CNBT BANCSHARES INC
S-8, 1999-07-20
NATIONAL COMMERCIAL BANKS
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<PAGE>

    As filed with the Securities and Exchange Commission  on July 20, 1999


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                     Under
                           THE SECURITIES ACT OF 1933

                             CNBT BANCSHARES, INC.
             (Exact name of registrant as specified in its charter)

              Texas                                           76-0575815
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification No.)

                            5320 Bellaire Boulevard
                             Bellaire, Texas 77401
          (Address of principal executive offices, including zip code)

                             1992 STOCK OPTION PLAN
                             1994 STOCK OPTION PLAN
                             1995 STOCK OPTION PLAN
                             1997 STOCK OPTION PLAN
                             1998 STOCK OPTION PLAN
                            (Full title of the plan)

                                Randall W. Dobbs
                            Executive Vice President
                            5320 Bellaire Boulevard
                             Bellaire, Texas 77401
                    (Name and address of agent for service)

                                 (713) 661-4444
         (Telephone number, including area code, of agent for service)

                                    Copy to:

                                 John T. Unger
                              Snell & Smith, P.C.
                           1000 Louisiana, Suite 1200
                              Houston, Texas 77002

                        CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>

                      Title of                                           Proposed maximum      Proposed maximum       Amount of
                  securities to be                      Amount to be      offering price          aggregate         registration
                     registered                          registered        per share(1)       offering price (1)       fee(1)
====================================================================================================================================
<S>                                                    <C>              <C>                   <C>                  <C>
 Common Stock, $1.00                                    10,000 shares             $10.50          $  105,000.00       $  291.90
 par value                                              92,500 shares               9.00             832,500.00        2,314.35
                                                        12,100 shares               6.20              75,020.00          208.56
                                                         9,680 shares               5.79              56,047.20          155.81
                                                        60,324 shares               2.75             165,891.00          461.18
                                                       -------                                     ------------    ------------
                                                       184,604 shares                              1,234,458.20       $3,431.80

</TABLE>
(1) Calculated pursuant to Rule 457(h) under the Securities Act of 1933.
<PAGE>

PROSPECTUS



                                 157,450 Shares

                             CNBT BANCSHARES, INC.
                                  Common Stock
                                $1.00 par value



   The stockholders of  CNBT Bancshares, Inc. listed below are offering and
selling up to 157,450 shares of common stock under this prospectus. The selling
stockholders acquired or may acquire their shares through the exercise of
options granted to such individuals pursuant to our stock option plans. Some or
all of the selling stockholders expect to sell their shares.

   The selling stockholders may offer their shares through public or private
transactions, on the Nasdaq Stock Market, in the over-the-counter market, or in
private transactions, at prevailing market prices or at privately negotiated
prices.

   Our common stock is quoted on The Nasdaq Stock Market under the symbol
"CNBT." On July __, 1999, the last reported sale price of the common stock on
the Nasdaq Stock Market was $__.__.

   Investing in the common stock involves risks. See "Risk Factors" starting on
page 9.

   The shares offered are not savings or deposit accounts and are not insured by
the Federal Deposit Insurance Corporation, the bank insurance fund, or any other
governmental agency.

   The shares offered have not been approved by the SEC or any state securities
commission, nor have these organizations determined that this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.


                                ---------------


                 The date of this Prospectus is July __, 1999.
<PAGE>

                               TABLE OF CONTENTS


                                                                Page
                                                                ----

Where You Can Find More Information...........................    3
About CNBT Bancshares, Inc....................................    4
Risk Factors..................................................    5
Use of Proceeds...............................................    8
Description of Capital Stock..................................    8
Selling Stockholders..........................................   10
Plan of Distribution..........................................   11
Legal Matters.................................................   12
Experts.......................................................   12

                                       2
<PAGE>

                      WHERE YOU CAN FIND MORE INFORMATION

   We file annual, quarterly and special reports, proxy statements, and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov.

   The reports, proxy statements, and other information concerning CNBT
described above also may be inspected at the offices of The Nasdaq Stock Market,
1735 K Street, N.W., Washington, D.C. 20006-1506.

   The SEC allows us to  "incorporate  by reference"  the  information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus,  and later information that we file
with the SEC will automatically  update and supersede  this  information. We
incorporate by reference  the documents  listed below and any future  filings
made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until the selling stockholders sell all the shares:

 .  Annual Report on Form 10-K for the year ended December 31, 1998;

 .  Quarterly  Report on Form 10-Q for the quarter ended March 31, 1999; and

 .  Proxy Statement dated April 12, 1999.

   You may request a copy of these  filings,  at no cost, by writing or
telephoning us at the following address:

   Randall W. Dobbs, Executive Vice President
   CNBT Bancshares, Inc.
   5320 Bellaire Boulevard
   Bellaire, Texas 77401
   713-661-4444

   This prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-____). You should rely only on the information
incorporated by reference or provided in this prospectus or any supplement. We
have not authorized anyone else to provide you with different information.  The
selling stockholders will not make an offer of these shares in any state where
the offer is not  permitted.  You should not assume that the  information in
this prospectus or any supplement is accurate as of any date other than the date
on the front of those documents.

                                       3
<PAGE>

                          ABOUT CNBT BANCSHARES, INC.

   CNBT is a bank holding company for Citizens National Bank of Texas, a
national banking association that provides a full range of traditional retail
and commercial banking services primarily to individual consumers and small
businesses through six offices in the in the Houston metropolitan area.

   The bank opened in October 1983. CNBT  was incorporated in April 1998, and
the bank was reorganized into a holding company structure effective July 2,
1998. Our main office is located at 5320 Bellaire Boulevard, Bellaire, Texas
77401 and our telephone number is (713) 661-4444. At March 31, 1999, we had
$394.5 million in total assets, $340.5 million in total deposits and total
stockholders' equity of $32.5 million.

   We adhere to a community banking philosophy that emphasizes accessible,
service-oriented, relationship banking.  We believe that this commitment,
together with our conservative lending and prudent investment policies, are
important factors in our success and growth.  Our high quality personal service
and responsiveness to customer needs has attracted numerous customers from
larger regional banks.  We believe that the continued acquisitions of local
banks by out of state organizations present additional opportunities to attract
customers who prefer to work with a local community bank or who have experienced
a decline in personal service from the out of state banks.

   As a full service commercial bank, we offer an array of lending and deposit
services to our retail and commercial customers.  Our primary lending focus is
on small business, commercial and residential real estate, and consumer loans.
We generally seek a mix of 50% consumer loans, 25% small business loans, and 25%
real estate loans.  Loan demand and maturities may cause the actual percentage
of loans in any category to vary from the proposed mix. As a service to our
customers, we also offer home computer banking, provide on-site access to
conventional mortgage loans through its subsidiary CNB Mortgage Company, and
provide in-house check printing.



                                       4
<PAGE>

                                  RISK FACTORS

   In addition to the other information set forth in this Prospectus, the
following factors should be considered by prospective investors when evaluating
a investment in the common stock.

INTEREST RATE RISK

   Our earnings depend to a substantial extent on "rate differentials", i.e.,
the differences between the income we earn on loans, securities, and other
earning assets, and the interest expense we pay to obtain deposits and other
liabilities. These rates are highly sensitive to many factors that are beyond
our control, including general economic conditions and the policies of various
governmental and regulatory authorities. Increases in the discount rate by the
Federal Reserve Board usually lead to rising interest rates, which affect our
interest income, interest expense, and securities portfolio. Also, governmental
policies, such as the creation of a tax deduction for individual retirement
accounts, can increase savings and affect our cost of funds. From time to time,
maturities of assets and liabilities are not balanced and a rapid increase in
interest rates could have an adverse effect on our net interest margin and
results of operations. To the extent that we maintain a significant percentage
of our assets in investment securities, a rapid increase or decrease in interest
rates could have a greater adverse effect on our net interest margin and results
of operation.  The nature, timing, and effect of any future changes in federal
monetary and fiscal policies on our results of operations are not predictable.

EXPOSURE TO LOCAL ECONOMIC CONDITIONS

   Our success is dependent to a significant extent upon general economic
conditions in the Houston metropolitan area. The banking industry in Texas and
Houston is affected by general economic conditions such as inflation, recession,
unemployment, and other factors beyond the our control. During the mid-1980's,
severely depressed oil and gas and real estate prices materially and adversely
affected the Texas and Houston economies, causing recession and unemployment in
the region and resulting in excess vacancies in the Houston real estate market
and elsewhere in the State. Since 1987, the local economy has improved in part
due to its expansion into non-energy related industries. As the Houston economy
has diversified away from the energy industry, however, it has become more
susceptible to adverse effects resulting from recession in the national economy.
Economic recession over a prolonged period of time in the Houston area could
cause significant increases in nonperforming assets, thereby causing operating
losses, impairing liquidity, and eroding capital. There can be no assurance that
future adverse changes in the local economy would not have a material adverse
effect on our financial condition, results of operations or cash flows.

                                       5
<PAGE>

COMPETITION

   The banking business is highly competitive and our profitability depends
principally upon our ability to compete in the Houston metropolitan area. In
addition to competing with other commercial and savings banks and savings and
loan associations, we compete with credit unions, finance companies, mutual
funds, insurance companies, brokerage and investment banking firms, asset-based
non-bank lenders, and certain other non-financial entities, including retail
stores that may maintain their own credit programs, and governmental
organizations that may offer subsidized financing at lower rates than those we
offer. Many of our competitors have significantly greater financial and other
resources and higher lending limits than we have. Although we have been able to
compete effectively in the past, no assurance can be given that we will continue
to be able to compete effectively in the future. Various legislative acts in
recent years have led to increased competition among financial institutions.
There can be no assurance that Congress or the Texas legislature will not enact
legislation that may further increase competitive pressures on us. Competition
from both financial and non-financial institutions is expected to continue.

SUPERVISION AND REGULATION

   We operate in a highly regulated environment and is subject to extensive
supervision and examination by federal and state regulatory agencies.  As a bank
holding company we are subject to regulation and supervision by the Federal
Reserve Board. The bank, as a national banking association, is subject to
regulation and supervision by the Office of the Comptroller of the Currency
(OCC) and, as a result of the insurance of its deposits, the Federal Deposit
Insurance Corporation (FDIC). These regulations are intended primarily for the
protection of depositors and customers, rather than for the benefit of
investors. We are subject to changes in federal and state law, as well as
changes in regulation and governmental policies, income tax laws and accounting
principles. The effects of any potential changes cannot be predicted but could
adversely affect our business and operations in the future.

DIVIDEND HISTORY AND RESTRICTIONS ON ABILITY TO PAY DIVIDENDS

   While we have paid dividends each year since 1986 and in the future plan to
pay dividends based on our earnings and capital requirements, there is no
assurance that we will pay dividends in the future. Our ability to pay dividends
is subject to restrictions imposed by federal banking laws, regulations, and
authorities. Without approval of the OCC, dividends from the bank to the holding
company in any calendar year may not exceed the bank's net income for that year,
plus its retained net income for the preceding two years, less any required
transfers to capital surplus or to a fund for the retirement of any preferred
stock. In addition, a dividend may not be paid in excess of a bank's undivided
profits. Under these restrictions, as of January 1, 1999, approximately $2.8
million was available for payment of dividends (without prior regulatory
approval).

                                       6
<PAGE>

   The federal banking statutes also prohibit a national bank from making any
capital distribution (including a dividend payment) if, after making the
distribution, the institution would be "undercapitalized," as defined by
statute. In addition, the relevant federal regulatory agencies also have
authority to prohibit a national bank from engaging in an unsafe or unsound
practice as determined by the agency in conducting its business. The payment of
dividends could be deemed to constitute such an unsafe or unsound practice,
depending upon our financial condition. Regulatory authorities could also impose
administratively stricter limitations on our ability to pay dividends if such
limits were deemed appropriate by such regulatory authorities to preserve the
bank's capital.

