Exhibit 10.12

Cullen/Frost
Restoration Profit Sharing Plan

(Effective as of January 1, 2002)

 

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Contents

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  Article 1. Establishment and Purpose     1  
1.1
  Establishment of Plan     1  
1.2
  Purpose     1  
1.3
  Application of the Plan     1  
 
           

  Article 2. Definitions and Construction     2  
2.1
  Definitions     2  
2.2
  Gender and Number; Headings     3  
2.3
  Incorporation of the Profit Sharing Plan     3  
 
           

  Article 3. Participation     4  
3.1
  Eligible Participants     4  
3.2
  Participation; Membership     4  
 
           

  Article 4. Contributions; Vesting; Distributions     5  
4.1
  Restoration Contributions     5  
4.2
  Vesting     5  
4.3
  Time of Payments     6  
4.4
  Withdrawals and Loans     6  
4.5
  Form of Payment     6  
4.6
  Accelerated Distribution     6  
 
           

  Article 5. Accounts; Credited Earnings     8  
5.1
  Accounts     8  
5.2
  Crediting Restoration Contributions     8  
5.3
  Credited Earnings     8  
5.4
  Adjustment of Accounts     9  
5.5
  Account Balances     10  
5.6
  Account Statements     10  
 
           

  Article 6. Administration     11  
6.1
  Administration     11  
6.2
  Finality of Determination     11  
6.3
  Expenses     11  

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6.4
  Indemnification and Exculpation     11  
 
           

  Article 7. Funding of the Plan     12  
7.1
  Funding     12  
7.2
  Fund Account     12  
 
           

  Article 8. Merger, Amendment, and Termination     13  
8.1
  Merger, Consolidation, or Acquisition     13  
8.2
  Amendment and Termination     13  
 
           

  Article 9. Adoption Procedure     14  
9.1
  Adoption Procedure     14  
9.2
  Withdrawal of Participating Employer     14  
 
           

  Article 10. General Provisions     15  
10.1
  Beneficiary Designations     15  
10.2
  Nonalienation     15  
10.3
  Effect on Other Benefit Plans     15  
10.4
  Employer-Employee Relationship     15  
10.5
  Incompetence     16  
10.6
  Binding on Employer, Members and Their Successors     16  
10.7
  Tax Liability     16  
10.8
  Severability     16  
10.9
  Applicable Law     16  
 
           
Appendix A: Participating Employers Under the Plan
    18  
Appendix B: Eligible Participants Under the Plan
    19  

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Article 1. Establishment and Purpose

1.1 Establishment of Plan

Cullen/Frost Bankers, Inc. (“Company”) hereby establishes, effective as of
January 1, 2002, an unfunded supplemental executive retirement plan to be known
as the “Cullen/Frost Restoration Profit Sharing Plan” (“Plan”).

1.2 Purpose

The Company maintains a tax-qualified defined contribution plan known as the
“Cullen/Frost Profit Sharing Plan,” established effective as of January 1, 2002
and as amended thereafter (“Profit Sharing Plan”). This Plan is hereby
established and is maintained for the purpose of providing Eligible Participants
who are “Participants” under the Profit Sharing Plan with supplemental
retirement benefits which are designed to restore benefits which such Eligible
Participants would otherwise be eligible to receive under the Profit Sharing
Plan absent the application of the Applicable Code Restrictions (as defined
herein). In this regard, it is the intent that this Plan constitute a separate
unfunded plan that meets the requirements of and that is classified as a plan
which is maintained primarily for the purpose of providing deferred compensation
for a select group of management or highly compensated employees within the
meaning of Section 201(2) of ERISA, and as such that the Plan be exempt from the
relevant requirements of Title I of ERISA. This Plan is not intended to satisfy
the qualification requirements of Code Section 401.

1.3 Application of the Plan

The terms of this Plan are applicable only to or with respect to those Eligible
Participants who become Eligible Participants under this Plan on or after
January 1, 2002.

