Thrift Incentive Stock Purchase Plan for Certain Employees of Cullen/Frost Bankers, Inc

Providing an opportunity for Eligible Employees to become shareholders of Cullen/Frost, thereby strengthening their direct interest in the progress and success of Cullen/Frost, and

Assisting the Employer in attracting and retaining capable personnel.

“Account” means the recordkeeping account which is maintained in the name of a Participant to account for his total proportionate interest in the Thrift Recordkeeping Account and which consists of the sum of the following subaccounts:

“Employer Contribution Account” means that portion of the Participant’s Account which represents the Employer Contributions made on his behalf by an Employer under Article 4, including any items attributable thereto and allocated under the Thrift Recordkeeping Account as provided in Plan section 7.3; and

“Participant Contribution Account” means that portion of such Participant’s Account which represents Participant Contributions made on behalf of such Participant under Article 4, including any items attributable thereto and allocated under the Thrift Recordkeeping Account as provided in Plan section 7.3.

“Beneficiary” means the person, persons or trust designated by a Participant under The 40l(k) Stock Purchase Plan to receive the Participant’s benefits under such plan in the event of his death.

“Claimant” means a Participant, or any beneficiary thereof, who makes a claim, subsequently denied by the Committee, for benefits under the Plan.

“Code” means the Internal Revenue Code of 1986 and the regulations issued thereunder, as amended from time to time.

“Committee” means the administrative committee appointed pursuant to Plan section 8.1.

“Common Stock” means the common stock of Cullen/Frost Bankers, Inc.

“Compensation” means a Participant’s base pay.

“Contributions” means the Contributions provided for pursuant to Article 4, which shall include the following types of Contributions:

“Participant Contributions”, as described in Plan section 4.2; and

“Employer Contributions”, as described in Plan section 4.3.

“Cullen/Frost” means Cullen/Frost Bankers, Inc., a Texas corporation, with its office and principal place of business in Bexar County, Texas.

“Credited Earnings” means the earnings amounts, if any, credited to the Thrift Recordkeeping Account, as provided in Plan section 6.3.

“Effective Date” means January 1, 2009.

“Eligible Employee” means an Employee of an Employer who has been designated by the Committee as eligible for participation under the Plan. Such Employee shall continue as an Eligible Employee so long as he remains employed in an Eligible Employee status as designated by the Committee. Plan section 3.1 provides additional information about Eligible Employees.

“Employee” means any person who is receiving remuneration for services rendered to an Employer. Any person who serves an Employer solely as a director, or who is receiving a pension (but not including in-service pension payments while actively employed), retirement allowance or severance pay, shall not be deemed to be an Employee.

“Employer” means Cullen/Frost or any other employing entity which is a Subsidiary of Cullen/Frost and which, with the approval of the Board of Directors of Cullen/Frost, adopts the Plan by appropriate action for the benefit of its Eligible Employees. References to “Employer” throughout the Plan shall be construed to relate to a particular Employer who employs one or more Eligible Employees, except where the context indicates otherwise.

“Fair Market Value” means the price per share of Cullen/Frost Common Stock based upon the closing bid price on the principal national securities exchange on which such Common Stock is then listed or admitted to trading or, if such Common Stock is not then listed or admitted to trading on any national securities exchange, such price shall be based upon the average of the closing bid and asked prices of such Common Stock in the over-the-counter market, as reported on the NASDAQ Quotation System, or such other system that may supersede it.

“Independent Agent” means any person or entity selected and employed by the Committee ‘as provided in Plan section 6.2.

“Participant” means an Eligible Employee described in Plan section 3.2. An “Active Participant” means a Participant described in Plan section 3.3.

“Plan” means the Thrift Incentive Stock Purchase Plan for Certain Employees of Cullen/Frost Bankers, Inc. as it is herein set forth, or as it may be amended and/or restated from time to time.

“Plan Administrator” means the person appointed pursuant to Plan section 8.1.

“Plan Year” means the 12-consecutive month period ending on December 31 of a year.