DEPENDENCE ON KEY PERSONNEL

   We are  dependent on certain key personnel, including Frank G. Cook, B. Ralph
Williams, Randall W. Dobbs, Joseph E. Ives, Mary A. Walker, Sheila J. Duffy,
Robert J. Kramer, and John M. James, each of whom has relationships with our
customers that we consider important to our business. The loss of such
individuals or other members of senior management could have an adverse effect
on our and profitability. We currently do not have employment contracts with any
of these officers.

CERTAIN CHARTER AND BYLAW PROVISIONS

   Our articles of incorporation and bylaws contain certain provisions that
could delay, discourage or prevent an attempted acquisition or change of control
of CNBT. These provisions include a provision establishing certain advance
notice procedures for nomination of candidates for election as directors and for
stockholder proposals to be considered at an annual meeting of stockholders and
for stockholder proposals to be considered at an annual meeting.

MANAGEMENT'S OWNERSHIP INTEREST AND POSSIBLE EFFECTS

   Our directors and executive officers will beneficially own approximately
29.5% of the outstanding shares of common stock.  Accordingly, such individuals
will be able to influence, to a significant extent, the outcome of matters
required to be submitted to stockholders for approval, including decisions
relating to the election of directors, the determination of day-to-day
management policies, and other significant transactions, which may include
taking actions that may be inconsistent with the interests of non-affiliated
stockholders.

REGULATION OF CONTROL

   Any person (individual or entity),  alone or acting in concert, seeking to
acquire 25% or more of any class of voting securities of, or otherwise to
acquire "control" of, the CNBT is required to seek the prior approval of the
Federal Reserve Board under the Change in Bank Control Act and regulations. The
Federal Reserve Board will presume, unless rebutted, that an

                                       7
<PAGE>

acquisition or other disposition of voting securities of CNBT through which any
person alone or acting in concert with other persons, proposes to acquire
ownership of, or the power to vote, 10% or more of a class of voting securities
of CNBT constitutes the acquisition of "control" of CNBT. In such event, such
acquiring person or persons would be required to obtain the approval of the
Federal Reserve Board.


                                USE OF PROCEEDS

   All net proceeds from the sale of shares by the selling stockholders will go
to the selling stockholders who offer and sell their shares. Accordingly, CNBT
will not receive any proceeds from the sale of such shares.

   CNBT will receive approximately $981,000 upon exercise of the stock options
underlying the shares of common stock that may be sold by the selling
stockholders.  The proceeds received by CNBT will be used for general corporate
purposes.


                          DESCRIPTION OF CAPITAL STOCK

   As of the date of this prospectus, our Articles of Incorporation authorize us
to issue 30,000,000 shares of Common Stock, $1.00 par value per share. As of
March 31, 1999. 4,911,117 shares of common stock were outstanding. The
statements are brief summaries of certain provisions of our Articles of
Incorporation and bylaws copies of which have been incorporated by reference as
an exhibit to the Registration Statement of which this prospectus is a part, and
are qualified in their entirety by reference to such documents.

COMMON STOCK

   The holders of the common stock are entitled to one vote for each share owned
on all matter that require their vote. Holders of common stock may not cumulate
their votes for the election of directors and do not have preemptive rights to
acquire any additional, unissued, or treasury shares of CNBT, or securities
convertible into or carrying a right to subscribe to or acquire shares of CNBT.

   Holders of common stock will be entitled to receive dividends out of funds
legally available therefor, if and when properly declared by the Board of
Directors. See "Risk Factors -- Restrictions on Ability to Pay Dividends."

   If we liquidate, dissolve, or wind up our business, the holders of common
stock will share pro rata in any distribution of assets after all of our
indebtedness has been retired.

                                       8
<PAGE>

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND BYLAWS

   Certain provisions of our Articles of Incorporation and bylaws could make
more difficult our acquisition by means of a tender offer or a proxy contest or
otherwise and the removal of incumbent officers and directors. These provisions
are intended to discourage certain types of coercive takeover practices and
inadequate takeover bids and to encourage persons seeking to acquire control of
CNBT to negotiate first with CNBT.

    Advance Notice of Stockholder Proposals and Nominations.  Our bylaws
establish advance notice procedures for stockholders to make nominations of
candidates for election as directors or bring other business before an annual
meeting of stockholders. The stockholder notice procedures provide that only
persons who are nominated by, or at the direction of, the Board of Directors, or
by a stockholder who has given timely written notice to the Secretary of CNBT
prior to the meeting at which directors are to be elected, will be eligible for
election as directors and that, at an annual meeting, only such business may be
conducted as has been brought before the meeting by, or at the direction of, the
Board of Directors or by a stockholder who has given timely written notice to
the Secretary of CNBT of such stockholder's intention to bring such business
before such meeting.

   The stockholder notice procedure may have the effect of precluding a contest
for the election of directors or the consideration of stockholder proposals if
the proper procedures are not followed, and of discouraging or deterring a third
party from conducting a solicitation of proxies to elect its own slate of
directors or to approve its own proposal, without regard to whether
consideration of such nominees or proposals might be harmful or beneficial to
CNBT and its stockholders.

                                       9
<PAGE>

                              SELLING STOCKHOLDERS

   This prospectus relates to the reoffer and resale of an aggregate of 157,450
shares of Common Stock acquired or to be acquired by B. Ralph Williams, Frank G.
Cook, Randall W. Dobbs, Joe E. Ives, Mary A. Walker, Sheila J. Duffy, John M.
James, Robert J. Kramer (each of whom may be considered to be an affiliate of
CNBT pursuant to Rule 405 of the Commission) upon the exercise of options
granted to such persons pursuant to our 1992, 1994, 1995, 1997, and 1998 stock
option plans.

   As of June 30, 1999, such officers and directors have been granted options or
acquired shares under the stock option plans, as follows:
<TABLE>
<CAPTION>

                                                                                   Other Shares
                                              Options                                 Owned
                                              Granted                   Option      Before and
                                                and        Options      Shares      After the
Name and Position                           Unexercised   Exercised      Owned       Offering
- -----------------------------------------   -----------   ---------   ------------   --------
<S>                                         <C>           <C>         <C>            <C>
B. Ralph Williams, President and                 29,040      10,000         10,000     71,769
  Chief Executive Officer

Frank G. Cook, Chairman of the                   10,000           0             --    159,216
  Board

Randall W. Dobbs, Executive Vice                 18,800       5,390          5,390     13,963
  President, Chief Operations Officer,
  and Advisory Director

Joe E. Ives, Executive Vice President            12,904      11,616              0     21,878
  and Director

Mary A. Walker, Executive Vice                   20,890       3,300          3,300     30,421
  President and Director

Sheila J. Duffy, President of Sugar              22,100           0             --          0
  Land Branch and Advisory Director

John M. James, Senior Vice President             19,680       2,420              0          0

Robert J. Kramer, President of West              10,000           0             --          0
  Houston Branch and Advisory
  Director
</TABLE>

                                       10
<PAGE>

                              PLAN OF DISTRIBUTION

  The selling stockholders may offer and sell their shares at various times in
one or more of the following transactions:

   .    on the Nasdaq Stock Market or any securities exchange where the common
        stock is listed;
   .    in the over-the-counter market;
   .    in privately negotiated transactions;
   .    by pledge to secure debts and other obligations; or
   .    in a combination of any of the above transactions

   The selling stockholders may sell their shares at market prices prevailing at
the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices.

   The selling stockholders may use broker-dealers to sell their shares. If this
happens, broker-dealers will receive discounts or commissions from the selling
stockholders, or they will receive commissions from purchasers of shares for
whom they act as agents. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions (which may
involve cross and block transactions and which may involve sales to and through
other broker-dealers, including transactions of the nature described in the
preceding two sentences) on the Nasdaq Stock Market, in negotiated transactions
or otherwise, at market prices prevailing at the time of sale or at negotiated
prices, and in connection with such resales may pay to or receive commissions
from the purchasers of such shares.

   We will pay substantially all the expenses incident to this offering of the
shares of common stock by the selling stockholders other than commissions and
discounts of under  writers, dealers or agents.

   In order to comply with certain states' securities laws, if applicable, the
common stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers.  In addition, in certain states the common stock
may not be sold unless the common stock has been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and is complied with.


                                       11
<PAGE>

                                 LEGAL MATTERS

   Snell & Smith, A Professional Corporation, Houston, Texas, will issue an
opinion about the legality of the shares for us and for the selling
stockholders.


                                    EXPERTS

   The consolidated financial statements and schedules of CNBT incorporated in
this prospectus by reference to CNBT's Annual Report on Form 10-K for the year
ended December 31, 1998, have been examined by Mann Frankfort Stein & Lipp,
P.C., independent accountants, to the extent and for the periods indicated in
their report thereon and are incorporated by reference herein in reliance upon
their report given on their authority as experts in accounting and auditing.

                                       12
<PAGE>

                          --------------------------

No one (including any salesman or broker) is authorized to provide oral or
written information about this offering that is not included in the Prospectus.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby to any person to whom it is
unlawful to make such offer or solicitation.

                          --------------------------
                          --------------------------


                                 157,450 Shares



                             CNBT BANCSHARES, INC.



                                  COMMON STOCK






                                   PROSPECTUS

                               -----------------



                                July  ___, 1999

                          --------------------------

<PAGE>

                                    Part II

ITEM 3.  INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

   The following documents are incorporated by reference in the registration
statement:

     (a) The registrant's latest annual report on Form 10-K, or, if the
financial statements therein are more current, the registrant's latest
prospectus, other than the prospectus of which this document is a part, filed
pursuant to rule 424(b) or (c) of the Securities Exchange Commission under the
Securities Act of 1933.

     (b) All other reports filed by the registrant pursuant to sections 13(a) or
15(d) of the Securities Exchange Act of 1934 since the end of the fiscal year
covered by the annual report or the prospectus referred to in (a) above.

     (c) The descriptions of the registrant's Common Stock which are contained
in the registrant's registration statement filed under section 12 of the
Securities Exchange Act of 1934, including any amendment or reports filed for
the purpose of updating such descriptions.

     All documents subsequently filed by the registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment to the registration statement which
indicates that all of the shares of common stock offered have been sold or which
deregisters all of such shares then remaining unsold, shall be deemed to be
incorporated by reference in the registration statement and to be a part hereof
from the date of filing of such documents.  Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.  Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.

ITEM 4.  DESCRIPTION OF SECURITIES.

                                 Not applicable

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

                                 Not applicable

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The Bylaws of the Registrant provide that, subject to certain limitations,
its officers and directors (and certain other individuals acting on behalf of
the Registrant) will be indemnified, to the fullest extent permitted by law, by
the Registrant against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by any such person who was, is, or is threatened to
be made a named defendant or respondent in a proceeding because the person was
or is a director or officer if it is determined that such person (i) conducted
himself in good faith, (ii) reasonably believed (a) in the case of conduct in
his official capacity as a director or officer of the Registrant, that his
conduct was in the Registrant's best interests, or (b) in other cases, that his
conduct was at least not opposed to the Registrant's best interests, and (iii)
in the case of any criminal proceeding, had no reasonable cause to believe that
his conduct was unlawful.

                                      II-1
<PAGE>

In addition, the Bylaws require the Registrant to indemnify a director or
officer for any action that such director or officer is wholly successful in
defending on the merits.

     The Registrant's Articles of Incorporation provide that a director of the
Registrant will not be liable to the Registrant for monetary damages for an act
or omission in the director's capacity as a director, except to the extent not
permitted by Article 1302-7.06B of the Texas Miscellaneous Corporation Laws Act.
Texas law does not permit exculpation of liability in the case of (i) a breach
of the director's duty of loyalty to the Registrant or the stockholders, (ii) an
act or omission not in good faith that constitutes a breach of duty of the
director to the Registrant or an act or omission that involves intentional
misconduct or a knowing violation of the law, (iii) a transaction from which a
director received an improper benefit, whether or not the benefit resulted from
an action taken within the scope of the director's office, or (iv) an action or
omission for which the liability of the director is expressly provided by
statute.

