Exhibit 10.8
Change-In-Control
Agreements
with Five Executive
Officers
Form of Change-in-Control Agreements
made with the following five Executive Officers of Cullen/Frost
Bankers, Inc.
All of the above agreements are
substantially identical in all material respects, except as to the
dates of the agreements and the parties thereto.
Cullen/Frost Bankers, Inc.
Executive Severance Agreement
THIS AGREEMENT is made and entered into as of the [DAY] day
of [MONTH], 2008, by and between Cullen/Frost Bankers, Inc.
(hereinafter referred to as the “Company”) and [NAME]
(hereinafter referred to as the “Executive”).
WHEREAS , the Board of Directors of the Company has approved
the Company entering into severance agreements with certain key
executives of the Company;
WHEREAS , the Executive is a key executive of the
Company;
WHEREAS , should the possibility of a Change in Control of
the Company arise, the Board believes it is imperative that the
Company and the Board should be able to rely upon the Executive to
continue in his/her position, and that the Company should be able
to receive and rely upon the Executive’s advice, if
requested, as to the best interests of the Company and its
shareholders without concern that the Executive might be distracted
by the personal uncertainties and risks created by the possibility
of a Change in Control;
WHEREAS , should the possibility of a Change in Control
arise, in addition to his/her regular duties, the Executive may be
called upon to assist in the assessment of such possible Change in
Control, advise management and the Board as to whether such Change
in Control would be in the best interests of the Company and its
shareholders, and to take such other actions as the Board might
determine to be appropriate; and
WHEREAS, the Company and the Executive wish to amend and
restate this Agreement as of the date hereof, to cause this
Agreement to be exempt from, or comply with, as applicable, the
terms of Section 409A of the Internal Revenue Code of 1986, as
amended.
WHEREAS , the Executive and the Company desire that the
terms of this Agreement shall completely replace and supersede the
provisions set forth in the Executive Severance Agreement between
the Company and the Executive, as in effect immediately prior to
the date hereof.
NOW THEREFORE , to assure the Company that it will have the
continued dedication of the Executive and the availability of
his/her advice and counsel notwithstanding the possibility, threat,
or occurrence of a Change in Control of the Company, and to induce
the Executive to remain in the employ of the Company, and for other
good and valuable consideration, the Company and the Executive
agree as follows:
Article 1. Establishment, Term, and Purpose
This Agreement will commence on the Effective Date and shall
continue in effect for one (1) full year. However, at the end
of such one (1) year period and, if extended, at
the end of each
additional year thereafter, the term of this Agreement shall be
extended automatically for one (1) additional year, unless the
Committee delivers written notice thirty (30) days prior to
the end of such term, or extended term, to each Executive, that the
Agreement will not be extended. In such case, the Agreement will
terminate at the end of the term, or extended term, then in
progress.
However, in the event a Change in Control occurs during the
original or any extended term, this Agreement will remain in effect
for the longer of: (i) twenty-four (24) months beyond the
month in which such Change in Control occurred; or (ii) until
all obligations of the Company hereunder have been fulfilled, and
until all benefits required hereunder have been paid to the
Executive.
Article 2. Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the
initial letter of the word is capitalized.
2.1 “Base Salary” means the salary of record
paid to an Executive as annual salary, excluding amounts received
under incentive or other bonus plans, whether or not deferred.
2.2 “Beneficial Owner” shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
2.3 “Beneficiary” means the persons or entities
designated or deemed designated by the Executive pursuant to
Section 11.2 herein.
2.4 “Board” means the Board of Directors of the
Company.
2.5 “Cause” means:
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(a)
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The Executive’s willful and continued
failure to substantially perform his/her duties with the Company
(other than any such failure resulting from Disability or occurring
after issuance by the Executive of a Notice of Termination for Good
Reason), after a written demand for substantial performance is
delivered to the Executive that specifically identifies the manner
in which the Company believes that the Executive has willfully
failed to substantially perform his/her duties, and after the
Executive has failed to resume substantial performance of his/her
duties on a continuous basis within thirty (30) calendar days
of receiving such demand;
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(b)
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The Executive’s willfully engaging in
conduct (other than conduct covered under (a) above) which is
demonstrably and materially injurious to the Company, monetarily or
otherwise; or
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(c)
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The Executive’s having been convicted of
a felony.
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For purposes of this subparagraph, no act, or failure to act, on
the Executive’s part shall be deemed “willful”
unless done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that the action or omission was
in the best interests of the Company. The termination of employment
of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
two-thirds of the entire membership of the Board (excluding the
Executive, if applicable) at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct
described above, and specifying the particulars thereof in
detail.