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Article 2. Definitions and Construction

2.1 Definitions

All terms used in this Plan shall have the same meanings assigned to them under
the provisions of the Profit Sharing Plan unless otherwise qualified by the
context hereof. Notwithstanding the prior sentence, the following terms shall
have the meanings set forth below, unless their context clearly indicates to the
contrary:

(a)   “Account” means the recordkeeping account which is maintained in the name
of a Member to account for any Restoration Contributions and Credited Earnings
which may be credited to his Account from time to time.   (b)   “Applicable Code
Restrictions” means the compensation or contribution limitations and
restrictions that are applicable under Code Sections 401(a)(17) and 415.   (c)  
“Beneficiary” means the person or persons designated by a Member, as provided in
Section 10.1. Where the context dictates, the term “Beneficiary” shall also mean
“Beneficiaries.”   (d)   “Company” means Cullen/Frost Bankers, Inc., or any
successor thereto.   (e)   “Compensation Committee” means the Compensation
Committee of the Board of Directors.   (f)   “Credited Earnings” means the
earnings or loss amounts credited to a Member’s Account, as provided in
Section 5.3.   (g)   “Eligible Participant” means an Employee of an Employer who
(1) is a Participant under the Profit Sharing Plan, and (2) who is designated as
an “Eligible Participant” as provided in Section 3.1.   (h)   “Employer” means
the Company and each other Employer who is a participating Employer under the
Profit Sharing Plan and who has elected to become a participating Employer under
this Plan as provided in Article 9.   (i)   “Fund Account” means the “unfunded”
trust arrangement as described in Section 7.2.   (j)   “Investment Fund” means
any investment fund that may be maintained in the Fund Account from time to
time.

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(k)   “Member” means an Eligible Participant or former Eligible Participant as
described in Section 3.2.   (l)   “Plan” means the “Cullen/Frost Restoration
Profit Sharing Plan” as set forth in this document and as the same may be
amended from time to time.   (m)   “Restoration Contributions” means the
contributions as described in Section 4.1.   (n)   “Profit Sharing Plan” means
the “Cullen/Frost Profit Sharing Plan,” effective as of January 1, 2002, and as
the same may thereafter be amended from time to time.

2.2 Gender and Number; Headings

Except when otherwise indicated by the context, any masculine terminology when
used in this Plan shall also include the feminine gender, and the definition of
any term in the singular shall also include the plural. Headings of Articles and
Sections herein are included solely for convenience, and if there is any
conflict between such headings and the text of the Plan, the text shall control.

2.3 Incorporation of the Profit Sharing Plan

The Profit Sharing Plan is hereby incorporated by reference into and shall form
a part of this Plan as fully as if set forth herein verbatim. Any amendment made
to the Profit Sharing Plan shall also be incorporated by reference into and form
a part of this Plan, effective as of the effective date of such amendment. The
Profit Sharing Plan, whenever referred to in this Plan, shall mean the Profit
Sharing Plan as amended, as such plan exists as of the date any determination is
made of benefits payable under this Plan.

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Article 3. Participation

3.1 Eligible Participants

The Compensation Committee shall designate the key management Employees who are
to be the Eligible Participants under this Plan; provided, however, that any
Employee so designated for participation under this Plan must be a Participant
under the Profit Sharing Plan. Such designations may be based on participation
criteria established by the Compensation Committee from time to time. The
Compensation Committee may terminate the “Eligible Participant” status of any
designated Participant at any time. Once an Eligible Participant has been
designated in “Eligible Participant” status, he shall thereafter remain an
Eligible Participant under the Plan so long as such status has not been
terminated by the Compensation Committee. The Compensation Committee may
establish such procedures as it deems appropriate for notifying Participants of
their status as Eligible Participants under this Plan. The Participants who are
designated as Eligible Participants shall be listed in Appendix B attached to
the end of the Plan document.