     The Registrant may provide liability insurance for each director and
officer for certain losses arising from claims or charges made against them
while acting in their capacities as directors or officers of the Registrant,
whether or not the Registrant would have the power to indemnify such person
against such liability, as permitted by law.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

     This registration statement covers the future resale of 18,690 shares of
Common Stock, $1.00, of the Registrant that have been previously issued by the
Registrant to three option holders upon the exercise of stock options. Such
issuances were exempt transactions under Section 4(2) of the Securities Act of
1933, as amended, as they did not involve a public offering.

ITEM 8.  EXHIBITS.

     Unless otherwise indicated below as being incorporated by reference to
another filing of the Registrant with the Commission, each of the following
exhibits is filed herewith:

       3.1  Articles of Incorporation of the Registrant [Incorporated by
            reference to Exhibit 3.1 to the Form S-4 Registration Statement
            filed April 14 1998, File No. 333-0050039, as amended].

       3.2  Bylaws of the Registrant. [Incorporated by reference to Exhibit 3.2
            to the Form S-4 Registration Statement filed April 14, 1998,
            File No. 333-0050039, as amended].

       5.1  Opinion of Snell & Smith, A Professional Corporation.

      10.1  1992 Stock Option Plan.

      10.2  1994 Stock Option Plan.

      10.3  Form of Stock Option Agreement under option plans.

      23.1  Consent of Mann Frankfort Stein & Lipp, P.C.

                                      II-2
<PAGE>

       23.2  Consent of Snell & Smith, A Professional corporation (included in
             Exhibit 5.1).

       24.1  Powers of Attorney (included on the signature page to this
             Registration Statement).

ITEM 9.  UNDERTAKINGS.

     (a) The undersigned registrant hereby undertakes:

          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this registration statement.

               (i) To include any prospectus required by section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect in the prospectus any facts or events arising
          after the effective date of the registration statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate, represent a fundamental change in the information set forth
          in the registration statement;

               (iii)  To include any material information with respect to the
          plan of distribution not previously disclosed in the registration
          statement or any material change to such information in the
          registration statement;

          Provided, however, that paragraph (a)(1)(i) and (a)(1)(ii) shall not
          apply if the information required to be included in a post-effective
          amendment by those paragraphs is contained in periodic reports filed
          by the registrant pursuant to section 13 or section 15(d) of the
          Securities Exchange Act of 1934 that are incorporated by reference in
          the registration statement.

          (2) That, for the purpose of determining any liability under the
     Securities Act of 1933, each such post-effective amendment shall be deemed
     to be a new registration statement relating to the securities offered
     therein, and the offering of such securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (3) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.

     (b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     (e) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security

                                      II-3
<PAGE>

holders that is incorporated by reference and furnished pursuant to and meeting
the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act
of 1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

     (f) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.  In the event that a claim or indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.


                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bellaire, State of Texas, on the 20th day of July,
1999.

                                    CNBT BANCSHARES, INC.

                                    By /s/ B. Ralph Williams
                                      -----------------------------------------
                                           B. Ralph Williams
                                           President and Chief
                                           Executive Officer

                                      II-4
<PAGE>

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints B. Ralph Williams and Randall W. Dobbs or any
either of them, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the 20th day of July, 1999.

          Name                                    Title
          ----                                    -----

 /s/ Frank G. Cook                      Chairman of the Board (Chief
- --------------------------------        Financial Officer)
Frank G. Cook


 /s/ B. Ralph Williams                  President, Chief Executive Officer,
- --------------------------------        and Director
B. Ralph Williams

 /s/ Randall W. Dobbs                   Executive Vice President, Chief
- --------------------------------        Operations Officer, and Advisory
Randall W. Dobbs                        Director (Chief Accounting Officer)


 /s/ Mary A. Walker                     Executive Vice President and Director
- --------------------------------
Mary A. Walker

 /s/ Joe E. Ives                        Executive Vice President and Director
- --------------------------------
Joe E. Ives

 /s/ John B. Barnes                     Director
- --------------------------------
John B. Barnes


 /s/ William H. Bruecher, Jr.           Director
- --------------------------------
William H. Bruecher, Jr.


 /s/ James K. Chancellor                Director
- ---------------------------------
James K. Chancellor


 /s/ C. Joe Chapman                     Director
- ---------------------------------
C. Joe Chapman


 /s/ Robert C. Dawson                   Director
- ---------------------------------
Robert C. Dawson


 /s/ James B. Earthman, III             Director
- ---------------------------------
James B. Earthman, III


 /s/ Lura M. Griffith                   Director
- ---------------------------------
Lura M. Griffin

                                      II-5
<PAGE>

 /s/ Alton S. Hollis                    Director
- ---------------------------------
Alton L. Hollis


 /s/ Larry L. January                   Director
- ---------------------------------
Larry L. January


 /s/ Albert V. Kochran                  Director
- ---------------------------------
Albert V. Kochran



 /s/ I.W. Marks                         Director
- ---------------------------------
I.W. Marks


 /s/ David E. Preng                     Director
- ---------------------------------
David E. Preng

                                      II-6
<PAGE>

                                 EXHIBIT INDEX


Exhibit                                                                   Page
 3.1      Articles of Incorporation of the Registrant
          [Incorporated by reference to Exhibit 3.1 to the
          Form S-4 Registration Statement filed April 14,
          1998, File No. 333-0050039, as amended].
 3.2      Bylaws of the Registrant [Incorporated by reference to
          Exhibit 3.2 to the Form S-4 Registration Statement
          filed April 14, 1998, File No. 333-0050039, as amended].
 5.1      Opinion of Snell & Smith, A Professional Corporation.
10.1      1992 Stock Option Plan.
10.2      1994 Stock Option Plan.
10.3      Form of Stock Option Agreement under option plans.
23.1      Consent of Mann Frankfort Stein & Lipp, P.C.
23.2      Consent of Snell & Smith, A Professional Corporation
          (included in Exhibit 5.1).
24.1      Powers of Attorney (included on the signature page to this
          Registration Statement).

                                      II-7

<PAGE>

                                                                     EXHIBIT 5.1


                      [Letterhead of Snell & Smith, P.C.]



                                 July 15, 1999



CNBT Bancshares, Inc.
5320 Bellaire Boulevard
Bellaire, Texas 77401

Ladies and Gentlemen:

     We have acted as counsel for CNBT Bancshares, Inc., a Texas corporation
(the "Registrant"), with respect to certain legal matters in connection with the
registration by the Registrant under the Securities Act of 1933, as amended (the
"Securities Act"), of the offer and sale of up to 184,604 shares of  Common
Stock, par value $1.00 per share (the "Shares"), for issuance under the
Registrant's 1992, 1994, 1995, 1997, and 1998 Stock Option Plans.

     In connection with the foregoing, we have examined or are familiar with the
Articles of Incorporation of the Registrant, the Bylaws of the Registrant, the
1992, 1994, 1995, 1997, and 1998 Stock Option Plans, the corporate proceedings
with respect to the registration of the Shares, and the Registration Statement
on Form S-8 filed in connection with the registration of the Shares (the
"Registration Statement"), and such other certificates, instruments, and
documents as we have considered necessary or appropriate for purposes of this
opinion.

     Based upon the foregoing, we are of the opinion that the Shares have been
duly authorized and when issued by the Registrant pursuant to the 1992, 1994,
1995, 1997, and 1998 Stock Option Plans will be validly issued, fully paid, and
non-assessable.

     The foregoing opinion is limited to the laws of the United States of
America and the State of Texas. For purposes of this opinion, we assume that the
Shares will be issued in compliance with all applicable state securities or Blue
Sky laws.

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act and the rules and regulations thereunder.

                                    Very truly yours,

                                    Snell & Smith, A Professional
                                         Corporation

<PAGE>

                                                                    Exhibit 10.1

                        CITIZENS NATIONAL BANK OF TEXAS
                             1992 STOCK OPTION PLAN

       SECTION 1.   Purpose of the Plan. The purpose of Citizens National Bank
of Texas 1992 Stock Option Plan ("Plan") is to encourage ownership of common
stock, $2.75 par value ("Common Stock"), of Citizens National Bank of Texas, a
national banking association (the "Bank"), by eligible key employees of the Bank
and its Affiliates (as defined below) ana to provide increased incentive for
such employees to render services and to exert maximum effort for the business
success of the Bank). In addition, the Bank expects that the Plan will further
strengthen the identification of employees with the stockholders. Certain
options to be granted under this Plan are intended to qualify as Incentive Stock
Options ("ISOs") pursuant to Section 422 of the Internal Revenue Code of 1986,
as amended ("Code"), while other options granted under this Plan will be
nonqualified options which are not intended to qualify as ISOs ("Nonqualified
Options"), either or both as provided in the agreements evidencing the options
as provided in Section 6 hereof. As used in this Plan, the term "Affiliates"
means any parent of the Bank and any subsidiary of the Bank within the meaning
of Code Sections 424 (e) and (f), respectively.

     SECTION 2. Administration of the Plan.

            (a)   Composition of Committee. The Plan shall be administered by
     the Compensation Committee (the "Committee") designated by the Board of
     Directors of the Bank (the "Board"), which shall also designate the
     Chairman of the Committee. If the Bank is governed by Rule 16b-3
     promulgated by the Securities and Exchange commission ("Commission")
     pursuant to the Securities Exchange Act of 1934, as amended ("Exchange
     Act"), no director shall serve as a member of the Committee unless he is a
     "disinterested person" within the meaning of such Rule 16b-3, i.e., a
     director who is not, during the one year prior to service as an
     administrator of this Plan, or during such service, granted or awarded
     options cr stock appreciate rights pursuant to this Plan or any other plan
     of the Bank or its Affiliates, except as otherwise permitted by Rule 16b-3.
     If the Bank is governed by Rule 16b-3, no member of such Committee shall be
     eligible to receive stock options under this Plan or any other plan of the
     Bank or its Affiliates while serving on the Committee.
<PAGE>

          (b) Committee Action. The Committee shall hold its meetings at such
     times and places as it may determine. A majority of its members shall
     constitute a quorum, and all determinations of the Committee shall be made
     by not less than a majority of its members. Any decision or determination
     reduced to writing and signed by a majority of the members shall be fully
     as effective as if it had been made by a majority vote of its members at a
     meeting duly called and held. The Committee may designate the Secretary or
     other Bank employees to assist the Committee in the administration of the
     Plan, and may grant authority to such persons to execute award agreements
     or other documents on behalf of the Committee and the Bank. Any duly
     constituted committee of the Board satisfying the qualifications of this
     Section 2 may be appointed as the Committee.

            (c) Committee Expenses. All expenses and liabilities incurred by the
     Committee in the administration of the Plan shall be borne by the Bank. The
     Committee may employ attorneys, consultants, accountants or other persons.

       SECTION 3.   Stock Reserved for the Plan. Subject to adjustment as
provided in Section 6(k) hereof, the aggregate number of shares of Common Stock
that may be optioned under the Plan is $25,000. The shares subject to the Plan
shall consist of authorized but unissued shares of Common Stock and such number
of shares shall be and is hereby reserved for sale for such purpose. Any of such
shares which may remain unsold and which are not subject to outstanding options
at the termination of the Plan shall cease to be reserved for the purpose of the
Plan, but until termination of the Plan or the termination of the last of the
options granted under the Plan, whichever last occurs, the Bank shall at all
times reserve a sufficient number of shares to meet the requirements of the
Plan. Should any option expire or be cancelled prior to its exercise in full,
the shares theretofore subject to such option may again be made subject to an
option under the Plan.

       SECTION 4.   Eligibility. The persons eligible to participate in the Plan
as a recipient of options ("Optionee") shall include only key employees
(including officers and directors who are also key employees) of the Bank or its
Affiliates at the time the option is granted; provided, however, the members of
the Committee shall not be eligible to-be granted options. Directors of the Bank
shall not be eligible to participate in this Plan as directors, but directors
otherwise qualified shall be eligible to participate. An employee who has been
granted an option hereunder may be granted an additional option or options, if
the Committee shall so determine.

