EXHIBIT 10.11

              Cullen/Frost Bankers, Inc. 1997 Directors Stock Plan

             CULLEN/FROST BANKERS, INC. 1997 DIRECTOR STOCK PLAN
                         (EFFECTIVE AS OF MAY 28, 1997)


ARTICLE 1.  ESTABLISHMENT, OBJECTIVES, AND DURATION

   1.1.  ESTABLISHMENT OF THE PLAN. Cullen/Frost Bankers, Inc., a Texas
corporation (hereinafter, together with its Subsidiaries and successors thereto
as provided in Article 10 herein, referred to as the "Company"), hereby
establishes an incentive compensation plan to be known as the "1997 Director
Stock Plan" (the "Plan"), as set forth in this document. The Plan permits the
grant of Nonqualified Stock Options.

   Subject to approval by the Company's stockholders, the Plan shall become
effective as of May 28, 1997 (the "Effective Date") and shall remain in effect
as provided in Section 1.3 thereof.

   1.2. OBJECTIVES OF THE PLAN. The objectives of the Plan are to link the
interests of Outside Directors to those of the Company's stockholders by
providing for the ability to pay some or all of the Outside Directors'
compensation through stock options and to optimize the profitability and growth
of the Company through incentives which are consistent with the Company's goals.

   The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Outside Directors who
make significant contributions to the Company's success and to allow Outside
Directors to share in the success of the Company.

      1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date,
as described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Committee to amend or terminate the Plan at any time pursuant to
Article 8 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Plan's provisions.

ARTICLE 2. DEFINITIONS

      Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:

      2.1. "AWARD" means, individually or collectively, a grant under this Plan
of Nonqualified Stock Options.

      2.2. "AWARD AGREEMENT" means an agreement entered into by the Company and
each Outside Director setting forth the terms and provisions applicable to
Awards granted under this Plan.

      2.3.  "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of
Cullen/Frost Bankers, Inc.

      2.4.  "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.

      2.5. "COMMITTEE" means the Compensation and Benefits Committee appointed
by the Board to administer Awards to Outside Directors, as specified in Article
3 herein. Any such Committee shall be comprised entirely of Outside Directors.

      2.6.  "DIRECTOR" means any individual who is a member of the Board of
Directors of Cullen/Frost Bankers, Inc.

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      2.7. "EMPLOYEE" means any employee of the Company. Directors who are
employed by the Company shall be considered Employees under this Plan.

      2.8. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.

      2.9. "FAIR MARKET VALUE" shall be determined for a relevant date on the
basis of the closing price of the Shares on the NASDAQ National Market, or any
other national stock exchange on which the Shares are traded, or if there is no
such sale on the relevant date, on the last preceding trading day on which such
Shares were traded.

      2.10. "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase
Shares granted under Article 5 herein and which is not intended to meet the
requirements of Code Section 422.

      2.11. "OPTION PRICE" means the price at which a Share may be purchased by
an Outside Director pursuant to an NQSO.

      2.12.  "OUTSIDE DIRECTOR" means an individual who is a member of the
Board of Directors, but who is not an Employee of the Company.

      2.13.  "SHARES" means the shares of Common Stock, par value $5 per
share, of the Company.

      2.14. "SUBSIDIARY" means any corporation, partnership, joint venture, or
other entity in which the Company has a majority voting interest.

ARTICLE 3. ADMINISTRATION

      3.1. GENERAL. The Plan shall be administered by the Committee. The members
of the Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors.

      3.2. AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to determine the sizes
and types of Awards; determine the terms and conditions of Awards in a manner
consistent with the Plan; construe and interpret the Plan and any agreement or
instrument entered into under the Plan; establish, amend, or waive rules and
regulations for the Plan's administration; and (subject to the provisions of
Article 8 herein) amend the terms and conditions of any outstanding Award as
provided in the Plan. Further, the Committee shall make all other determinations
which may be necessary or advisable for the administration of the Plan. As
permitted by law, the Committee shall have the authority to delegate
administrative duties to officers or Directors of the Company, and the Committee
may otherwise delegate its authority as identified herein.

      3.3. DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Committee shall be final, conclusive and binding on all
persons, including the Company, its stockholders, Directors, Employees, and
their estates and beneficiaries.

ARTICLE 4. SHARES SUBJECT TO THE PLAN

      4.1. NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as
provided in Section 4.2 herein, the number of Shares hereby reserved for
issuance to Outside Directors under the Plan shall be no more than one hundred
fifty thousand (150,000). The Committee shall determine the appropriate
methodology for calculating the number of shares issued pursuant to the Plan.
The maximum aggregate number of Shares that may be granted in the form of
Nonqualified Stock Options granted in any one fiscal year under the Plan to any
one Outside Director shall be five thousand (5,000).

