EXHIBIT 10.12
Cullen/Frost Bankers , Inc. 1992 Stock Plan, as amended
CULLEN/FROST BANKERS, INC.
1992 STOCK PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE
1.1. ESTABLISHMENT. Cullen/Frost Bankers, Inc. hereby establishes an
incentive stock plan for key employees, as described herein, which shall be
known as the CULLEN/FROST BANKERS, INC. 1992 STOCK PLAN (hereinafter referred
to as the "Plan").
1.2. PURPOSE. The Purpose of the Plan is to enable the Company and its
subsidiaries and affiliates to retain and motivate key employees, and to
encourage stock ownership by such key employees, by providing them with a means
to acquire a proprietary interest, or to increase such interest, in the success
of the Company, subject to the terms and conditions of and in the manner
contemplated by this plan.
1.3. INCENTIVES. Incentives under the Plan may be granted in any one or a
combination of (A) Restricted Stock; (B) Incentive Stock Options; (C)
Nonqualified Stock Options; and (D) Stock Appreciation Rights.
1.4. EFFECTIVE DATE. This Plan shall become effective upon its adoption by
the Board of Directors; provided, however, that the validity of the Plan and any
Incentive provided hereunder is subject to approval of the Plan at the next
shareholders meeting following its adoption by the Board of Directors. If the
shareholders fail to timely approve the Plan, the Plan and any Incentive that
may be issued hereunder shall be null and void.
SECTION 2. DEFINITIONS
2.1. DEFINITIONS. Whenever used herein, the following terms shall have the
meanings set forth below:
(a) "Board of Directors" means the Board of Directors of the Company.
(b) "Change in Control" shall mean a change in control of the Company of a
nature that would be required to be reported (assuming such event has not
been "previously reported") in response to Item 1(a) of the Current Report
on Form 8-K, as in effect on the effective date of the Plan, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"); provided that, without limitation, such a Change in
Control shall be deemed to have occurred at such time as (a) any "person,"
within the meaning of Section 14(d) of the Exchange Act, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 20 percent or more of the combined voting power
of the Company's outstanding securities ordinarily having the right to
vote for the election of directors (the "Voting Securities"); or (b)
individuals who constitute the Board of Directors on the effective date of
the Plan cease for any reason to constitute a majority thereof, provided
that any person becoming a director subsequent to the effective date of
the Plan whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least three quarters of the
directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is
named as nominee for director, without
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objection to such nomination) shall be, for purposes of this clause (b),
considered as though such person were a member of the Incumbent Board.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Compensation & Benefits Committee of the Board
of Directors.
(e) "Company" means Cullen/Frost Bankers, Inc., a Texas corporation.
(f) "Disability" means a total and permanent disability as defined in the
Company's basic retirement plan, as may be amended from time to time.
(g) "Employee" means any person employed by the Company or a subsidiary or
affiliate.
(h) "Incentive" means an Restricted Stock, Incentive Stock Option,
Nonqualified Stock Option, or Stock Appreciation Right granted pursuant to
the Plan.
(i) "Incentive Stock Option" means a Stock Option meeting the requirements
of Section 422 of the Code.
(j) "Nonqualified Stock Option" means any Stock Option, other than an
Incentive Stock Option, granted pursuant to the Plan.
(k) "Participant" means any Employee selected by the Committee to receive
a grant of an Incentive under the Plan.
(l) "Restricted Stock" means Stock granted to a Participant pursuant to
Section 6 of the Plan.
(m) Restriction Period" means that period of time determined by the
Committee during which the transfer of shares of Restricted Stock is
restricted and such shares of Restricted Stock are subject to forfeiture.
(n) "Retirement" shall be as defined in the Company's basic retirement
plan.
(o) "Stock" means the Common Stock, par value $5 per share, of the
Company.
(p) "Stock Appreciation Right" means the right to receive the appreciation
in the fair market value of shares of Stock granted pursuant to Section 8
of the Plan.
(q) "Stock Option: means any Incentive Stock Option or Nonqualified Stock
Option granted pursuant to the Plan.
2.2. GENDER AND NUMBER. Except when otherwise indicated by the context,
words in the masculine gender when used in the Plan also shall include the
feminine and neuter genders, the singular shall include the plural, and the
plural shall include the singular.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1. ELIGIBLE EMPLOYEES. Employees, who, in the opinion of the Committee,
are from time to time materially responsible for the management, growth and
protection of a material part or all of the business or functions of the Company
or a subsidiary or affiliate of the Company shall be eligible to be granted
Incentives under the Plan.