2.6 “Change in Control” means any of the
following events:
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(a)
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any “person” (as such term is
defined in Section 3(a)(9) of the Securities Exchange Act of
1934 (the “Exchange Act”) and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or
becomes a “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined
voting power of the Company’s then outstanding securities
eligible to vote for the election of the Board (the “Company
Voting Securities”); provided, however, that the event
described in this paragraph (a) shall not be deemed to be a
Change in Control by virtue of any of the following acquisitions:
(A) by the Company or any Subsidiary, (B) by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary, (C) by any underwriter temporarily
holding securities pursuant to an offering of such securities or
(D) a transaction (other than one described in (b) below)
in which Company Voting Securities are acquired from the Company,
if a majority of the incumbent Directors approve a resolution
providing expressly that the acquisition pursuant to this clause
(D) does not constitute a Change in Control under this
paragraph (a);
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(b)
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the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the
Company or any of its Subsidiaries that requires the approval of
the Company’s stockholders, whether for such transaction or
the issuance of securities in the transaction (a “Business
Combination”), unless immediately following such Business
Combination: (A) more than 60% of the total voting power of
(x) the corporation resulting from such Business Combination
(the “Surviving Corporation”), or (y) if
applicable, the ultimate parent corporation that directly or
indirectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving Corporation
(the
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“Parent Corporation”), is represented by Company Voting
Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into which
such Company Voting Securities were converted pursuant to such
Business Combination), and such voting power among (and only among)
the holders thereof is in substantially the same proportion as the
voting power of such Company Voting Securities among the holders
thereof immediately prior to the Business Combination, (B) no
person (other than any employee benefit plan (or related trust)
sponsored or maintained by the Surviving Corporation or the Parent
Corporation) is or becomes the beneficial owner, directly or
indirectly, of 20% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) and (C) at least 50% of the members of
the board of directors of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) following the
consummation of the Business Combination were incumbent Directors
at the time of the Board’s approval of the execution of the
initial agreement providing for such Business Combination; or
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(c)
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during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in paragraph (a) or
(b) of this section) whose election by the Board of Directors
or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority thereof;
or
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(d)
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the stockholders of the Company approve a plan
of complete liquidation or dissolution of the Company or a sale of
all or substantially all of the Company’s assets.
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Notwithstanding the foregoing, a Change in Control of the Company
shall not be deemed to occur solely because any person acquires
beneficial ownership of more than 20% of the Company Voting
Securities as a result of the acquisition of Company Voting
Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such
acquisition by the Company such person becomes the beneficial owner
of additional Company Voting Securities that increases the
percentage of outstanding Company Voting Securities beneficially
owned by such person, a Change in Control of the Company shall then
occur. Further, in no event shall a Change in Control be deemed to
have occurred, with respect to the Executive, if the Executive is
part of a purchasing group which consummates the Change in Control
transaction. The
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Executive shall be deemed “part of a purchasing group”
for purposes of the preceding sentence if the Executive is an
equity participant in the purchasing company or group (except for:
(i) passive ownership of less than three percent (3%) of
the stock of the purchasing company; or (ii) ownership of
equity participation in the purchasing company or group which is
otherwise not significant, as determined prior to the Change in
Control by a majority of the nonemployee continuing Directors).
2.7 “Code” means the United States Internal
Revenue Code of 1986, as amended, and any successors thereto.
2.8 “Committee” means the Compensation and
Benefits Committee of the Board or any other committee appointed by
the Board to perform the functions of the Compensation and Benefits
Committee.
2.9 “Company” means Cullen/Frost Bankers, Inc.,
a Texas corporation, or any successor thereto as provided in
Article 10 herein.
2.10 “Disability” means complete and permanent
inability by reason of illness or accident to perform the duties of
the occupation at which the Executive was employed when such
disability commenced.
2.11 “Effective Date” means the date of this
Agreement set forth above.
2.12 “Effective Date of Termination” means the
date on which a Qualifying Termination occurs which triggers the
payment of Severance Benefits hereunder.
2.13 “Exchange Act” means the United States
Securities Exchange Act of 1934, as amended.
2.14 “Good Reason” shall mean, without the
Executive’s express written consent, the occurrence of any
one or more of the following:
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(a)
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The assignment of the Executive to duties
materially inconsistent with the Executive’s authorities,
duties, responsibilities, and status (including offices and
reporting requirements) as an employee of the Company, or a
reduction or alteration in the nature or status of the
Executive’s authorities, duties, or responsibilities than
those in effect immediately preceding the Change in Control;
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(b)
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The Company’s requiring the Executive to
be based at a location which is at least fifty (50) miles
further from the current primary residence than is such residence
from the Company’s current headquarters, except for required
travel on the Company’s business to an extent substantially
consistent with the Executive’s business obligations as of
the Effective Date;
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(c)
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A material change in the Executive’s
Base Salary or bonus opportunity as in effect on the Effective Date
or as the same shall be increased from time to time;
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(d)
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A material reduction in the Executive’s
level of participation in any of the Company’s short- and/or
long-term incentive compensation plans, or employee benefit or
retirement plans, policies, practices, or arrangements in which the
Executive participates immediately preceding the Change in Control;
provided, however, that reductions in the levels of participation
in any such plans shall not be deemed to be “Good
Reason” if the Executive’s reduced level of
participation in each such program remains substantially consistent
with the average level of participation of other executives who
have positions commensurate with the Executive’s
position.
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For purposes of this Agreement, long-term incentives shall mean the
Cullen Frost Bankers, Inc. 1992 Stock Plan and any other similar
plans instituted by the Company;
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(e)
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The failure of the Company to obtain a
satisfactory agreement from any successor to the Company to assume
and agree to perform this Agreement, as contemplated in Article 10
herein; or
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(f)
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Any termination of Executive’s
employment by the Compan
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