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      4.2. ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares which may be delivered under
Section 4.1, and in the number and class of and/or price of Shares subject to
outstanding Awards granted under the Plan, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or enlargement of rights; provided, however, that the number of Shares
subject to any Award shall always be a whole number.

ARTICLE 5. NONQUALIFIED STOCK OPTIONS

      5.1. AWARD OF NQSOS. Subject to the terms and provisions of the Plan,
NQSOs may be awarded to Outside Directors in such number, and upon such terms,
and at any time and from time to time as shall be determined by the Committee.

      5.2. AWARD AGREEMENT. Each NQSO Award shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine.

      5.3. OPTION PRICE. The Option Price for each grant of an NQSO under this
Plan shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the NQSO is granted.

      5.4. DURATION OF OPTIONS. Each NQSO granted to an Outside Director shall
expire at such time as the Committee shall determine at the time of grant.

      5.5. EXERCISE OF OPTIONS. NQSOs granted under this Article 5 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Outside Director. In no event should the exercise period
exceed a maximum of ten years.

      5.6. PAYMENT. NQSOs granted under this Article 5 shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the NQSO is to be exercised, accompanied
by full payment for the Shares.

      The Option Price upon exercise of any NQSO shall be payable to the Company
in full either: (a) in cash or its equivalent, or (b) by tendering previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Shares which are tendered
must have been held by the Outside Director for at least six (6) months prior to
their tender to satisfy the Option Price), or (c) by a combination of (a) and
(b).

      The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law.

      Subject to any governing rules or regulations, as soon as practicable
after receipt of a written notification of exercise and full payment, the
Company shall deliver to the Outside Director, in the Outside Director's name,
Share certificates in an appropriate amount based upon the number of Shares
purchased under the NQSO.

      5.7. RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an NQSO granted
under this Article 5 as it may deem advisable, including, without limitation,
restrictions under applicable federal securities laws, under the 

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requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.

      5.8. TERMINATION OF DIRECTORSHIP. Each Outside Director's Award Agreement
shall set forth the extent to which the Outside Director shall have the right to
exercise the NQSO following termination of the Outside Director's directorship
with the Company. Such provisions shall be determined in the sole discretion of
the Committee, shall be included in the Award Agreement entered into with each
Outside Director, need not be uniform among all NQSOs issued pursuant to this
Article 5, and may reflect distinctions based on the reasons for termination.

      5.9. NONTRANSFERABILITY OF NQSOS. Except as otherwise provided by the
Committee, no NQSO granted under this Article 5 may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. Further, except as otherwise provided
in a Outside Director's Award Agreement, all NQSOs granted to a Outside Director
under this Article 5 shall be exercisable during his lifetime only by such
Outside Director.

ARTICLE 6. BENEFICIARY DESIGNATION

      Each Outside Director under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Outside Director, shall be in a form
prescribed by the Company, and will be effective only when filed by the Outside
Director in writing with the Company during the Outside Director's lifetime. In
the absence of any such designation, benefits remaining unpaid at the Outside
Director's death shall be paid to the Outside Director's estate.

ARTICLE 7. RIGHTS OF DIRECTORS

      Nothing in the Plan shall interfere with or limit in any way the right of
the Company's shareholders to terminate any Outside Director's service at any
time, nor confer upon any Outside Director any right to continue in the service
of the Company.

ARTICLE 8. AMENDMENT, MODIFICATION, AND TERMINATION

      8.1. AMENDMENT, MODIFICATION, AND TERMINATION. Subject to the terms of the
Plan, the Committee may at any time and from time to time, alter, amend, suspend
or terminate the Plan in whole or in part.

      8.2. ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan.

      8.3. AWARDS PREVIOUSLY GRANTED. Notwithstanding any other provision of the
Plan to the contrary, no termination, amendment, or modification of the Plan
shall adversely affect in any material way any Award previously granted under
the Plan, without the written consent of the Outside Director holding such
Award.

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ARTICLE 9. INDEMNIFICATION

      Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgement in any such action, suit, or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and defend it on his
or her own behalf. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

ARTICLE 10. SUCCESSORS

      All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

ARTICLE 11. LEGAL CONSTRUCTION

      11.1. GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

      11.2. SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

      11.3. REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

      11.4. SECURITIES LAW COMPLIANCE. Transactions under this Plan are intended
to comply with all applicable conditions of Rule 16b-3 or its successors under
the Exchange Act.

      11.5.  GOVERNING LAW. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Texas.

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