SECTION 4. ADMINISTRATION
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4.1. ADMINISTRATION. The Committee shall be responsible for the
administration and interpretation of the Plan. No member of the Committee shall
(i) be eligible to be granted Incentives under the Plan while serving on the
Committee or at any time within one year prior to his appointment to the
Committee, or (ii) receive an award of equity securities under any other plan of
the Company or any of its affiliates while serving on the Committee or at any
time within one year prior to his appointment to the Committee, except as
permitted by Rule 16b-3 under the Securities Exchange Act of 1934 without the
member being considered other than a disinterested person thereunder. The
Committee is authorized to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to provide for conditions and
assurance deemed necessary or advisable to protect the interest of the Company,
and to make all of the determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Determinations, interpretations or other actions made or
taken by the Committee pursuant to the provisions of the Plan shall be final and
binding and conclusive for all purposes and upon all persons whomsoever.
SECTION 5. STOCK SUBJECT TO THE PLAN
5.1. NUMBER. The total number of shares of Stock that may be granted under
the Plan may not exceed 800,000, subject to adjustment as provided in Section
5.3. Such shares may consist, in whole or in part, of authorized but unissued
shares of previously issued shares reacquired by the Company including shares
purchased on the open market and not reserved for any other purpose. In no event
may greater than 75,000 shares be available for issuance with respect to grants
of Restricted Stock under the Plan.
5.2. UNUSED STOCK. In the event any Incentive granted under the Plan
expires, terminates, is canceled or is forfeited and reacquired by the Company,
the shares of Stock subject to or reserved for such Incentive again shall be
available for issuance under the Plan.
5.3. RECAPITALIZATION ADJUSTMENT. In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering, or any other change in the corporate structure
of shares of capital stock of the Company, the Committee shall, subject to the
provisions of Section 7.5, make such adjustment, if any, as it may deem
appropriate in the number and kind of shares authorized by the Plan; in the
number and kind of shares covered by Incentives granted; in the case of Stock
Options, in the option price; and in the case of Stock Appreciation Rights, in
the Stock Option purchase price, or fair market value, as appropriate.
SECTION 6. RESTRICTED STOCK
6.1. GRANT OF RESTRICTED STOCK. The Committee may, in its discretion,
grant Incentives to Participants from time to time in the form of Restricted
Stock and shall determine the number of shares of Restricted Stock which will be
granted to a Participant.
6.2. RESTRICTED STOCK AGREEMENT. Each grant of shares of Restricted Stock
shall be evidenced by a Restricted Stock Agreement and shall be subject to the
following terms and conditions and such other terms and conditions as the
Committee may prescribe.
6.3. RESTRICTION PERIOD. At the time of the grant of shares of Restricted
Stock, the Committee shall select the Restriction Period to apply to the shares
of Restricted Stock.
6.4. NONTRANSFERABILITY OF RESTRICTED STOCK. Prior to the lapse of
restrictions as provided in Section 6.5, shares of Restricted Stock may not be
sold, exchanged, transferred, pledged, assigned, or otherwise alienated,
hypothecated, whether voluntarily or involuntarily.
6.5. REMOVAL OF RESTRICTIONS. Except as otherwise provided in Section 6.9,
and subject to Section 6.6, shares of Restricted Stock covered by each
Restricted Stock grant made under this Plan shall become freely transferable by
the Participant after the expiration of the Restriction Period or upon
satisfaction of other conditions as specified by the Committee in its sole
discretion.
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6.6. OTHER RESTRICTIONS. The Company shall impose such other restrictions
on any shares granted pursuant to this Plan as it may deem advisable including,
without limitation, restrictions under applicable Federal laws, under the
requirements of any stock exchange or interdealer quotation system upon which
share of shares of the same class are then listed or quoted and under blue sky
or state securities laws applicable to such shares. The Company may legend the
certificates representing Restricted Stock to give appropriate notice of such
restrictions.
6.7. CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to Section 6.6 hereof, each certificate representing shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:
The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer set forth in the Cullen/Frost
Bankers, Inc. 1992 Stock Plan, and a Restricted Stock Agreement dated
___________. A copy of the Plan, such rules, and the Restricted Stock
Agreement may be obtained from the Secretary of Cullen/Frost Bankers, Inc.
