein prescribed shall be effective on dispatch. For purposes of
notice, the address of the Executive Officer shall be the address on file with
Bancshares as the Executive Officer's primary residence.
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The address of Bancshares and any Sterling Entity shall be:
Sterling Bancshares, Inc.
0000 Xxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: President & Chief Executive Officer
Bancshares shall have the right from time to time and at any time to
change its address and shall have the right to specify as its address any other
address by giving at least ten (10) days' written notice to the Executive
Officer. The Executive Officer shall have the right from time to time and at any
time to change his address and shall have the right to specify as his address
any other address by giving at least ten (10) days' written notice to
Bancshares.
10. Controlling Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Texas (without giving
effect to conflicts of laws principles thereof).
11. Entire Agreement. Except as provided in Bancshares' Code of
Business Conduct and Ethics, Code of Ethics for Senior Officers, the written
benefit plans and programs of the Sterling Entities or any signed agreement
hereafter executed between any Sterling Entity and the Executive Officer, this
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof. The Agreement may not be changed orally or by action or
inaction, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought. The headings of this Agreement are intended solely for the convenience
of reference and should be given no effect in the construction or interpretation
of this Agreement.
12. Severability. If any provision of the Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of a court of last resort, the parties shall
promptly meet and negotiate substitute provisions for those rendered or declared
illegal or unenforceable, but all remaining provisions of this Agreement shall
remain in full force and effect.
13. Benefit and Burden; Assignment.
(a) This Agreement shall not be terminated by any Change of
Control. In the event of any Business Combination, the provisions of
this Agreement shall be binding upon the Surviving Corporation, and
such Surviving Corporation shall be treated as Bancshares hereunder.
(b) Bancshares agrees that in connection with any Business
Combination, it will cause any successor entity to Bancshares and/or
Bank to unconditionally assume, by written instrument delivered to the
Executive Officer (or his/her beneficiary or estate), all of the
obligations of Bancshares hereunder. Failure of Bancshares to obtain
such assumption prior to the effective date of any such Business
Combination that constitutes a Change of Control shall be a breach of
this Agreement and shall constitute Good Reason hereunder entitling
Executive Officer to compensation and other benefits from
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Bancshares in the same amount and on the same terms as Executive
Officer would be entitled hereunder upon a Change of Control
Termination. For purposes of implementing the foregoing, the date upon
which any such Business Combination becomes effective shall be deemed
to be the date Good Reason occurs and shall be the effective date of
termination hereunder if requested by the Executive Officer.
(c) This Agreement shall inure to the benefit of and be
enforceable by the Executive Officer's personal and legal
representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If the Executive Officer shall
die while any amounts would be payable to the Executive Officer
hereunder had the Executive Officer continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to such person or persons appointed in
writing by Executive to receive such amounts or, if no person is so
appointed, to the Executive Officer's estate.
14. Voluntary Agreement. The Executive Officer acknowledges that he has
been given an opportunity to review the terms of this Agreement, that he has
been given an opportunity to consult with counsel, or determined that such
consultation is not required, and that he has executed this Agreement
voluntarily.
15. Execution. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which shall constitute one
instrument.
EXECUTED to be effective as of the date first above written.
STERLING BANCSHARES, INC.
By: /s/ X. Xxxxxx Bridgwater
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X. Xxxxxx Bridgwater
President & Chief Executive Officer
EXECUTIVE OFFICER
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
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