X0202 4 2007-01-30 0 0001068851 PROSPERITY BANCSHARES INC PRSP 0001136856 HOLMES NED S 55 WAUGH DRIVE, SUITE 1111 HOUSTON TX 77027 1 0 0 0 Contract to Sell 2007-01-30 4 J 0 100000 A 2009-01-30 Common Stock 100000 0 D Contract to Sell 2007-01-30 4 J 0 100000 A 2009-01-30 Common Stock 100000 0 I By HF Properties, Ltd. On January 30, 2007, Mr. Holmes entered into a variable pre-paid forward contract (the "Contract") with Credit Suisse Capital LLC ("CS") and Credit Suisse Securities (USA) LLC, as agent, relating to 100,000 shares of Common Stock, which Contract expires on 1/30/2009 (the "Maturity Date"). The Contract provides that on the Maturity Date, Mr. Holmes will deliver, in the aggregate, a number of shares of Common Stock to CS (or the cash equivalent of such shares) as follows: (i) if the settlement price is less than the downside floor price of $27.2635, 100,000 shares of Common Stock; and (ii) if the settlement price is equal to or greater than the downside floor price (with a cap price of $47.7112), between 57,143 and 100,000 shares of Common Stock (subject to adjustment for capital restructurings), dependent on the settlement price. Pursuant to the Contract, Mr. Holmes has the option to settle the Contract in cash, with the cash settlement amount being equal to the number of shares to be delivered multiplied by the relevant price. Mr. Holmes has pledged 100,000 shares of Common Stock to CS as security for his obligation to deliver the shares at termination of the Contract. On January 30, 2007, HF Properties, Ltd. entered into a variable pre-paid forward contract (the "Contract") with Credit Suisse Capital LLC ("CS") and Credit Suisse Securities (USA) LLC, as agent, relating to 100,000 shares of Common Stock, which Contract expires on 1/30/2009 (the "Maturity Date"). The Contract provides that on the Maturity Date, HF Properties, Ltd. will deliver, in the aggregate, a number of shares of Common Stock to CS (or the cash equivalent of such shares) as follows: (i) if the settlement price is less than the downside floor price of $27.2635, 100,000 shares of Common Stock; and (ii) if the settlement price is equal to or greater than the downside floor price (with a cap price of $47.7112), between 57,143 and 100,000 shares of Common Stock (subject to adjustment for capital restructurings), dependent on the settlement price. Pursuant to the Contract, HF Properties has the option to settle the Contract in cash, with the cash settlement amount being equal to the number of shares to be delivered multiplied by the relevant price. HF Properties has pledged 100,000 shares of Common Stock to CS as security for its obligation to deliver the shares at termination of the Contract. Ned S. Holmes 2007-02-01