3.2 Participation; Membership

An Eligible Participant as described in Section 3.1 shall become a Member under
the Plan on the first date on which a Restoration Contribution is credited to
his Account. An Eligible Participant with an Account balance under the Plan
shall be a “Member” under the Plan. In addition, an Eligible Participant who
ceases to be an Eligible Participant by reason of loss of Eligible Participant
status or by termination or transfer of employment shall continue as a Member of
the Plan so long as he has an Account balance credited to his account under the
Plan.

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Article 4. Contributions; Vesting; Distributions

4.1 Restoration Contributions

(a)   In General. For each Plan Year, each Employer shall determine the
Restoration Contribution (if any) on behalf of each Eligible Participant
employed by the Employer during the Plan Year. The Restoration Contribution for
each Eligible Participant for each Plan Year shall be determined on an annual
basis as of the end of the Plan Year, and such a determination shall be made at
such time following the Plan Year when it is determined that a Restoration
Contribution can be calculated. For purposes of determining a Restoration
Contribution under this Section 4.1, an Eligible Participant shall only be
eligible to receive a Restoration Contribution if he meets the eligibility
requirements for a Contribution under the Contribution provisions of Section 4.2
of the Profit Sharing Plan.   (b)   Amount of Restoration Contributions. For
each Plan Year beginning with the 2002 Plan Year, the amount of the Restoration
Contribution for each Eligible Participant for the Plan Year shall be the
difference between (1) and (2) below where—

  (1)   is the total amount of Contributions that the Eligible Participant would
be eligible to receive for the Plan Year under the provisions of Section 4.2 of
the Profit Sharing Plan, determined without regard to the Applicable Code
Restrictions, and     (2)   is the total amount of Contributions that the
Eligible Participant is actually credited with under Section 4.2 of the Profit
Sharing Plan for the Plan Year, determined after the application of the
Applicable Code Restrictions.

4.2 Vesting

The various amounts credited to a Member’s Account under this Plan shall become
vested at the same time, manner and rate as any such amounts would have become
vested under the Profit Sharing Plan. All Service recognized for vesting
purposes under the Profit Sharing Plan shall be recognized under this Plan for
purposes of determining a Member’s vested interest in the benefits provided
hereunder. The determination of a Member’s vested interest with respect to his
Account shall be applied not only to the Restoration Contributions credited
thereto but also with respect to any attributable Credited Earnings to be
credited to such Account. A Member’s nonvested interest in his Account under
this Plan shall be forfeited at the same time a forfeiture would occur under the
Profit Sharing Plan.

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4.3 Time of Payments

Except as otherwise provided in this Article 4 or elsewhere in the Plan, a
Member shall become eligible to receive (or have paid in the case of his death)
a distribution of his vested interest in his Account under the Plan upon the
occurrence of one of the events giving rise to a distribution under the Profit
Sharing Plan, such as death or other termination of employment. All amounts in
the Member’s Account which have not been paid as of the Member’s death shall be
paid to his Beneficiary. All benefit payments shall be made on or as soon as
administratively practicable after the earliest date that distributions are
available under the Profit Sharing Plan. The value of the Member’s Account for
which a distribution is being made shall be determined as of the valuation on
the relevant date as provided in Section 5.5 on which the distribution payment
is being made.

4.4 Withdrawals and Loans

A Member shall not be permitted to make any withdrawals or loans from his
Account under this Plan. No in-service distributions shall be allowed under the
Plan.

4.5 Form of Payment

All distributions with respect to a Member’s Account shall be in the form of
cash or cash equivalents, and shall be made in a single lump sum payment form.