6.8. VOTING RIGHTS AND DIVIDENDS WITH RESPECT TO RESTRICTED STOCK. With
respect to shares of Restricted Stock, prior to the lapse of restrictions under
Section 6.5, each Participant shall generally have the rights and privileges of
a shareholder, including the right to vote the shares and to receive dividends
and other distributions made with respect to the shares; provided, however, that
the shares of Restricted Stock shall be subject to all the terms, conditions,
and restrictions of the Plan and the Restricted Stock Agreement, including,
without limitation, the provisions of this Section 6.
6.9. CHANGE IN CONTROL. In the event of a Change in Control, the
applicable Restriction Period with respect to all outstanding shares of
Restricted Stock shall automatically terminate.
SECTION 7. STOCK OPTIONS
7.1. GRANT OF STOCK OPTIONS. The Committee may, in its discretion, grant
Stock Options which are Incentive Stock Options or Nonqualified Options, and
such Stock Options shall be subject to the following terms and conditions and
such other terms and conditions as the Committee may prescribe.
7.2. OPTION AGREEMENTS. Each Stock Option shall be evidenced by an Option
Agreement and shall contain such terms and conditions as may be approved by the
Committee. Each Stock Option and all rights granted thereunder shall not be
transferable other than by will or the laws of descent and distribution, and
shall be exercisable during the optionee's lifetime only by the optionee or his
guardian or legal representative. If, upon the recommendation of the Committee,
the Board of Directors shall determine that, in order to carry out the purposes
of the Plan, it is necessary or desirable to reduce the purchase price of Stock
issued under any Option, then the Board of Directors may amend any Option (i) to
reduce the exercise price, provided that in no case shall such exercise price be
reduced below the fair market value (as determined by the Committee) of the
Stock subject to such Option at the time the Option is amended and (ii) to
reduce the number of shares of Stock for which such Option is exercisable,
provided, that no such reduction shall be made without consent of the Optionee.
7.3. OPTION PRICE; MEDIUM OF PAYMENT. The purchase price of Stock issued
under each Stock Option shall be determined by the Committee, but shall not be
less than the fair market value (as determined by the Committee) of the Stock
subject to the Stock Option at the time the Stock Option is granted. Payment of
such purchase price shall be made in cash or, if provided in the Option
Agreement, payment of such purchase price may be in shares of Stock which have
been held by the Participant for more than six months, or any combination of
both cash and shares of Stock; in such case, shares of Stock delivered to the
Company as payment for Stock issued upon exercise of an Option shall be valued
at their fair market value (as determined by the Committee) or their par value,
if higher.
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7.4. EXERCISE OF STOCK OPTION. The shares covered by a Stock Option may be
purchased in such installments and on such exercise dates as the Committee may
determine. Any shares not purchased on the applicable exercise date may be
purchased thereafter at any time prior to the expiration of the Stock Option.
7.5. MERGER OR CONSOLIDATION. If the Company merges or consolidates with
one or more corporations and the Company shall be the surviving corporation
(other than as a subsidiary of another corporation or other entity), thereafter
upon any exercise of a Stock Option theretofore granted the optionee shall be
entitled to purchase under such Stock Option, in lieu of the number of shares of
Stock as to which such Stock Option would be exercisable, the number and class
of shares of stock and securities to which the Participant would have been
entitled pursuant to the terms of the agreement of merger or consolidation if,
immediately prior to such merger or consolidation, the Participant had been the
holder of record of the number of shares of Stock as to which such Stock Option
would be exercisable. If the Company shall not be the surviving corporation in
any merger or consolidation or shall survive only as a wholly-owned subsidiary
of another corporation or other entity, or if the Company is to be dissolved or
liquidated, then unless the surviving corporation (or the parent corporation or
other entity if the Company shall survive only as a subsidiary) assumes or
substitutes new options for all Stock Options then outstanding, (i) the time at
which all Stock Options then outstanding, may be exercised shall be accelerated
and all such Stock Options shall become exercisable in full on or before a date
fixed by the Company prior to the effective date such merger or consolidation or
such dissolution or liquidation, and (ii) upon such effective date any
unexercised Stock Options shall expire.
7.6. CHANGE IN CONTROL. Any Option Agreement may provide that if at any
time there shall occur a Change in Control, then the time at which the Stock
Option evidenced thereby may be exercised shall be accelerated and the Stock
Option shall immediately become exercisable in full.
SECTION 8. STOCK APPRECIATION RIGHTS
8.1. GRANT OF STOCK APPRECIATION RIGHT. The Committee may, in its
discretion, grant Stock Appreciation Rights in tandem with a Stock Option, in
addition to a Stock Option or freestanding and unrelated to a Stock Option. If a
Stock Appreciation Right is granted otherwise than in tandem with a Stock
Option, the Committee shall determine the number of shares of Stock covered by
such Stock Appreciation Right. Stock Appreciation Rights shall be subject to the
following terms and conditions and such other terms and conditions as the
Committee may prescribe.