     SECTION 5. Grant of Options.

          (a)   Committee Discretion. The Committee shall have discretionary
     authority (i) to determine, authorize and designate those key employees of
     the Bank or its Affiliates who are to receive options under the Plan, (ii)
     to determine the number of shares of Common Stock to be covered by such
     options and the terms thereof, and (iii) to determine the type of option
     granted: ISO, Nonqualified option or a combination of ISO and Nonqualified
     Options. The Committee shall thereupon grant options in accordance with
     such determinations as evidenced by a written option agreement. Subject to
     the express provisions of the Plan, the Committee shall have discretionary
     authority to prescribe, amend and rescind rules and

                                       2
<PAGE>

     regulations relating to the Plan, to interpret the Plan, to prescribe and
     amend the terms of the option agreements (which need not be identical) and
     to make all other determinations deemed necessary or advisable for the
     administration of the Plan.

            (b)   Stockholder Approval. All options granted under this Plan are
     subject to, and may not be exercised before, the approval of this Plan at
     the Annual Meeting of Shareholders following the adoption of the Plan by
     the Board of Directors, or at a special meeting of share  holders called
     for that purpose prior to the first anniversary date of the Board meeting
     held to approve the Plan, by the affirmative vote of the holders of a
     majority of the outstanding shares of the Bank present, or represented by
     proxy, and entitled to vote thereat; provided that if such approval by the
     shareholders of the Bank at the annual or special meeting is not
     forthcoming, all options previously granted under this Plan shall be void.

            (c)   Limitation on Incentive Stock Options. The aggregate fair
     market value (determined in accordance with Section 6(b) of this Plan at
     the time the option is granted) of the Common Stock with respect to which
     ISOs may be exercisable for the first time by any Optionee during any
     calendar year under all such plans of the Bank and its Affiliates shall not
     exceed $100,000.

       SECTION 6.  Terms and conditions. Each option granted under the Plan
shall be evidenced by an agreement, in a form approved by the Committee, which
shall be subject to the following express terms and conditions and to such other
terms and conditions as the Committee may deem appropriate.

          (a)   Option Period. The Committee shall promptly notify the Optionee
     of the option grant and a written agreement shall promptly be executed and
     delivered by and on behalf of the Bank and the Optionee, provided that the
     option grant shall expire if a written agreement is not signed by said
     Optionee (or his agent or attorney) and returned to the Bank within 60 days
     from date of receipt by the Optionee of such agreement. The date of grant-
     shall be the date the option is actually granted by the Committee, even
     though the written agreement may be executed and delivered by the Bank and
     the Optionee after that date. Each option agreement shall specify the
     period for which the option thereunder is granted (which in no event shall
     exceed ten years from the date of grant) and shall provide that the option
     shall expire at the end of such period. If the original term oi an option
     is less than ten years from the date of grant, the option may be amended
     prior to its expiration, with the approval of the Committee and the
     Optionee, to extend the term so that the term as amended is not more than
     ten years from the date of grant. However, in the case of an ISO granted to
     an individual who, at the time of grant, owns stock possessing more than 10
     percent of the total combined voting power of all classes of stock of the
     Bank or its Affiliates ("Ten Percent Stockholder"), such period shall not
     exceed five years from the date of grant.

          (b)   Option Price. The purchase price of each share of Common Stock
     subject to each option granted pursuant to the Plan shall be determined by
     the Committee at the time the option is granted and, in the case of ISOs,
     shall not be less than 100% of the fair market

                                       3
<PAGE>

     value of a share of Common Stock on the date the option is granted, as
     determined by the Committee. In the case of an ISO granted to a Ten Percent
     Stockholder, the option price shall not be less than 110% of the fair
     market value of a share of Common Stock on the date the option is granted.
     The purchase price of each share of Common Stock subject to a Nonqualified
     Option under this Plan shall be determined by the Committee prior to
     granting the option. The Committee shall set the purchase price for each
     share subject to a Nonqualified option at either the fair market value of
     each share on the date the option is granted, or at such other price as the
     Committee in its sole discretion shall determine.

     For all purposes under the Plan, the fair market value of a share of Common
Stock on a particular date shall be equal to the mean of the reported high and
low sales prices of the Common Stock on the New York Stock Exchange Composite
Tape on that date, or if no prices are reported on that date, on the last
preceding date on which such prices of the Common Stock are so reported. If the
Common Stock is not traded on the New York Stock Exchange at the time a
determination of its fair market value is required to be made hereunder, its
fair market value shall be deemed to be equal to the average between the closing
bid and ask price of the Common Stock on the most recent date the Common Stock
was publicly traded. In the event the Common Stock is not publicly traded at the
time a determination of its value is required to be made hereunder, the
determination of its fair market value shall be made by the Committee in such
manner as it deems appropriate.

       (c)   Exercise Period. The Committee may provide in the option agreement-
that an option may be exercised in whole, immediately, or is to be exercisable
in increments. However, no portion of any option may be exercisable by an
Optionee prior to the approval of the Plan by the stockholders of the Bank.

       (d)   Procedure for Exercise. Options shall be exercised by the delivery
of written notice to the Secretary of the Bank setting forth the number of
shares with respect to which the option is being exercised. Such notice shall be
accompanied by cash or cashier's check, bank draft, postal or express money
order payable to the order of the Bank, or at the option of the Optionee, by
Common Stock theretofore owned by such Optionee (or any combination of cash and
Common Stock). The notice shall specify the address to which the certificates
for such shares are to be mailed. An Optionee shall be deemed to be a
stockholder with respect to shares covered by an option on the date the Bank
receives such written notice and such option payment.

As promptly as practicable after receipt of such written notification and
payment, the Bank shall deliver to the Optionee certificates for the number of
shares with respect to which such option has been so exercised, issued in the
Optionee's name; provided, however, that such delivery shall be deemed effected
for all purposes when a stock transfer agent of the Bank shall have deposited
such certificates in the United States mail, addressed to the Optionee at the
address specified pursuant to this Section 6(d).

       (e)   Termination of Employment. If an employee to whom an option is
granted ceases to be employed by the Bank for any reason other than death or
disability, any option which is exercisable on the date of such termination of
employment may be exercised during a three-month period

                                       4
<PAGE>

beginning on such date; provided however, if an Optionee's employment is
terminated because of the Optionee's theft or embezzlement from the Bank,
disclosure of trade secrets of the Bank or the commission of a willful,
felonious act while in the employment of the Bank, then any option or
unexercised portion thereof granted to said Optionee shall expire upon such
termination of employment.

       (f)   Disability or Death of Optionee. In the event of the determination
of disability or death of an Optionee under the Plan while he is employed by the
Bank, the options previously granted to him may be exercised (to the extent he
would have been entitled to do so at the date of the determination of disability
or death) at any time and from time to time, within a three-month period after
such determination of disability or death, by the former employee, the guardian
of his estate, the executor or administrator of his estate or by the person or
persons to whom his rights under the option shall pass by will or the laws of
descent and distribution, but in no event may the option be exercised after its
expiration under the terms of the option agreement. An employee shall be deemed
to be disabled if, in the opinion of a physician selected by the Committee, he
is incapable of performing services for the Bank of the kind he was performing
at the time the disability occurred by reason of any medically determinable
physical or mental impairment which can be expected to result in death or to be
of long, continued and indefinite duration. The date of determination of
disability for purposes hereof shall be the date of such determination by such
physician.

     (g)     Assignability. An option shall not be assignable or otherwise
transferable except by will or by the laws of descent and distribution. During
the lifetime of an Optionee, an option shall be exercisable only by him.

       (h)  Incentive Stock Options. Each option agreement may contain such
terms and provisions as the committee may determine to be necessary or desirable
in order to qualify an option designated as an incentive stock option.

       (i)   No Rights as Stockholder. No Optionee shall have any rights as a
stockholder with respect to shares covered by an option until the option is
exercised by the written notice and accompanied by payment as provided in clause
(d) above.

       (j)  Extraordinary Corporate Transactions. The existence of outstanding
options shall not affect in any way the right or power of the Bank or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations, exchanges or other changes in the Bank's capital structure or
its business, or any merger or consolidation of the Bank, or any issuance of
Common Stock or other securities or subscription rights thereto, or any issuance
of bonds, debentures, preferred or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or the dissolution or liquidation of the
Bank, or any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceeding, whether of a similar character or
otherwise. If the Bank recapitalizes or otherwise changes its capital structure,
or merges, consolidates, sells all of its assets or dissolves (each of the
foregoing a "Fundamental Change"), then thereafter upon any exercise of an
option theretofore granted (the Optionee shall be entitled to purchase) under
such option, in lieu of the number of shares of Common Stock as to which option
shall then be

                                       5
<PAGE>

exercisable, the number and class of shares of stock and securities to which the
Optionee would have been entitled pursuant to the terms of the Fundamental
Change if, immediately prior to such Fundamental Change, the Optionee had been
the holder of record of the number of shares of Common Stock as to which such
option is then exercisable. If (i) the Bank shall not be the surviving entity in
any merger or consolidation (or survives only as a subsidiary of another
entity), (ii) the Bank sells all or substantially all of its assets to any other
person or entity (other than a wholly owned subsidiary), (iii) any person or
entity (including a "group" as contemplated by Section 13(d)(3) of the Exchange
Act) acquires or gains ownership or control of (including, without limitation,
power to vote) more than 50% of the outstanding shares of Common Stock, (iv) the
Bank is to be dissolved and liquidated, or (v) as a result of or in connection
with a contested election of directors, the persons who were directors of the
Bank before such election shall cease to constitute a majority of the Board
(each such event in clauses (i) through (v) above is referred to herein as a
"Corporate Change"), the Committee, in its sole discretion, may accelerate the
time at which all or a portion of an Optionee's Options may be exercised for a
limited period of time before or after a specified date.

       (k)   Changes in Bank's Capital Structure. If the outstanding shares of
Common Stock or other securities of the Bank, or both, for which the option is
then exercisable shall at any time be changed or exchanged by declaration of a
stock dividend, stock split, combination of shares, recapitalization, or
reorganization, the number and kind of shares of Common Stock or other
securities which are subject to the Plan or subject to any options theretofore
granted, and the option prices, shall be appropriately and equitably adjusted so
as to maintain the proportionate number of shares or other securities without
changing the aggregate option price.

       (l)   Acceleration of Options. Except as hereinbefore expressly provided,
(i) the issuance by the Bank of shares of stock of any class of securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Bank convertible
into such shares or other securities, (ii) the payment of a dividend in property
other than Common Stock or (iii) the occurrence of any similar transaction, and
in any case whether or not for fair value, shall not affect, and no adjustment
by reason thereof shall be made with respect to, the number of shares of Common
Stock subject to options theretofore granted or the purchase price per share,
unless the Committee shall determine in its sole discretion than an adjustment
is necessary to provide equitable treatment to Optionee. Notwithstanding
anything to the contrary contained in this Plan, the Committee may in its sole
discretion accelerate the time at which any option may be exercised, including,
but not limited to, upon the occurrence of the events specified in this Section
6, and is authorized at any time (with the consent of the Optionee) to purchase
options pursuant to Section 7.

       (m)   Stockholders Agreement. The Committee shall provide in the option
agreement that prior to receiving any shares of Common Stock or other securities
on the exercise of the option, the Optionee (or the Optionee's representative
upon the Optionee's death) shall be required to execute the Bank's Stockholder
Agreement.

                                       6
<PAGE>

     SECTION 7.   Relinquishment of Options.