“Subsidiary” means any national banking association, state banking association or corporation, the majority of whose voting stock is owned directly or indirectly by Cullen/Frost.

“The 401(k) Stock Purchase Plan” means The 401(k) Stock Purchase Plan For Employees of Cullen/Frost Bankers, Inc. and Its Affiliates, as amended from time to time.

“Thrift Recordkeeping Account” means the recordkeeping account maintained to account for the total Employer Contributions and Participant Contributions for a Plan Year, including any Credited Earnings, dividends or other items allocated pursuant to Plan sections 7.2 and 7.3. The Thrift Recordkeeping Account may coincide with investment reserves, accounts, or funds that the Employer may purchase, establish, or accumulate to aid in providing the benefits described in this Plan; provided, however, no trust or fiduciary relationship shall be created as further discussed in Plan section 6.1.

Unless the Committee determines that the investment method in subsection (b) is to be used, the investment of Contributions shall be effected through purchases from Cullen/Frost out of its authorized but unissued shares of Common Stock, such purchases shall be effected as follows: The Committee shall select and employ an Independent Agent who shall, from time to time at the sole discretion of such Independent Agent, invest all Contributions in whole shares of Cullen/Frost Common Stock. Such shares shall be purchased, in the name of the Independent Agent, directly from Cullen/Frost. Shares of Cullen/Frost Common Stock shall be purchased periodically or from time to time on a reasonably current basis and at prices not in excess of Fair Market Value. Cullen/Frost shall exercise no control or influence over the time or the price at which shares of Cullen/Frost Common Stock are to be purchased or the amount of shares of Cullen/Frost Common Stock that are to be purchased. The Committee shall hold Contributions pending the purchase of such shares.

In the event that the Committee determines that the investment of Contributions shall be effected through purchases in the open market, such purchases shall be effected as follows: The Committee shall select and employ an Independent Agent who shall, from time to time at the sole discretion of such Independent Agent, invest all Contributions in whole shares of Cullen/Frost Common Stock. Such shares shall be purchased, in the name of the Independent Agent, in private transactions or on the principal national securities exchange on which such Common Stock is listed or admitted to trading or, if such Common Stock is not then listed or admitted to trading on any national securities exchange, then in the over-the-counter market. Shares of Cullen/Frost Common Stock shall be purchased periodically or from time to time on a reasonably current basis and at prices not in excess of the then current market price. Cullen/Frost shall exercise no control or influence over the time or the price at which shares of Cullen/Frost Common Stock are to be purchased, the amount of shares of Cullen/Frost Common Stock that are to be purchased, or the selection of the broker or dealer, if any, through or from whom such shares are to be purchased. The Committee shall hold Contributions pending the purchase of such shares.

The total number of shares of Cullen/Frost Common Stock purchased,

The total number of shares of Cullen/Frost Common Stock received under a stock dividend, stock split or any similar distribution of shares which are registered in the name of the Independent Agent or its nominee under the Plan,

Any cash Contributions which have not been invested in shares of Cullen/Frost Common Stock,

All cash dividends received on shares registered in the name of the Independent Agent or its nominee, and

Any Credited Interest pursuant to Plan section 6.3.

Annual Distributions. Subsequent to the allocation of shares and cash as provided in Plan section 7.3, the Committee shall cause the whole shares of Cullen/Frost Common Stock allocated to the Participant’s Employer Contribution Account, and the whole shares allocated to his Participant Contribution Account, to be issued in the name of such Participant in one or more stock certificates; and the Committee shall then distribute such stock certificate(s), and any remaining cash in such Accounts, to such Participant as soon as administratively practicable. All such distributions under this Plan section 7.4 shall be made by no later than December 31 of such Plan Year.

Death Distributions. A distribution shall be made to the Participant’s Beneficiary in the same manner, as described in subsection (c).

Other Terminations of Employment. Whenever a Participant terminates employment during a Plan Year and prior to December 15, the provisions of Plan section 7.3 shall be applied as if such termination date was the allocation date provided for in Plan section 7.3; and such Participant shall then receive a distribution in accordance with the provisions of subsection (a). All distributions under this subsection (c) shall be made as soon as administratively practicable following such termination of employment, but not later than December 31 of the Plan Year in which the termination of employment occurs.