4.6 Accelerated Distribution

Notwithstanding the foregoing provisions of this Article 4, a Member may elect
to receive an accelerated Plan distribution in accordance with this Section 4.6
in the event of a “Change in Control” as defined in this Section 4.6. Such
election shall be made on a form as prescribed by the Committee, and the
election must be made by no later than one hundred and twenty (120) days
following the date on which the Committee determines there has been a Change in
Control. A Member so electing to receive an accelerated distribution under this
Section 4.6 shall receive a distribution that is equal to 80 percent of the
distribution the Member would otherwise receive determined as if he was
terminating employment, and determined by reference to an Account valuation as
in the case of a termination distribution. The accelerated distribution shall be
paid in a single lump sum payment form, and shall be made as soon as
administratively practicable following the relevant election. The remaining
20 percent portion of the Member’s Account shall be permanently forfeited at the
time he receives an accelerated distribution under this Section 4.6. For
purposes of this Section 4.6, a “Change of Control” shall occur if—

(a)   A “person” (as defined in Section 3(a)(9) of the Securities Exchange Act
of 1934, as amended, including a “group” as defined in Section 13(d)(3) of such
Act) becomes the beneficial owner of shares of the Company having 50 percent or
more of the Company’s total voting power without the approval, recommendation or
support of the members of the Board of Directors seated prior thereto; or

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(b)   As a result of, or in connection with, any cash tender or exchange offer,
merger or any other business combination, sale of assets, or contested election,
or any combination thereof, the persons who were members of the Board of
Directors before such event(s) shall cease to constitute a majority of the
members of such Board (of the Company or any successor corporation) thereafter.

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Article 5. Accounts; Credited Earnings

5.1 Accounts

The Committee shall maintain, or cause to be maintained, a bookkeeping Account
for each Member for the purpose of accounting for the Member’s beneficial
interest under the Plan, which interest is attributable to Restoration
Contributions and any Credited Earnings credited to such Member under the Plan,
as adjusted to reflect charges against such Account. In addition to the
foregoing bookkeeping Accounts, the Committee shall maintain, or cause to be
maintained, such other accounts, subaccounts, records or books as it deems
necessary to properly provide for the maintenance of Accounts under the Plan,
and to carry out the intent and purposes of the Plan. The Member’s Account and
any other subaccounts maintained in the name of a Member shall comprise the
Member’s Account under the Plan.

5.2 Crediting Restoration Contributions

Each time a Restoration Contribution is determined with respect to an Eligible
Participant as provided in Section 4.1, such Restoration Contribution shall be
credited to the Eligible Participant’s Account as of the date of such
determination, and such Restoration Contribution shall also be credited to any
applicable subaccount maintained to account for the nature and type of such
Restoration Contribution. Each Employer determining any such Restoration
Contribution may also deposit such Restoration Contribution in the Fund Account
on any date it may decide after such Restoration Contribution has been
determined under the Plan.

5.3 Credited Earnings

A Member shall be entitled to Credited Earnings on the balance to the credit of
his Account in accordance with the provisions of this Section 5.3. To the extent
a Member’s Restoration Contributions (including prior Credited Earnings credited
with respect thereto) are on deposit in the Fund Account, the provisions of
Section 5.3(a) below describe the crediting of Credited Earnings. To the extent
a Member’s Restoration Contributions (including prior Credited Earnings credited
with respect thereto) are not deposited in the Fund Account, the provisions of
Section 5.3(b) below describe the crediting of Credited Earnings.

(a)   Fund Account Credited Earnings. At any time when a Member has any
Restoration Contribution amount credited to his Account and also on deposit in
the Fund Account, such Member shall be entitled to have credited to his Account
any share of the Credited Earnings which are allocable to him based on the total
of all his Restoration Contributions credited to his Account that are on deposit
in the Fund Account (including any prior Credited Earnings so credited to him
that are also on deposit in the Fund Account with respect to his Account). The
Fund Account, including all of the Investment Funds comprising the Fund Account,
shall periodically be valued as of such valuation dates as the Committee shall
determine as are to be applicable to the various Investment Funds in the Fund
Account. Any such