          (a)   The Committee, in granting options hereunder, shall have
discretion to determine whether or not options shall include a right of
relinquishment as hereinafter provided by this Section 7. The Committee shall
also have discretion to determine whether an option agreement evidencing an
option initially granted by the Committee without a right of relinquishment
shall be amended or supplemented to include such a right of relinquishment.
Neither the Committee nor the Bank shall be under any obligation or incur any
liability to any person by reason of the Committee's refusal to grant or include
a right of relinquishment in any option granted hereunder or in any option
agreement evidencing the same. Subject to the Committee's determination in any
case that the grant by it of a right of relinquishment is consistent with
Paragraph I hereof, any option granted under this Plan, and the option agreement
evidencing such option, may provide:

          (i)   That the Optionee, or his heirs or other legal representatives
     to the extent entitled to exercise the option under the terms thereof, in
     lieu of purchasing the entire number of shares subject to purchase
     thereunder, shall have the right to relinquish all or any part of the then
     unexercised portion of the option (to the extent then exercisable) for a
     number of shares of Common Stock, for an amount of cash or for a
     combination of Common Stock and cash to be determined in accordance with
     the following provisions of this clause (i):

               (A) The written notice of exercise of such right of
          relinquishment shall state the percentage, if any, of the Appreciated
          Value (as defined below) that the Optionee elects to receive in cash
          ("Cash Percentage"), such Cash Percentage to be in increments of 10%
          of such Appreciated Value up to 100% thereof;

               (B) The number of shares of Common Stock, if any, issuable
          pursuant to such relinquishment shall be the number of such shares,
          rounded to the next greater number of full shares, as shall be equal
          to the quotient obtained by dividing (A) the difference between (I)
          the Appreciated Value and (II) the result obtained by multiplying the
          Appreciated Value and the Cash Percentage by (B) the then current
          market value per share of Common Stock;

               (C) The amount of cash payable pursuant to such relinquishment
          shall be an amount equal to the Appreciated Value less the aggregate
          current market value of the Common Stock issued pursuant to such
          relinquishment, if any, which cash shall be paid by the Bank subject
          to such conditions as are deemed advisable by the Committee to permit
          compliance by the Bank with the withholding provisions applicable t o
          employers under the Code and any applicable state income tax laws;

               (D) For the purpose of this clause (i), "Appreciated Value" means
          the excess of (x) the aggregate current market value of the shares of
          Common Stock covered by the option or the portion thereof to be
          relinquished over (y) the aggregate purchase price for such shares
          specified in such option;

                                       7
<PAGE>

          (ii) That such right of relinquishment may be exercised only upon
     receipt by the Bank of a written notice of such relinquishment which shall
     be dated the date of election to make such relinquishment; and that, for
     the purposes of this Plan, such date of election shall be deemed to be the
     date when such notice is sent by registered or certified mail, or when
     receipt is acknowledged by the Bank, if mailed by other than registered or
     certified mail or if delivered by hand or by any telegraphic communications
     equipment of the sender or otherwise delivered; provided, that, in the
     event the method just described for determining such date of election shall
     not be or remain consistent with the provisions of Section 16(b) of the
     Exchange Act or the rules and regulations adopted by the Commission
     thereunder, as presently existing or as may be hereafter amended, which
     regulations exempt from the operation of Section 16(b) of the Exchange Act
     in whole or in part any such relinquishment transaction, then such date of
     election shall be determined by such other method consistent with Section
     16(b) of the Exchange Act or the rules and regulations thereunder as the
     Committee shall in its discretion select and apply;

          (iii) That the "current market value" of a share of Common Stock on
     a particular date shall be deemed to be its fair market value on that date
     as determined in accordance with Paragraph 6(b); and

          (iv) That the option, or any portion thereof, may be relinquished only
     to the extent that (A) it is exercisable on the date written notice of
     relinquishment is received by the Bank, (B) the Committee, subject to the
     provisions of Paragraph 7(b), shall consent to the election of the holder
     relinquish such option in whole or in part for cash as set forth in such
     written notice of relinquishment and (C) the holder of such option pays, or
     makes provision satisfactory to the Bank for the payment of, any taxes
     which the Bank is obligated to collect with respect to such relinquishment.

     (b) The Committee shall have sole discretion to consent to or disapprove,
and neither the Committee nor the Bank shall be under any liability by reason of
the Committee's disapproval of, any election by a holder of an option to
relinquish such option in whole or in part for cash as provided in Paragraph
7(a), except that no such consent to or approval of a relinquishment for cash
shall be required under the following circumstances. Each Optionee who is
subject to the short-swing profits recapture provisions of Section 16(b) of the
Exchange Act ("Covered Optionee") shall be entitled to receive payment only in
cash when options are relinquished during any window period commencing on the
third business day following the Bank's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth business day following
such release ("Window Period"); provided, however, that payment shall be so
made in cash only in respect of 50% of the options covered by any stock option
agreement. A Covered Optionee shall be entitled to receive payment only in
shares of Common Stock upon (a) the relinquishment of options outside a Window
Period and (b) the relinquishment of options during a Window Period once such
Optionee has received payment in cash for the relinquishment of 50% of the
options covered by any stock option agreement.

     (c) The Committee, in granting options hereunder, shall have discretion to
determine the

                                       8
<PAGE>

terms upon which such options shall be relinquishable, subject to the applicable
provisions of this Plan, and including such provisions as are deemed advisable
to permit the exemption from the operation from Section 16(b) of the Exchange
Act of any such relinquishment transaction, and options outstanding, and option
agreements evidencing such options, may be amended, if necessary, to permit such
exemption. If an option is relinquished, such option shall be deemed to have
been exercised to the extent of the number of shares of Common Stock covered by
the option or part thereof which is relinquished, and no further options may be
granted covering such shares of Common Stock.

     (d) Neither any option nor any right to relinquish the sum to the Bank as
contemplated by this paragraph 7 shall be assignable or otherwise transferable
except by will or the laws of descent and distribution.

     (e) No right of relinquishment may be exercised within the first six months
after the initial award of any Option containing, or the amendment or
supplementation of any existing option agreement adding, the right of
relinquishment; provided, however, that this limitation shall not apply in the
event of death or disability.

     SECTION 8.   Amendments or Termination. The Board  may amend, alter or
discontinue the Plan, but no amendment or alteration shall be made which would
impair the rights of any Optionee, without his consent, under any option
theretofore granted, or which, without the approval of the stockholders, would:
(i) except as is provided in Section 6(k) of the Plan, increase the total
number of shares reserved for the purposes of the Plan, (ii) change the class of
persons eligible to participate in the Plan as provided in Section 4 of the
Plan, (iii) extend the applicable maximum option period provided for in Section
6(a) of the Plan, (iv) extend the expiration date of this Plan set forth in
Section 14 of the Plan, (v) except as provided in Section 6(k) of the Plan,
decrease to any extent the option price of any option granted under the Plan or
(vi) withdraw the administration of the Plan from the Committee.

       SECTION 9. Compliance With Other Laws and Regulations.  The Plan, the
grant and exercise of options thereunder, and the obligation of the Bank to sell
and deliver shares under such options, shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
governmental or regulatory agency as may be required. The Bank shall not be
required to issue or deliver any certificates for shares of Common Stock prior
to the completion of any registration or qualification of such shares under any
federal or state law or issuance of any ruling or regulation of any government
body which the Bank shall, in its sole discretion, determine to be necessary or
advisable. Any adjustments provided for in subparagraphs 6(j), (k) and (l)
shall be subject to any shareholder action required by Texas corporate law
and/or federal law or regulation.

       SECTION 10. Purchase for Investment. Unless the options and shares of
Common Stock covered by this Plan have been registered under the Securities Act
of 1933, as amended, or the Bank has determined that such registration is
unnecessary, each person exercising an option under this Plan may be required by
the Bank to give a representation in writing that he is acquiring such shares

                                       9
<PAGE>

for his own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof.

     SECTION 11. Taxes.

          (a) The Bank may make such provisions as it may deem appropriate for
the withholding of any taxes which it determines is required in connection with
any options granted under this Plan.

          (b) Notwithstanding the terms of Paragraph 11(a), any Optionee may pay
all or any portion of the taxes required to be withheld by the Bank or paid by
him in connection with the exercise of a non-qualified option by electing to
have the Bank withhold shares of Common Stock, or by delivering previously owned
shares of Common Stock, having a fair market value, determined in accordance
with Paragraph 6(b), equal to the amount required to be withheld or paid. An
Optionee must make the foregoing election on or before the date that the amount
of tax to be withheld is determined ("Tax Date"). All such elections are
irrevocable and subject to disapproval by the Committee. Elections by Covered
Optionees are subject to the following additional restrictions: Such election
may not be made within six months of the grant of an option, provided that this
limitation shall not apply in the event of death or disability, and (ii) such
election must be made either six months or more prior to the Tax Date or in a
Window Period. Where the Tax Date in respect of an option is deferred until six
months after exercise and the Covered Optionee elects share withholding, the
full amount of shares of Common Stock will be issued or transferred to him upon
exercise of the option, but he shall be unconditionally obligated to tender back
to the Bank the number of shares necessary to discharge the Bank's withholding
obligation or his estimated tax obligation on the Tax Date.

     SECTION 12.   Replacement of Options. The Committee from time to time may
permit an Optionee under the Plan to surrender for cancellation any unexercised
outstanding option and receive from the Bank in exchange an option for such
number of shares of Common Stock as may be designated by the Committee. The
Committee may, with the consent of the person entitled to exercise any
outstanding option, amend such option, including reducing the exercise price of
any option to not less than the fair market value of the Common Stock at the
time of the amendment and extending the term thereof.

       SECTION 13.  No Right to Bank Employment. Nothing in this Plan or as a
result of any option granted pursuant to this Plan shall confer on any
individual any right to continue in the employ of the Bank or interfere in any
way with the right of the Bank to terminate an individual's employment at any
time. The option agreements may contain such provisions as the Committee may
approve with reference to the effect of approved leaves of absence.

       SECTION 14. Liability of Bank. The Bank and anv Affiliate which is in
existence or hereafter comes into existence shall not be liable to an Optionee
or other persons as to:

            (a)   The Non-Issuance of Shares. The non-issuance or sale of shares
     as to which the Bank has been unable to obtain from any regulatory body
     having jurisdiction the authority

                                       10
<PAGE>

     deemed by the Bank's counsel to be necessary to the lawful issuance and
     sale of any shares hereunder; and

            (b) Tax Consequences. Any tax consequence expected, but not
     realized, by any Optionee or other person due to the exercise of any option
     granted hereunder.

       SECTION 15.   Effectiveness and Exuiration of Plan. The Plan shall be
effective on the date the Board adopts the Plan. If the stockholders of the Bank
fail to approve the Plan within twelve months of the date the Board approved the
Plan, the Plan shall terminate and all options previously granted under the Plan
shall become void and of no effect. The Plan shall expire ten years after the
date the Board approves the Plan and thereafter no option shall be granted
pursuant to the Plan.

       SECTION 16.  Non-Exclusivity of the Plan. Neither the adoption by the
Board nor the submission of the Plan to the stockholders of the Bank for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including without limitation the granting of restricted stock or stock options
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases..

     SECTION 17.  Governing Law. This Plan and any agreements hereunder shall be
interpreted and construed in accordance with the laws of the State of Texas and
applicable federal law.

     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing by directors of the Bank, Citizens National Bank of Texas has caused
these presents to be duly executed in its name and behalf by its proper officers
thereunto duly authorized as of this 3rd day of May 1993.