To establish rules, policies, and procedures for administration of the Plan;

To construe and interpret the Plan, to decide all questions of eligibility, and to determine the amount, manner, and time of payment of any benefits hereunder;

To make a determination as to the right of any person to a benefit and the amount thereof;

To obtain from the Company such information as shall be necessary for the proper administration of the Plan;

To prepare and distribute information explaining the Plan;

To keep all records necessary for the operation and administration of the Plan;

To prepare and file any reports, descriptions, or forms required by the Code; and

To designate or employ agents and counsel (who may also be persons employed by the Company) and direct them to exercise the powers of the Committee.

The Company (including any successor employer, as applicable) shall indemnify and hold harmless each of the following persons (“Indemnified Persons”) under the terms and conditions of subsection (b).

The Committee; and

Each Employee, former Employee, current and former members of the Committee, or current or former members of the Board of Directors who have, or had, responsibility (whether by delegation from another person, an allocation of responsibilities under the terms of this Plan document, or otherwise) for a fiduciary duty, a non fiduciary settlor function (such as deciding whether to approve a plan amendment), or a non fiduciary administrative task relating to the Plan.

The Company shall indemnify and hold harmless each Indemnified Person against any and all claims, losses, damages, and expenses, including reasonable attorneys’ fees and court costs, incurred by that person on account of his good faith actions or failures to act with respect to his responsibilities relating to the Plan. The Company’s indemnification shall include payment of any amounts due under a settlement of any lawsuit or investigation, but only if the Company agrees to the settlement.

An Indemnified Person shall be indemnified under this Plan section 8.4 only if he notifies an Appropriate Person (defined below) at the Company of any claim asserted against or any investigation of the Indemnified Person that relates to the Indemnified Person’s responsibilities with respect to the Plan.

An “Appropriate Person” is one or more of the following individuals at the Company:

The Chief Executive Officer,

The Chief Financial Officer,

Its General Counsel,

Treasurer, or

Group Executive Vice President, HR.

The notice may be provided orally or in writing. The notice must be provided to the Appropriate Person promptly after the Indemnified Person becomes aware of the claim or investigation. No indemnification shall be provided under this Plan section 8.4 to the extent that the Company is materially prejudiced by the unreasonable delay of the Indemnified Person in notifying an Appropriate Person of the claim or investigation.

An Indemnified Person shall be indemnified under this Plan section 8.4 with respect to attorneys’ fees, court costs, or other litigation expenses or any settlement of such litigation only if the Indemnified Person agrees to permit the Company to select counsel and to conduct the defense of the lawsuit and agrees not to take any action in the lawsuit that the Company believes would be prejudicial to the Company’s interests.

No Indemnified Person, including an Indemnified Person who is a former Employee, shall be indemnified under this Plan section 8.4 unless he makes himself reasonably available to assist the Company with respect to the matters in issue and agrees to provide whatever documents, testimony, information, materials, or other forms of assistance that the Company shall reasonably request.

No Indemnified Person shall be indemnified under this Plan section 8.4 with respect to any action or failure to act that is judicially determined to constitute or be attributable to the gross negligence or willful misconduct of the Indemnified Person.

Payments of any indemnity under this Plan section 8.4 shall only be made from assets of the Company. The provisions of this Plan section 8.4 shall not preclude or limit such further indemnities or reimbursement under this Plan as allowable under applicable law, as may be available under insurance purchased by the Company, or as may be provided by the Company under any by law, agreement or otherwise, provided that no expense shall be indemnified under this Plan section 8.4 that is otherwise indemnified by the Company, by an insurance contract purchased by the Company, or by this Plan.

The right of a Participant or any other person entitled to claim a benefit under the Plan (collectively “Claimants”) to a benefit shall be determined by the Committee, provided, however, that the Committee may delegate its responsibility to any person.

The Claimant (or an authorized representative of a Claimant) may file a claim for benefits by written notice to the Committee. The Committee shall establish procedures for determining whether a person is authorized to represent a Claimant.