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    valuation date shall be no less frequent than annually, and shall normally
be on a monthly basis unless the Committee determines another valuation date to
be applicable. As of each relevant valuation date with respect to the Fund
Account or any investment portion thereof, the Account of each Member who has an
Account balance credited to and also on deposit in the Fund Account shall have
his Account adjusted to reflect Credited Earnings based on his pro rata share of
the investment results of the Fund Account and the Investment Funds within the
Fund Account in which he is credited with an investment interest. Each Member
with an Account balance credited to and on deposit in the Fund Account shall
have his Fund Account funds invested in and among the Investment Funds
comprising the Fund Account. The investment, allocation and transfer of each
such Member’s funds among such Investment Funds is to be determined under an
investment method as determined by the Committee, which method may include the
self-direction of investments among Investment Funds by the Member. Each Member
is entitled to receive his Credited Earnings with respect to each Investment
Fund in which he has an investment interest based on his Account’s pro rata
interest therein as of the periodic valuation and adjustment dates provided for
herein.         (b)   Assumed Credited Earnings. At any time when a Member has
any Restoration Contribution amount credited to his Account and such amount is
not on deposit in the Fund Account, such Member shall be entitled to have
credited to his Account Credited Earnings based on the assumed investment
results of such Restoration Contributions (including prior Credited Earnings
credited with respect thereto) as if such amounts had been invested in
Investment Funds maintained under the Profit Sharing Plan during the period for
measuring Credited Earnings for crediting under this Plan. The crediting of such
Credited Earnings shall be at the times and valuation dates as are used for
crediting Investment Fund results under the Profit Sharing Plan, and shall be by
the method used therein. Additionally, the investment, allocation and transfer
of each such Member’s funds based on the assumed investments in the Investment
Funds under the Profit Sharing Plan shall be by such procedures and methods as
determined by the Committee. In this regard, the Committee may provide for
Member assumed self-direction of investments among the Investment Funds under
the Profit Sharing Plan based on the Member’s investment directions under such
Plan, or may allow for specific separate assumed self-directions under this
Plan.           (c)   Committee Determinations. The Committee shall make all
determinations with respect to the applicable Credited Earnings and with respect
to the crediting of such Credited Earnings to Accounts, and such determinations
shall be final and binding on all interested parties.

5.4 Adjustment of Accounts

Restoration Contributions shall be credited to the Accounts of Eligible
Participants as provided in Section 5.2. Credited Earnings (if any) on the
balances in the Accounts of each

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Member shall be credited to such Accounts as provided in Section 5.3. Charges to
a Member’s Account to reflect any distribution payments with respect to such
Member under the Plan shall be as of the date of any such payment. The Member
Accounts under the Plan shall also be adjusted and charged for any
administrative expenses or applicable taxes as are applicable to Accounts and
the Fund Account, to the extent such expenses and taxes are not separately paid
for by the Employers.

5.5 Account Balances

As of any relevant date, a Member’s balance credited to his Account shall be the
value of the balance standing to the credit of his Account upon the completion
of the valuation (i) as of the last preceding or coincident relevant valuation
as regards any portion of his Account which is not invested in the Fund Account,
and (ii) as of the close of the last preceding or coincident applicable
valuation date with respect to any portion of his Account which is invested in a
Fund Account fund, adjusted to reflect any credits or charges made to such
Account since such date or dates, including, without limitation, those
adjustments to reflect Restoration Contributions to and payments from such
Account. For purposes of making distributions or other payments with respect to
a Member under the Plan, the Member’s balance credited to his Account as of any
relevant date shall also include any Restoration Contributions to be credited
under the Plan on his behalf which have not been credited to his Account as of
such date. Where applicable, a Member’s Account balance shall include both the
amount credited to his Account with respect to Restoration Contributions which
were not deposited in the Fund Account, and the amount credited to his Account
with respect to Restoration Contributions which were deposited in the Fund
Account (which amounts also reflect the Credited Earnings adjustments which are
applicable with respect to such portions of his Account).