                              CITIZENS NATIONAL BANK OF TEXAS



ATTEST:                       By:______________________________________
                                  Frank G. Cook
                                  Chairman of the Board
____________________
Secretary

                                       11

<PAGE>

                                                                    Exhibit 10.2


                        CITIZENS NATIONAL BANK OF TEXAS
                             1994 STOCK OPTION PLAN

       SECTION 1. Purpose of the Plan. The purpose of Citizens National Bank of
Texas 1994 Stock Option Plan ("Plan") is to encourage ownership of common stock,
$1.50 par value ("Common Stock"), of Citizens National Bank of Texas, a
national banking association (the "Bank"), by eligible key employees of the Bank
and its Affiliates (as defined below) and to provide increased incentive for
such employees to render services and to exert maximum effort for the business
success of the Bank. In addition, the Bank expects that the Plan will further
strengthen the identification of employees with the stockholders. Certain
options to be granted under this Plan are intended to qualify as Incentive Stock
Options ("ISOs") pursuant to Section 422 of the Internal Revenue Code of 1986,
as amended ("Code"), while other options granted under this Plan will be non-
qualified options which are not intended to qualify as ISOs ("Non-qualified
Options"), either or both as provided in the agreements evidencing the options
as provided in Section 6 hereof. As used in this Plan, the term "Affiliates"
means any parent of the Bank and any subsidiary of the Bank within the meaning
of Code Sections 424(e) and (f), respectively.

     SECTION 2. Administration of the Plan.

     (a)  Composition of Committee. The Plan shall be administered by the
Compensation Committee (the "Committee") designated by the Board of Directors of
the Bank (the "Board"), which shall also designate the Chairman of the
Committee. If the Bank is governed by Rule 16b-3 promulgated by the Securities
and Exchange Commission ("Commission") pursuant to the Securities Exchange Act
of 1934, as amended ("Exchange Act"), no director shall serve as a member of the
Committee unless he is a "disinterested person" within the meaning of such Rule
16b-3, i.e., a director who is not, during the one year prior to service as an
administrator of this Plan, or during such service, granted or awarded options
or stock appreciate rights pursuant to this Plan or any other plan of the Bank
or its Affiliates, except as otherwise permitted by Rule 16b-3. If the Bank is
governed by Rule 16b-3, no member of such Committee shall be eligible to receive
stock options under this Plan or any other plan of the Bank or its Affiliates
while serving on the Committee.

     (b)  Committee Action. The Committee shall hold its meetings at such times
and places as it may determine. A majority of its members shall constitute a
quorum, and all determinations of the Committee shall be made by not less than a
majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be fully as effective as if it had
been made by a majority vote of its members at a meeting duly called and held.
The Committee may designate the Secretary or other Bank employees to assist the
Committee in the administration of the Plan, and may grant authority to such
persons to execute award agreements or other documents on behalf of the
Committee and the Bank. Any duly constituted committee of the Board satisfying
the qualifications of this Section 2 may be appointed as the Committee.

     (c)  Committee Expenses. All expenses and liabilities incurred by the
Committee in the
<PAGE>

administration of the Plan shall be borne by the Bank. The Committee may employ
attorneys, consultants, accountants or other persons.

     SECTION 3. Stock Reserved for the Plan. Subject to adjustment as provided
in Section 6(k) hereof, the aggregate number of shares of Common Stock that may
be optioned under the plan is 30,000 . The shares subject to the Plan shall
consist of authorized but unissued shares of Common Stock and such number of
shares shall be and is hereby reserved for sale for such purpose. Any of such
shares which may remain unsold and which are not subject to outstanding options
at the termination of the Plan shall cease to be reserved for the purpose of the
Plan, but until termination of the Plan or the termination of the last of the
options granted under the Plan, whichever last occurs, the Bank shall at all
times reserve a sufficient number of shares to meet the requirements of the
Plan. Should any option expire or be canceled prior to its exercise in full, the
shares theretofore subject to such option may again be made subject to an option
under the Plan.

     SECTION 4. Eligibility. The persons eligible to participate in the Plan as
a recipient of options ("Optionee") shall include only key employees (including
officers and directors who are also key employees) of the Bank or its Affiliates
at the time the option is granted; provided, however, the members of the
Committee shall not be eligible to be granted options. Directors of the Bank
shall not be eligible to participate in this Plan as directors, but directors
otherwise qualified shall be eligible to participate. An employee who has been
granted an option hereunder may be granted an additional option or options, if
the Committee shall so determine.

     SECTION 5. Grant of Options.

     (a)  Committee Discretion. The Committee shall have discretionary authority
(i) to determine, authorize and designate those key employees of the Bank or its
Affiliates who are to receive options under the Plan, (ii) to determine the
number of shares of Common Stock to be covered by such options and the terms
thereof, and (iii) to determine the type of option granted: ISO, Non-qualified
option or a combination of ISO and Non-qualified Options. The Committee shall
thereupon grant options in accordance with such determinations as evidenced by a
written option agreement. Subject to the express provisions of the Plan, the
Committee shall have discretionary authority to prescribe, amend and rescind
rules and regulations relating to the Plan, to interpret the Plan, to prescribe
and amend the terms of the option agreements (which need not be identical) and
to make all other determinations deemed necessary or advisable for the
administration of the Plan.

     (b)  Stockholder Approval. All options granted under this Plan are subject
to, and may not be exercised before, the approval of this Plan at the Annual
Meeting of Shareholders following the adoption of the Plan by the Board of
Directors, or at a special meeting of shareholders called for that purpose prior
to the first anniversary date of the Board meeting held to approve the Plan, by
the affirmative vote of the holders of a majority of the outstanding shares of
the Bank present, or represented by proxy, and entitled to vote thereat;
provided that if such approval by the shareholders of the Bank at the annual or
special meeting is not forthcoming, all options previously granted under this
Plan shall be void.

                                       2
<PAGE>

       (c)  Limitation on Incentive Stock Options. The aggregate fair market
value (determined in accordance with Section 6(b) of this Plan at the time the
option is granted) of the Common Stock with respect to which ISOs may be
exercisable for the first time by any Optionee during any calendar year under
all such plans of the Bank and its Affiliates shall not exceed $100,000.00.

       SECTION 6. Terms and Conditions. Each option granted under the Plan shall
be evidenced by an agreement, in a form approved by the Committee, which shall
be subject to the following express terms and conditions and to such other terms
and conditions as the Committee may deem appropriate.

      (a)   Option Period. The committee shall promptly notify the Optionee of
the option grant and a written agreement shall promptly be executed and
delivered by and on behalf of the Bank and the Optionee, provided that the
option grant shall expire if a written agreement is not signed by said Optionee
(or his agent or attorney) and returned to the Bank within 60 days from date of
receipt by the Optionee of such agreement. The date of grant shall be the date
the option is actually granted by the Committee, even though the written
agreement may be executed and delivered by the Bank and the Optionee after that
date. Each option agreement shall specify the period for which the option
thereunder is granted (which in no event shall exceed ten years from the date of
grant) and shall provide that the option shall expire at the end of such period.
If the original term of an option is less than ten years from the date of grant,
the option may be amended prior to its expiration, with the approval of the
Committee and the Optionee, to extend the term so that the term as amended is
not more than ten years from the date of grant. However, in the case of an ISO
granted to an individual who, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all classes of stock of
the Bank or its Affiliates ("Ten Percent Stockholder"), such period shall not
exceed five years from the date of grant.

     (b)  Option Price. The purchase price of each share of Common Stock subject
to each option granted pursuant to the Plan shall be determined by the Committee
at the time the option is granted and, in the case of ISOs, shall not be less
than 100% of the fair market value of a share & Common Stock on the date the
option is granted, as determined by the Committee. In the case of an ISO granted
to a Ten Percent Stockholder, the option price shall not be less than 110% of
the fair market value of a share of Common Stock on the date the option is
granted. The purchase price of each share of Common Stock subject to a Non-
qualified Option under this Plan shall be determined by the Committee prior to
granting the option. The Committee shall set the purchase price for each share
subject to a Non-qualified Option at either the fair market value of each share
on the date the option is granted, or at such other price as the Committee in
its sole discretion shall determine.

     For all purposes under the Plan, the fair market value of a share of Common
Stock on a particular date shall be equal to the mean of the reported high and
low sales prices of the Common Stock on the New York Stock Exchange Composite
Tape on that date, or if no prices are reported on that date, on the last
preceding date on which such prices of the Common Stock are so reported. If the
Common Stock is not traded on the New York Stock Exchange at the time a
determination of its fair market value is required to be made hereunder, its
fair market value shall be deemed to be equal to the average between the closing
bid and ask price of the Common Stock on the most recent

                                       3
<PAGE>

date the Common Stock was publicly traded. In the event the Common Stock is not
publicly traded at the time a determination of its value is required to be made
hereunder, the determination of its fair market value shall be made by the
Committee in such manner as it deems appropriate.

     (c)   Exercise Period. The Committee may provide in the option agreement
that an option may be exercised in whole, immediately, or is to be exercisable
in increments. However, no portion of any option may be exercisable by the
Optionee prior to the approval of the Plan by the stockholders of the Bank.

     (d)   Procedure for Exercise. Options shall be exercised by the delivery of
written notice to the Secretary of the Bank setting forth the number of shares
with respect to which the option is being exercised. Such notice shall be
accompanied by cash or cashier's check, bank draft, postal or express money
order payable to the order of the Bank, or at the option of the Optionee, by
Common Stock theretofore owned by such Optionee (or any combination of cash and
Common Stock). The notice shall specify the address to which the certificates
for such shares are to be mailed. An Optionee shall be deemed to be a
stockholder with respect to shares covered by an option on the date the Bank
receive's such written notice and such option payment.

     As promptly as practicable after receipt of such written notification and
payment, the Bank shall deliver to the Optionee certificates for the number of
shares with respect to which such option has been so exercised, issued in the
Optionee's name; provided, however, that such delivery shall be deemed effected
for all purposes when a stock transfer agent of the Bank shall have deposited
such certificates in the United States mail, addressed to the Optionee at the
address specified pursuant to this Section 6 (d).

     (e)  Termination of Employment. If an employee to whom an option is granted
ceases to be employed by the Bank for any reason other than death or disability,
any option which is exercisable on the date of such termination of employment
may be exercised during a three-month period beginning on such date; provided
however, if an Optionee's employment is terminated because of the Optionee's
theft or embezzlement from the Bank, disclosure of trade secrets of the Bank or
the commission of a willful, felonious act while in the employment of the Bank
then any option or unexercised portion thereof granted to said Optionee shall
expire upon such termination of employment.

     (f)  Disability or Death of Optionee. In the event of the determination of
disability or death of an Optionee under the Plan while he is employed by the
Bank, the options previously granted to him may be exercised (to the extent he
would have been entitled to do so at the date of the determination of disability
or death) at any time and from time to time, within a three-month period after
such determination of disability or death, by the former employee, the guardian
of his estate the executor or administrator of his estate or by the person or
persons to whom his rights under the option shall pass by will or the laws of
descent and distribution, but in no event may the option be exercised after its
expiration under the terms of the option agreement. An employee shall be deemed
to be disabled if, in the opinion of a physician selected by the Committee, he
is incapable of performing services for the Bank of the kind he was performing
at the time the disability occurred

                                       4
<PAGE>

by reason of any medically determinable physical or mental impairment which can
be expected to result in death or to be of long, continued and indefinite
duration. The date of determination of disability for purposes hereof shall be
the date of such determination by such physician.

     (g)  Assignability. An option shall not be assignable or otherwise
transferable except by will or by the laws of descent and distribution. During
the lifetime of an Optionee, an option shall be exercisable only by him.

     (h)   Incentive Stock Option. Each option agreement may contain such terms
and provisions as the Committee may determine to be necessary or desirable in
order to qualify an option designated as an incentive stock option.

     (i)  No Rights as Stockholder. No Optionee shall have any rights as a
stockholder with respect to shares covered by an option until the option is
exercised by the written notice and accompanied by payment as provided in clause
(d) above.