Any claim for benefits under the Plan, pursuant to this Plan section 9.1, shall be filed with the Committee no later than three months after the date of the Participant’s termination of employment. The Committee in its sole discretion shall determine whether this limitation period has been exceeded.

Notwithstanding anything to the contrary in this Plan, the following shall not be a claim for purposes of this Plan section 9.1:

A request for determination of eligibility, participation, or benefit calculation under the Plan without an accompanying claim for benefits under the Plan. The determination of eligibility, participation, or benefit calculation under the Plan may be necessary to resolve a claim, in which case such determination shall be made in accordance with the claims procedures set forth in this Plan section 9.1.

Any casual inquiry relating to the Plan, including an inquiry about benefits or the circumstances under which benefits might be paid under the Plan.

A claim that is defective or otherwise fails to follow the procedures of the Plan (e.g., a claim that is addressed to a party other than the Committee or an oral claim).

An application or request for benefits under the Plan.

If a claim for benefits is wholly or partially denied, the Committee shall, within a reasonable period of time, but no later than 90 days after receipt of the claim, notify the Claimant of the denial of benefits. If special circumstances justify extending the period up to an additional 90 days, the Claimant shall be given written notice of this extension within the initial 90-day period, and such notice shall set forth the special circumstances and the date a decision is expected. A notice of denial:

Shall be written in a manner calculated to be understood by the Claimant; and

Shall contain:

The specific reasons for denial of the claim;

Specific reference to the Plan provisions on which the denial is based;

A description of any additional material or information necessary for the Claimant to perfect the claim, along with an explanation as to why such material or information is necessary; and

An explanation of the Plan’s claim review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under ERISA section 502(a) following an adverse determination on review.

Within 60 days of the receipt by the Claimant of the written denial of his or her claim or, if the claim has not been granted, within a reasonable period of time (which shall not be less than the 90 or 180 days described in subsection (b)), the Claimant (or an authorized representative of a Claimant) may file a written request with the Committee that it conduct a full review of the denial of the claim. In connection with the Claimant’s appeal, upon request, the Claimant may review and obtain copies of all documents, records and other information relevant to the Claimant’s claim for benefits (but not including any document, record or information that is subject to any attorney-client or work-product privilege) and may submit issues and comments in writing. The Claimant may submit written comments, documents, records, and other information relating to the claim for benefits. All comments, documents, records, and other information submitted by the Claimant shall be taken into account in the appeal without regard to whether such information was submitted or considered in the initial benefit determination.

The Committee shall deliver to the Claimant a written decision on the claim promptly, but no later than 60 days after the receipt of the Claimant’s request for such review, unless special circumstances exist that justify extending this period up to an additional 60 days. If the period is extended, the Claimant shall be given written notice of this extension during the initial 60-day period and such notice shall set forth the special circumstances and the date a decision is expected. The decision on review of the denial of the claim:

Shall be written in a manner calculated to be understood by the Claimant;

Shall include specific reasons for the decision;

Shall contain specific references to the Plan provisions on which the decision is based;

Shall contain a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and other information relevant to the Claimant’s claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by reference to U.S. Department of Labor Regulations section 2560; and

Shall contain a statement of the Claimant’s right to bring a civil action under ERISA section 502(a) following an adverse determination on review.

The Plan provides that no lawsuit may be initiated by any person before fully pursuing the procedures set out in this Plan section 9.1, including the appeal permitted pursuant to subsection (c). In addition, no legal action may be commenced later than 365 days subsequent to the date of the written response of the Committee to a Claimant’s request for review pursuant to subsection (d).

No amendment or modification may be made which would adversely affect the rights and privileges of Participants in shares held in custody by the Committee as provided in this Plan;

No amendment or modification may be made which would increase the duties or liabilities of the Committee, or the Independent Agent, without the written consent of the party so affected.

/s/ Richard W. Evans, Jr.    

Chairman    

/s/ Emily Skillman    

Group Executive Vice President        (Corporate Seal)