(e) Amended and Restated Employment Agreement.

On December 29, 2008, the Company entered into an Amended and Restated Employment Agreement, effective January 1, 2007 (the "New Employment Agreement"), with J. Downey Bridgwater, modifying the existing employment agreement between the Company and Mr. Bridgwater (the "Old Employment Agreement"). The Old Employment Agreement contained provisions stating if, prior to the expiration of the employment term and prior to a change of control, the Company terminates Mr. Bridgwater's employment without cause, or Mr. Bridgwater voluntarily resigns for "good reason," the Company shall be obligated to pay Mr. Bridgwater a lump sum cash payment in an amount equal to the aggregate base salary that he would have earned through the remainder of the employment term, and shall be obligated to continue the provision of benefits as provided in the Old Employment Agreement through the employment term. The New Employment Agreement expands the definition of "good reason" to include any material and adverse change in Mr. Bridgwater's direct reporting relationship to the Board of Directors of the Company.

Additionally, the Old Employment Agreement contained provisions stating if, following a change of control, the Company terminates Mr. Bridgwater's employment, or Mr. Bridgwater voluntarily resigns for good reason, the Company shall be obligated to pay Mr. Bridgwater a lump sum cash payment equal to three times his base salary and cash bonus, and shall be obligated to continue benefits through the remainder of the employment term or three years after the change of control, whichever is greater. Notwithstanding the foregoing, the Old Employment Agreement stated that the Company was not obligated to provide such severance and benefits following a change of control if the Company terminates Mr. Bridgwater's employment for death or disability or Mr. Bridgwater voluntarily resigns for other than good reason. The New Employment Agreement expands these exceptions to include termination of Mr. Bridgwater's employment by the Company for cause or for Mr. Bridgwater's material breach of any provision of the New Employment Agreement. This amendment creates a more traditional "double trigger" in change of control scenarios.

Finally, the New Employment Agreement allows the Company to defer all or a portion of a payment to Mr. Bridgwater pursuant to the Compensation and Benefits section of the New Employment Agreement, in the event that the payment is not deemed "qualified performance-based compensation" under Section 162(m) of the Internal Revenue Code ("Section 162(m)"), until such time as (i) Mr. Bridgwater is no longer a "covered employee" under Section 162(m), or (ii) the fist calendar year the Company reasonably anticipates that the payment can be made without causing a loss of tax deductions under Section 162(m).

(d) Exhibits

Exhibit No.   Description
10.1          Amended and Restated Employment Agreement between Sterling Bancshares,
              Inc., a Texas corporation, and J. Downey Bridgwater effective January 1,
              2007.