5.6 Account Statements

The Committee shall provide each Member with a statement of the status of his
Account under the Plan. The Committee shall provide such statement annually or
at such other times as the Committee may determine from time to time, and such
statement shall be in the format as prescribed by the Committee.

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Article 6. Administration

6.1 Administration

This Plan shall be administered by the Committee appointed pursuant to the terms
of the Profit Sharing Plan. The Committee shall administer this Plan in a manner
consistent with the administration of the Profit Sharing Plan, except that this
Plan shall be administered based on its terms and as an unfunded plan which is
not intended to meet the qualification requirements of Code Section 401. The
Committee shall have the same rights and authority granted to it under the
Profit Sharing Plan, which shall include the full power, discretion and
authority to interpret, construe and administer this Plan. The Committee shall
establish and maintain such accounts or records as the Committee may from time
to time consider necessary. The processing of claims for benefits, and the
appeal and review of such claims, shall be administered in accordance with
claims and review procedures like those applied under the Profit Sharing Plan,
and in accordance with the requirements of ERISA Section 503.

6.2 Finality of Determination

The determination of the Committee as to any disputed questions arising under
this Plan, including questions of construction and interpretation, shall be
final, binding, and conclusive upon all persons.

6.3 Expenses

The expenses of administering this Plan shall be borne by the Employers in the
proportions determined by the Committee.

6.4 Indemnification and Exculpation

The members of the Committee, its agents, and officers, directors, and employees
of the Company or any other Employer shall be indemnified and held harmless by
the Employer against and from any and all loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by them in connection with or
resulting from any claim, action, suit, or proceeding to which they may be a
party or in which they may be involved by reason of any action taken or failure
to act under this Plan and against and from any and all amounts paid by them in
settlement (with the Company’s written approval) or paid by them in satisfaction
of a judgment in any such action, suit, or proceeding. The foregoing provision
shall not be applicable to any person if the loss, cost, liability, or expense
is due to such person’s gross negligence or willful misconduct.

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Article 7. Funding of the Plan

7.1 Funding

All amounts paid under this Plan shall be paid from the general assets of the
participating Employers. Benefits shall be reflected on the accounting records
of the Employers, but neither this Plan nor the maintenance of such accounting
records shall be construed to create, or require the creation of, a trust,
custodial account, or escrow account with respect to any Member. No Member shall
have any right, title, or interest whatsoever in or to any investment reserves,
accounts, or funds that the Employers may purchase, establish, or accumulate to
aid in providing the unfunded benefit payments described in the Plan. Nothing
contained in this Plan, and no action taken pursuant to its provisions, shall
create, or be construed to create, a trust or fiduciary relationship of any kind
between an Employer or the Committee and a Member or any other person. Members
shall not acquire any interest under the Plan greater than that of an unsecured
general creditor of an Employer. The Trust Fund of the Profit Sharing Plan shall
not be liable for any benefits accrued under this Plan.

7.2 Fund Account

In accordance with and consistent with Section 7.1, the Employers may from time
to time establish a grantor trust arrangement to create a fund of assets to be
available to pay benefits when they become due under this Plan. Any such
arrangement shall be known as a “Fund Account” for purposes of this Plan, and
any funds deposited in such Fund Account shall be invested in such “Investment
Funds” as may be determined with respect to such Fund Account. Such Investment
Funds may include Investment Funds like those that are maintained under the
Profit Sharing Plan. A purpose for establishing any such Fund Account is to
provide for the depositing of any Restoration Contributions that may be credited
with respect to Eligible Participants under the Plan, and to allow Members to
receive Credited Earnings adjustments on their Account balances based on the
investment results of the investments of the Fund Account. The creation of the
Fund Account shall not create any greater rights with respect to Members than as
provided in such Section 7.1 and the Fund Account arrangement. Also, the
creation of such Fund Account shall in no way be applied or be construed so that
this Plan is anything other than an unfunded plan as described in Section 1.2.