       (j)   Extraordinary Corporate Transactions. The existence of outstanding
options shall not effect in any way the right or power of the Bank or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations, exchange or other changes in the Bank's capital structure or
its business, or any merger or consolidation of the Bank, or any issuance of
Common Stock or other securities or subscription rights thereto, or any issuance
of bonds, debentures, preferred or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or the dissolution or liquidation of the
Bank, or any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceeding, whether of a similar character or
otherwise. If the Bank recapitalizes or otherwise changes its capital structure,
or merges consolidates, sells all of its assets or dissolves (each of the
foregoing a "Fundamental Change"), then thereafter upon any exercise of an
option theretofore granted (the Optionee shall be entitled to purchase) under
such option, in lieu of the number of shares of common stock as to which option
shall then be exercisable, the number and class of shares of stock and
securities to which the Optionee would have been entitled pursuant to the terms
of the Fundamental Change if, immediately prior to such Fundamental Change, the
Optionee had been the holder of record of the number of shares of Common Stock
as to which such option is then exercisable. If (i) the Bank shall not be the
surviving entity in any merger or consolidation (or survives only as a
subsidiary of another entity), (ii) the Bank sells all or substantially all of
its assets to any other person or entity (other than a wholly-owned subsidiary),
(iii) any person or entity (including a "group" as contemplated by Section
13(d)(3) of the Exchange Act) acquires or gains ownership or control of
(including, without limitation, power to vote) more than 50% of the outstanding
shares of Common Stock, (iv) the Bank is to be dissolved and liquidated, or (v)
as a result of or in connection with a contested election of directors, the
persons who were directors of the Bank before such election shall cease to
constitute a majority of the Board (each such event in clauses (i) through (v)
above is referred to herein as a "Corporate Change"), the Committee, in its sole
discretion, may accelerate the time at which all or a portion of an Optionee's
Options may be exercised for a limited period of time before or after a
specified date.

       (k)   Changes in Bank's Capital Structure. If the outstanding shares of
Common Stock or

                                       5
<PAGE>

other securities of the Bank, or both, for which the option is then exercisable
shall at any time be changed or exchanged by declaration of a stock dividend,
stock split, combination of shares, recapitalization, or reorganization, the
number and kind of shares of Common Stock or other securities which are subject
to the Plan or subject to any options theretofore granted and the option prices,
shall be appropriately and equitably adjusted so as to maintain the
proportionate number of shares or other securities without changing the
aggregate option price.

       (l)  Acceleration of Options. Except as hereinbefore expressly provided,
(i) the issuance by the Bank of shares of stock of any class of securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Bank convertible
into such shares or other securities, (ii) the payment of a dividend in property
other than common stock or (iii) the occurrence of any similar transaction, and
in any case whether or not for fair value, shall not affect, and no adjustment
by reason thereof shall be made with respect to, the number of shares of Common
Stock subject to options theretofore granted or the purchase price per share,
unless the Committee shall determine in its sole discretion than an adjustment
is necessary to provide equitable treatment to Optionee. Notwithstanding
anything to the contrary contained in this Plan, the Committee may in its sole
discretion accelerate the time at which any option may be exercised, including,
but not limited to, upon the occurrence of the events specified in this Section
6, and is authorized at any time (with the consent of the Optionee) to purchase
options pursuant to Section 7.

     (m)  Stockholders Agreement. The Committee shall provide in the option
agreement that prior to receiving any shares of Common Stock or other securities
on the exercise of the option, the Optionee (or the Optionee's representative
upon the Optionee's death) shall be required to execute the Bank's Stockholder
Agreement.

SECTION 7. Relinquishment of Options.

     (a)  The Committee, in granting options hereunder, shall have discretion to
determine whether or not options shall include a right of relinquishment as
hereinafter provided by this Section 7. The Committee shall also have discretion
to determine whether an option agreement evidencing an option initially granted
by the Committee without a right of relinquishment shall be amended or
supplemented to include such a right of relinquishment. Neither the committee
nor the Bank shall be under any obligation or incur any liability to any person
by reason of the Committee's refusal to grant or include a right of
relinquishment in any option granted hereunder or in any option agreement
evidencing the same. Subject to the Committee's determination in any case that
the grant by it of a right of relinquishment is consistent with Paragraph 1
hereof, any option granted under this plan, and the option agreement evidencing
such option, may provide:

          (i)  That the Optionee, or his heirs or other legal representatives to
     the extent entitled to exercise the option under the terms thereof in lieu
     of purchasing the entire number of shares subject to purchase thereunder,
     shall have the right to relinquish all or any part of the then unexercised
     portion of the option (to the extent then exercisable) for a number of
     shares

                                       6
<PAGE>

     of Common Stock, for an amount of cash or for a combination of Common Stock
     and cash to be determined in accordance with the following provisions of
     this clause(i):

     (a)   The written notice of exercise of such right in relinquishment shall
state the percentage, if any, of the Appreciated Value (as defined below) that
the Optionee elects to receive in cash ("Cash Percentage"), such cash percentage
to be in increments of 10% of such Appreciated Value up to 100% thereof;

     (b)  The number of shares of Common Stock, if any, issuable pursuant to
such relinquishment shall be the number of such shares, rounded to the next
greater number of full shares, as shall be equal to the quotient obtained by
dividing (A) the difference between (1) the Appreciated Value and (11) the
result obtained by multiplying the Appreciated Value and the Cash Percentage by
(B) the then current market value per share of Common Stock;

     (c)  The amount of cash payable pursuant to such relinquishment shall be an
amount equal to the Appreciated Value less the aggregate current market value of
the Common Stock issued pursuant to such relinquishment, if any, which cash
shall be paid by the Bank subject to such conditions as are deemed advisable by
the committee to permit compliance by the Bank with the withholding provisions
applicable to employers under the Code and any applicable state income tax laws;

     (d)  For the purpose of this clause (i), "Appreciated Value" means the
excess of (x) the aggregate current market value of the share of Common Stock
covered by the option or the portion thereof to be relinquished over (y) the
aggregate purchase price for such shares specified in such option;

          (ii)  That such right of relinquishment may be exercised only upon
     receipt by the Bank of a written notice of such relinquishment which shall
     be dated the date of election to make such relinquishment; and that, for
     the purposes of this plan, such date of election shall be deemed to be the
     date when such notice is sent by registered or certified mail, or when
     receipt is acknowledged by the Bank, if mailed by other than registered or
     certified mail or if delivered by hand or by any telegraphic communications
     equipment of the sender or otherwise delivered-, provided, that in the
     event the method just described for determining such date of election shall
     not be or remain consistent with the provisions of Section 16(b) of the
     Exchange Act or the rules and regulations adopted by the Commission
     thereunder, as presently existing or as may be hereafter amended, which
     regulations exempt from the operation of Section 16(b) of the Exchange Act
     in whole or in part any such relinquishment transaction, then such date of
     election shall be determined by such other method consistent with Section
     16(b) of the Exchange Act or the rules and regulations thereunder as the
     Committee shall in its discretion select and apply;

          (iii)  That the "current market value" of a share of Common Stock on a
     particular date shall be deemed to be its fair market value on that date as
     determined in accordance with Paragraph 6(b); and

                                       7
<PAGE>

          (iv)  That the option, or any portion thereof, may be relinquished
     only to the extend that (A) it is exercisable on the date written notice of
     relinquishment is received by the Bank, (B) the Committee, subject to the
     provisions of Paragraph 7(b), shall consent to the election of the holder
     to relinquish such option in whole or in part for cash as set forth in such
     written notice of relinquishment and (C) the holder of such option pays or
     makes provision satisfactory to the Bank of the payment of, any taxes which
     the Bank is obligated to collect with respect to such relinquishment.

     (b)  The Committee shall have sole discretion to consent to or disapprove,
and neither the Committee nor the Bank shall be under any liability by reason of
the Committee's disapproval of, any election by a holder of an option to
relinquish such option in whole or in part for cash as provided in paragraph
7(a), except that no such consent to or approval of a relinquishment for cash
shall be required under the following circumstances. Each Optionee who is
subject to the short-swing profit recapture provisions of Section 16 (b) of the
Exchange Act ("Covered Optionee") shall be entitled to receive payment only in
cash when options are relinquished during any window period commencing on the
third business day following the Bank's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth business day following
such release ("Window Period"); provided, however, that payment shall be so
made in cash only in respect of 50% of the options covered by an stock option
agreement. A covered Optionee shall be entitled to receive payment only in
shares of common stock upon (a) the relinquishment of options outside a Window
Period and (b) the relinquishment of options during a Window Period once such
Optionee has received payment in cash for the relinquishment of 50% of the
options covered by any stock option agreement.

     (c)  The Committee, in granting options hereunder, shall have discretion to
determine the terms upon which such options shall be relinquishable, subject to
the applicable provision of this Plan, and including such provisions as are
deemed advisable to permit the exemption from the operation from Section 16(b)
of the Exchange Act of any such relinquishment transaction, and options
outstanding, and option agreements evidencing such options, may be amended, if
necessary to permit such exemption. If an option is relinquished, such option
shall be deemed to have been exercised to the extent of the number of shares of
Common Stock covered by the option or part thereof which is relinquished, and no
further options may be granted covering such shares of Common Stock.

     (d)  Neither any option nor any right to relinquish the same to the Bank as
contemplated by this Paragraph 7 shall be assignable or otherwise transferable
except by will or the laws of decent and distribution.

     (e)  No right of relinquishment may be exercised within the first six
months after the initial award of any option containing, or the amendment or
supplementation of any existing option agreement adding, the right of
relinquishment; provided, however, that this limitation shall not apply in the
event of death or disability.

     SECTION 8. Amendments or Termination. The Board may amend, alter or
discontinue the

                                       8
<PAGE>

Plan, but no amendment or alteration shall be made which would impair the rights
of any Optionee, without his consent, under any option theretofore granted, or
which, without the approval of the stockholders, would: (i) except as is
provided in Section 6(k) of the Plan, increase the total number of shares
reserved for the purposes of the Plan, (ii) change the class of persons eligible
to participate in the Plan as provided in Section 4 of the Plan, (iii) extend
the applicable maximum option period provided for in Section 6(a) of the Plan,
(iv) extend the expiration date of this Plan set forth in Section 14 of the
Plan, (v) except as provided in Section 6(k) of the Plan, decrease to any extent
the option price of any option granted under the Plan or (vi) withdraw the
administration of the Plan from the Committee.

       SECTION 9. Compliance With Other Laws and Regulations. The Plan, the
grant and exercise of options thereunder, and the obligation of the Bank to sell
and deliver shares under such options, shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
governmental or regulatory agency as may be required. The Bank shall not be
required to issue or deliver any certificates for shares of Common Stock prior
to the completion of any registration or qualification of such shares under any
federal or state law or issuance of any ruling or regulation of any government
body which the Bank shall, in it sole discretion, determine to be necessary or
advisable. Any adjustments provided for in subparagraphs 60), (k) and (1) shall
be subject to any shareholder action required by Texas corporate law and/or
federal law or regulation.

     SECTION 10. Purchase for Investment. Unless the options and shares of
Common Stock covered by this Plan have been registered under the Securities Act
of 1933, as amended, or the Bank has determined that such registration is
unnecessary, each person exercising an option under this Plan may be required by
the Bank to give a representation in writing that he is acquiring such shares
for his own account for investment and not with a view !o, or for sale in
connection with, the distribution of any part thereof.

     SECTION 11. Taxes.

     (a)  The Bank may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with any
options granted under this Plan.

     (b)  Notwithstanding the terms of Paragraph 11(a), any Optionee may pay
all or any portion of the taxes required to be withheld by the Bank or paid by
him in connection with the exercise of a non-qualified option by electing to
have the Bank withhold shares of Common Stock, or by delivering previously owned
shares of Common Stock, having a fair market value, determined in accordance
with Paragraph 6(b), equal to the amount required to be withheld or paid. An
Optionee must make the foregoing election on or before the date that the amount
of tax to be withheld is determined ("Tax Date"). All such elections are
irrevocable and subject to disapproval by the Committee. Elections by covered
Optionees are subject to the following additional restrictions: (i) such
election may not be made within six months of the grant of any option, provided
that this limitation shall not apply in the event of death or disability, and
(ii) such election must be made either six months or more prior to the Tax Date
or in a Window Period. Where the Tax Date in respect of an option is deferred
until six months after exercise and the covered Optionee elects share

                                       9
<PAGE>

withholding, the full amount of shares of Common Stock will be issued or
transferred to him upon exercise of the option, but he shall be unconditionally
obligated to tender back to the Bank the number of shares necessary to discharge
the Bank's withholding obligation of his estimated tax obligation on the Tax
Date.

