SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

ROLLINS JAMES D III

(Last)

(First)

(Middle)

4295 SAN FELIPE

(Street)

HOUSTON

77027

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
PROSPERITY BANCSHARES INC [ PRSP ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

	Director	10% Owner
X	Officer (give title below)	Other (specify below)
	Senior Vice President

3. Date of Earliest Transaction (Month/Day/Year)
08/12/2003

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	08/12/2003		M		20,000	A	$3.125	0⁽¹⁾	D
Common Stock	08/12/2003		M		2,000	A	$6.375	22,502⁽²⁾	D
Common Stock								4,000⁽²⁾	I	By spouse IRA
Common Stock								30,000⁽²⁾	I	Through IRA
Common Stock								19,929⁽³⁾⁽²⁾	I	Through 401(k) Plan

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Option to buy	$3.125⁽⁷⁾	08/12/2003		M			20,000⁽⁷⁾	02/10/2003⁽⁴⁾	02/10/2008	Common Stock	20,000	$0⁽⁵⁾	20,000⁽⁷⁾	D
Option to buy	$6.375⁽⁷⁾	08/12/2003		M			2,000⁽⁷⁾	05/04/2002⁽⁶⁾	05/04/2009	Common Stock	2,000	$0⁽⁵⁾	2,000⁽⁷⁾	D

Explanation of Responses:

1. The total holdings of the reporting person after giving effect to the transactions reported on this Form 4 are reported in rows 2, 3, 4 and 5 of this form.

2. As a result of the 2-for-1 stock split effective 05/31/2002, the reporting person acquired 251 additional shares of common stock. The stock split also resulted in the acquistion of (i) 2,000 additional shares of common stock by the reporting person's spouse's IRA, (ii) 15,000 shares by the reporting person's IRA and (iii) 8,743 shares by the Prosperity Bancshares, Inc. 401(k) plan for the benefit of the reporting person.

3. Includes 4,751 shares acquired through the Prosperity Bancshares, Inc. 401(k) plan since January 2002.

4. The option vests ratably over a ten year period beginning on 2/10/1999, however, no option could be exercised until 2/10/2003.

5. There was no price associated with the stock option grant.

6. The option vests 25% annually beginning on 05/04/2002.

7. As adjusted for the 2-for-1 stock split in the form of a 100% stock dividend effective 05/31/2002.

	James D. Rollins III	08/14/2003
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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