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Article 8. Merger, Amendment, and Termination

8.1 Merger, Consolidation, or Acquisition

In the event of a merger, consolidation, or acquisition where an Employer is not
the surviving organization, unless the successor or acquiring organization shall
elect to continue and carry on the Plan, this Plan shall terminate with respect
to such Employer, and no additional benefits shall accrue for the Eligible
Participants of such organization. Unpaid benefits shall be paid upon the
termination of the Plan, unless the successor or acquiring organization elects
to accelerate payment.

8.2 Amendment and Termination

The Board of Directors, or any committee of the Board duly appointed and
authorized by the Board, may amend, modify, or terminate this Plan at any time
and in any manner. Such actions shall be binding upon all other Employers. In
addition, this Plan shall automatically terminate at the time of the termination
of the Profit Sharing Plan. In the event of a termination of the Plan pursuant
to this Section 8.2, no further benefits shall accrue under this Plan, and
amounts which are then payable shall continue to be an obligation of the
Employer and shall be paid as scheduled; provided, however, that the Company
reserves the right, in its sole discretion, to accelerate payments to the
affected Members in the event of a complete or partial termination of the Plan.

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Article 9. Adoption Procedure

9.1 Adoption Procedure

With the consent of the Company, any other organization which satisfies the
definition of Employer under the Profit Sharing Plan and this Plan and which is
eligible by the law to do so may adopt this Plan for the benefit of its
Employees who are designated as Eligible Participants under this Plan, on
express condition that the Company assumes no liability as a result of any such
adoption of this Plan by any other organization. Such other organization may
adopt this Plan by—

(a)   executing an adoption instrument adopting the Plan, and agreeing to be
bound as a participating Employer by all the terms, provisions, conditions, and
limitations of the Plan; and   (b)   compiling and submitting all information
required by the Company with reference to persons in its employment eligible for
membership in the Plan.

The adoption instrument shall specify the effective date of such adoption of the
Plan and shall become, as to such organization and persons in its employment, a
part of this Plan. Any such adoption instrument may be in any form as recognized
by the Company, including resolutions as may be adopted by the governing body of
such adopting Employer. The participating Employers under the Plan shall be
listed in Appendix A attached to the end of the Plan document.

9.2 Withdrawal of Participating Employer

Any participating Employer may withdraw from the Plan by giving 30 days’ notice
in writing of its intention to withdraw to the Company, unless a shorter notice
shall be agreed to by the Company.

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Article 10. General Provisions

10.1 Beneficiary Designations

A Member may designate a Beneficiary who upon his death is to receive the
benefits that otherwise would have been paid to him under the Plan. Such
designation must be made and delivered to the Committee during the Member’s
lifetime, and must be made in writing on a form prescribed for that purpose by
the Committee. Absent a specific Beneficiary designation with respect to this
Plan, the Member’s Beneficiary shall be his Beneficiary as designated and
determined with respect to and pursuant to the terms of the Profit Sharing Plan.

10.2 Nonalienation

No benefit payable at any time under the Plan shall be subject in any manner to
alienation, sale, transfer, assignment, pledge, attachment, garnishment, or
encumbrance of any kind, and shall not be subject to or reached by any legal or
equitable process (including execution, garnishment, attachment, pledge, or
bankruptcy) in satisfaction of any debt, liability, or obligation, prior to
receipt. Any attempt to alienate, sell, transfer, assign, pledge, or otherwise
encumber any such benefit, whether presently or thereafter payable, shall be
void. Notwithstanding the foregoing provisions of this Section 10.2, (i) no
benefit amount payable under the Plan shall be payable until and unless any and
all amounts representing debts or other obligations owed to the Company or other
Employer by the Member with respect to whom such amount would otherwise be
payable shall have been fully paid, and (ii) the Committee shall establish
procedures to determine whether domestic relations orders are “qualified
domestic relations orders” (as described in ERISA Section 206(d)(3)(B)) and to
administer distributions under such qualified domestic relations orders.