8.2. TIME AND PERIOD OF GRANT. If a Stock Appreciation Right is granted
with respect to a Stock Option, it may be granted at the time of the grant of
the Stock Option or at any time thereafter. If a Stock Appreciation Right is
granted in tandem with any Stock Option at the time the Stock Appreciation Right
is granted the Committee may limit the exercise period for such Stock
Appreciation Right. In no event shall the exercise period for a Stock
Appreciation Right in tandem with any Stock Option exceed the exercise period
for such Stock Option. If a Stock Appreciation Right is granted without being
related to an underlying Stock Option, the period for exercise of the Stock
Appreciation Right shall be set by the Committee at the time of grant.
8.3. VALUE OF STOCK APPRECIATION RIGHT. If a Stock Appreciation Right is
granted in tandem with a Stock Option, the Participant will be entitled to
surrender the Stock Option at any time such Stock Option is exercisable and
receive in exchange therefor an amount equal to (i) the excess of the fair
market value of one share of the Stock on the date the election to surrender is
received by the Company over the Stock Option purchase price, multiplied by (ii)
the number of shares of Stock covered by the Stock Option which is surrendered.
If a Stock Appreciation Right is granted otherwise than in tandem with a Stock
Option, the Participant will receive upon exercise of the Stock Appreciation
Right an amount equal to (i) the excess of the fair market value of one share of
the Stock on the date the election to exercise such Stock Appreciation Right is
received by the Company over the fair market value of one share of the Stock on
the date of grant, multiplied by (ii) the number of shares of Stock covered by
the Stock Appreciation Right.
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8.4. PAYMENT OF STOCK APPRECIATION RIGHT. Payment of a Stock Appreciation
Right shall be in the form of shares of Common Stock, cash, or any combination
of shares and cash. The form of payment upon exercise of such a right shall be
determined by the Committee either at the time of grant of the Stock
Appreciation Right or at the time of exercise of the Stock Appreciation Right.
8.5. CHANGE IN CONTROL. Any Stock Appreciation Right may provide that if
at any time there shall occur a Change in Control, then the time at which the
Stock Appreciation Right may be exercised shall be accelerated and the Stock
Appreciation Right shall immediately become exercisable in full.
SECTION 9. MISCELLANEOUS
9.1. NO RIGHT TO EMPLOYMENT. Nothing in the Plan or in the terms of any
Incentive granted under the Plan shall in any manner be construed to limit or
restrict in any way the right of the Company or its subsidiaries or affiliates
to terminate any Participant's employment at any time and without regard to the
effect of such termination on the Participant under the Plan, nor confer upon
any Participant any right to continue in the employ of the Company or its
subsidiaries or affiliates.
9.2. TAX WITHHOLDING. The Company shall have the right to deduct from all
payments any Federal, state, or local taxes required by law to be withheld with
respect to such payments, and the Participant or other person receiving shares
of Stock pursuant to the Plan may be required to pay the Company, as
appropriate, the amount of any such taxes which the Company is required to
withhold with respect to such Stock. A Participant may elect, subject to the
approval of the Committee, to have a portion of the shares of Stock which would
otherwise be transferred to the Participant under the Plan withheld by the
Company to satisfy the tax withholding requirement of this Section.
9.3. GOVERNING LAW. The Plan, and all agreements and other documents
delivered hereunder, shall be construed in accordance with and governed by the
laws of the State of Texas.
9.4. EXPENSE OF PLAN. The expenses of administering the Plan shall be
borne by the Company.
9.5. AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors in its
discretion may amend or terminate the Plan at any time; provided, that no
amendment or termination that shall affect any Incentive theretofore granted may
be made which would impair the rights of the Participant without the consent of
such Participant; and provided, further, that the Board of Directors may not
make any amendment without the approval of the shareholders of the Company if
such approval is necessary in order for the Plan to continue to comply with Rule
16b-3 under the Securities Exchange Act of 1934.
9.6. DURATION OF THE PLAN. Subject to the Board's right to earlier
terminate the Plan pursuant to Section 9.5 hereof, the Plan shall terminate not
later than ten (10) years after the date of adoption of the Plan by the Board
and no Incentives shall be granted after termination of the Plan; provided,
however, that termination of the Plan will not adversely affect any Incentives
granted prior to termination of the Plan.
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