10.3 Effect on Other Benefit Plans

Amounts credited or paid under this Plan shall not be considered to be
compensation for the purposes of the Profit Sharing Plan or any other retirement
plans maintained by an Employer. The treatment of such amounts under other
employee benefit plans shall be determined pursuant to the provisions of such
plans.

10.4 Employer-Employee Relationship

The establishment of this Plan shall not be construed as conferring any legal or
other rights upon any Employee or any person for a continuation of employment,
nor shall it interfere with the rights of an Employer to discharge any Employee
or otherwise act with relation to the Employee. An Employer may take any action
(including discharge) with respect to any Employee or other person and may treat
such person without regard to the effect which such action or treatment might
have upon such person as a Member under this Plan.

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10.5 Incompetence

Every person receiving or claiming benefits under the Plan shall be conclusively
presumed to be mentally competent until the date on which the Committee receives
a written notice, in a form and manner acceptable to the Committee, that such
person is incompetent, and that a guardian, conservator, or other person legally
vested with the care of such person’s person or estate has been appointed;
provided, however, that if the Committee shall find that any person to whom a
benefit is payable under the Plan is unable to care for such person’s affairs
because of incompetency, any payment due (unless a prior claim therefor shall
have been made by a duly appointed legal representative) may be paid as provided
in the Profit Sharing Plan. Any such payment so made shall be a complete
discharge of liability therefor under the Plan.

10.6 Binding on Employer, Members and Their Successors

This Plan shall be binding upon and inure to the benefit of the Employers, their
successors and assigns and the Members, their heirs, executors, administrators
and legal representatives. The provisions of this Plan shall be applicable with
respect to each Employer separately, and amounts payable hereunder shall be paid
by the Employer of the particular Member. In the event any Member becomes
entitled to a benefit under this Plan based on service with more than one
Employer, the benefit obligations under this Plan shall be apportioned among
such Employers as determined by the Committee.

10.7 Tax Liability

An Employer may withhold from any payment of benefits hereunder any taxes
required to be withheld and such sum as the Employer may reasonably estimate to
be necessary to cover any taxes for which the Employer may be liable and which
may be assessed with regard to such payment.

10.8 Severability

In the event any provision of this Plan shall be held invalid or illegal for any
reason, any illegality or invalidity shall not affect the remaining parts of
this Plan, but this Plan shall be construed and enforced as if the illegal or
invalid provision had never been inserted, and the Company shall have the
privilege and opportunity to correct and remedy such questions of illegality or
invalidity by amendment as provided in this Plan.

10.9 Applicable Law

This Plan shall be governed and construed in accordance with the laws of the
State of Texas.

***********************

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In Witness Whereof, the Company has caused this instrument to be executed by its
duly authorized officers to become effective as of January 1, 2002, the
effective date of this Plan.

     

  Cullen/Frost Bankers, Inc.
 
   
 
   
Attest:
   

  By: /s/ Richard W. Evans, Jr.
 
   

             Its: Chairman
 
   
By: /s/ James A. Eckel
   
 
   
Its: Executive Vice President
  Date: 12/19/02

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Appendix A to the Cullen/Frost Restoration Profit Sharing Plan

Participating Employers Under the Plan

The following employers are participating Employers under the Cullen/Frost
Restoration Profit Sharing Plan as of January 1, 2002, unless a later
participation date is designated:

Cullen/Frost Bankers, Inc.

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Appendix B to the Cullen/Frost Restoration Profit Sharing Plan

Eligible Participants Under the Plan

The following individuals are designated as “Eligible Participants” in
accordance with and under the Cullen/Frost Restoration Profit Sharing Plan:

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