       SECTION 12. Replacement of Options. The Committee from time to time may
permit an Optionee under the Plan to surrender for cancellation any unexercised
outstanding option and receive from the Bank in exchange an option for such
number of shares of Common Stock as may be designated by the Committee. The
Committee may, with the consent of the person entitled to exercise any
outstanding option, amend such option, including reducing the exercise price of
any option to not less than the fair market value of the Common Stock at the
time of the amendment and extending the term thereof.

       SECTION 13. No Right to Bank Employment. Nothing in this Plan or as a
result of any option granted pursuant to this Plan shall confer on any
individual any right to continue in the employ of the Bank or interfere in any
way with the right of the Bank to terminate an individual's employment at any
time. The option agreements may contain such provisions as the Committee may
approve with reference to the effect of approved leaves of absence.

     SECTION 14. Liability of Bank. The Bank and any Affiliate which is in
existence or hereafter comes into existence shall not be liable to an Optionee
or other persons as to:

     (a)  The Non-issuance of Shares. The non-issuance or sale of shares as to
which the Bank has been unable to obtain from any regulatory body having
jurisdiction the authority deemed by the Bank's counsel to be necessary to the
lawful issuance and sale of any shares hereunder; and

     (b)  Tax Consequences. Any tax consequence expected, but not realized, by
any Optionee or other person due to the exercise of any option granted
hereunder.

       SECTION 15.  Effectiveness and Expiration of Plan. The Plan shall be
effective on the date the Board adopts the Plan. If the stockholders of the Bank
fail to approve the Plan within twelve months of the date the Board approved the
Plan, the Plan shall terminate and all options previously granted under the Plan
shall become void and of no effect. The Plan shall expire ten years after the
date the Board approves the Plan and thereafter no option shall be granted
pursuant to the Plan.

     SECTION 16.  Non-Exclusivity of  the Plan. Neither the adoption by the
Board nor the submission of the Plan to the stockholders of the Bank for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including without limitation, the granting of restricted stock or stock options
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.

     SECTION 17.  Governing Law. This Plan and any agreements hereunder shall be
interpreted and construed in accordance with the laws of the State of Texas and
applicable federal law.

                                       10
<PAGE>

     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing by directors of the Bank, Citizens National Bank of Texas has caused
these presents to be duly executed in its name and behalf by its proper officers
thereunto duly authorized as of this ___ day of ________, 1994.

                              CITIZENS NATIONAL BANK OF TEXAS



                              By:___________________________________
                                    Frank G. Cook
                                    Chairman of the Board

ATTEST:

_____________________
Secretary


______________________

                                       11

<PAGE>

                                                                    Exhibit 10.3


                                   FORM OF

                        CITIZENS NATIONAL BANK OF TEXAS
                        INCENTIVE STOCK OPTION AGREEMENT

     This Incentive Stock Option Agreement ("Option Agreement") is between
Citizens National Bank of Texas, a national banking association (the "Bank"),
and ______________ (the "Optionee").

                                  WITNESSETH:

     WHEREAS, the Bank has heretofore adopted the Citizens National Bank of
Texas 199__ Stock Option Plan (the "Plan") for the purpose of providing
employees of the Bank with additional incentive to promote the success of the
business, to increase their proprietary interest in the success of the Bank, and
to encourage them to remain in its employ; and

     WHEREAS, the Bank, acting through the Compensation Committee of its Board
of Directors (the "Committee"), has determined that its interests will be
advanced by the issuance to Optionee of an incentive stock option under the
Plan;

     NOW THEREFORE, for and in consideration of these premises it is agreed as
follows:

     1.   Option.  Subject to the terms and conditions contained herein, the
Bank hereby irrevocably grants to Optionee the right and option ("Option") to
purchase from the Bank five thousand shares of the Bank's common stock, $___ par
value ("Common Stock"), at a price of $__.00 per share, which is deemed to be
not less that the fair market value of the Common Stock at the date of grant of
this Option.

     2.   Option Period.  The option herein granted may be exercised by Optionee
in whole or in part at any time during a ten year period, which period shall in
no event exceed a ten (10) year period beginning on the date of this Option
Agreement (the "Option Period"), subject to the limitation that said Option
shall not be exercisable for more that a percentage of the aggregate number of
shares offered by this Option determined by the number of full years of
employment with the Bank or a subsidiary from the effective date of the
Optionee's grant, to the date of such exercise, in accordance with the following
schedule:

     After three years can exercise twenty percent, if still employed by
     Citizens National Bank of Texas.
     After four years can exercise twenty percent more, if still employed by
     Citizens National Bank of Texas.
     After five years can exercise twenty percent more if still employed by
     Citizens National Bank of Texas.

199_ Stock Option                      1
<PAGE>

     After six years can exercise all, if still employed by Citizens National
     Bank of Texas.

Notwithstanding anything in this Option Agreement to the contrary, the
Committee, in its sole discretion may waive the foregoing schedule of vesting
and upon written notice to the Optionee, accelerate the earliest date or dates
on which any of the Options granted hereunder are exercisable.

     3.   Procedure for Exercise.  The Option herein granted may be exercised by
written notice by Optionee to the Secretary of the Bank setting forth the number
of shares of Common Stock with respect to which the Option is to be exercised
accompanied by payment for the shares to be purchased, and specifying the
address to which the certificate for such shares is to be mailed. Payment shall
be by means of cash, or cashier's check, bank draft, postal or express money
order payable to the order of the Bank, or at the option of the Optionee, in
Common Stock theretofore owned by such Optionee (or a combination of cash and
Common Stock). As promptly as practicable after receipt of such written
notification and payment, the Bank shall deliver to Optionee certificates for
the number of shares of Common Stock with respect to which such Option has been
so exercised.

       4. Termination of Employment.  If Optionee's employment with the Bank is
terminated during the Option Period for any reason other than death or
disability, options granted to him which are not exercisable on such date
thereupon terminate. Any options which are exercisable on the date of his
termination of employment may be exercised by Optionee during a three month
period beginning on such date; provided however, if an Optionee's employment is
terminated because of the Optionee's theft or embezzlement from the Bank,
disclosure of trade secrets of the Bank or the commission of a willful,
felonious act while in the employment of the Bank, then any option or
unexercised portion thereof granted to said Optionee shall expire upon such
termination of employment.

     5.   Disability or Death.  If Optionee's employment with the bank is
terminated by his disability or death, all options hereunder exercisable at the
date of such disability or death shall be thereafter exercisable by Optionee,
his executor or administrator, or the person or persons to whom his rights under
this Option Agreement shall pass by will or by the laws of descent and
distribution, as the case may be, for a period of three months from the date of
Optionee's disability or death, unless this Option Agreement should earlier
terminate in accordance with its other terms. In no event may any option be
exercised after the end of the Option Period. Optionee shall be deemed to be
disabled if, in the opinion of a physician selected by the Committee, he is
incapable of performing services for the Bank by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or to be of long, continued and indefinite duration.

     6.   Transferability.  This option shall not be transferable by Optionee
otherwise than by Optionee's will or by the laws of descent and distribution.
During the lifetime of Optionee, the Option shall be exercisable only by him.
Any heir or legatee of Optionee shall

199_ Stock Option                      2
<PAGE>

take rights herein granted subject to the terms and conditions hereof. No such
transfer of this Option Agreement to heirs or legatees of Optionee shall be
effective to bind the Bank unless the Bank shall have been furnished
with'written notice thereof and a copy of such evidence as the Committee may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions hereof.

     7.   No Rights as Stockholder.  Optionee shall have no rights as a
stockholder with respect to any shares of Common Stock covered by this Option
Agreement until the date of issuance of a certificate for shares of Common Stock
purchased pursuant to this Option Agreement. Until such time, Optionee shall not
be entitled to dividends or to vote at meetings of the stockholders of the Bank.
Except as provided in paragraph 9 hereof, no adjustment shall be made for
dividend (ordinary or extraordinary, whether in cash or securities or other
property) paid or distributions or other rights granted in respect of any share
of Common Stock for which the record date for such payment, distribution or
grant is prior to the date upon which the Optionee shall have been issued share
certificates, as provided hereinabove.

     8.   Extraordinary Corporate Transactions.  The existence of outstanding
Options shall not affect in any way the right or power of the Bank or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Bank's capital structure or its
business, or any merger or consolidation of the Bank, or any issuance of Common
Stock or subscription rights thereto, or any issuance of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Common Stock or
the rights thereof, or the dissolution or liquidation of the Bank, or any sale
or transfer of all or any part of its assets or business, or any other corporate
act or proceedings, whether of a similar character or otherwise. If the Bank
recapitalizes or otherwise changes its capital structure, or merges,
consolidates, sells all of its assets or dissolves (each of the foregoing a
"Fundamental Change"), then thereafter upon any exercise of any option
theretofore granted the Optionee shall be entitled to purchase under such
option, in lieu of the number of shares of Common Stock as to which option shall
then be exercisable, the number and class of shares of stock and securities to
which the Optionee would have been entitled pursuant to the terms of the
Fundamental Change if, immediately prior to such Fundamental Change, the
Optionee had been the holder of record of the number of shares of Common Stock
as to which such option is then exercisable. If the Bank shall not be the
surviving entity upon the occurrence of a Fundamental Change, the Options
granted hereunder shall be governed by subparagraph 6(j) of the Plan.

       9. Change in Capital Structure.  If the outstanding shares of Common
Stock of the Bank shall at any time be changed or exchanged by declaration of
a stock dividend, stock split, combination of shares, or recapitalization, the
number and kind of shares subject to the Plan or subject to any options
theretofore granted, and the Option prices, shall be appropriately and equitable
adjusted so as to maintain the proportionate number of shares without changing
the aggregate Option price.

199_ Stock Option                      3
<PAGE>

       10.  Compliance with Securities Laws.  Upon the acquisition of any shares
pursuant to the exercise of the Option herein granted, Optionee (or any person
acting under paragraph 6) will enter into such written representations,
warranties and agreements as the Bank may reasonably request in order to comply
with applicable securities laws or with this Option Agreement.

       11.  Compliance With Laws.  Notwithstanding any of the other provisions
hereof, Optionee agrees that he will not exercise the Option(s) granted hereby,
and that the Bank will not be obligated to issue any shares pursuant to this
Option Agreement, if the exercise of the Option(s) or the issuance of such
shares of Common Stock would constitute a violation by the Optionee or by the
Bank of any provision of any law or regulation of any governmental authority.

     12.  Resolution of Disputes.  As a condition of the granting of the Option
hereby, the Optionee and his heirs and successors agree that any dispute or
disagreement which may arise hereunder shall be determined by the Committee in
its sole discretion and judgment, and that any such determination and any
interpretation by the Committee of the terms of this Option Agreement shall be
final and shall be binding and conclusive, for all purposes, upon the Bank,
Optionee, his heirs and personal representatives.

     13.  Stockholder Agreement.  Optionee, or the Optionee's representative
upon the Optionee's death, prior to the exercise of an option granted hereunder,
agrees to enter into the Bank's Stockholders Agreement.

     14.  Legends on Certificate.  The certificate representing the shares of
Common Stock purchased by exercise of any Option will be stamped or otherwise
imprinted with legends in such form as the Bank or its counsel may require with
respect to any applicable restrictions on sale or transfer and the stock
transfer records of the Bank will reflect stop-transfer instructions with
respect to such shares.

     15.  Notices.  Every notice hereunder shall be in writing and shall be
given by registered or certified mail. All notices of the exercise of any Option
hereunder shall be directed to Citizens National Bank of Texas, P. O. Box 20,
Bellaire, Texas 77402, Attention: Secretary. Any notice given by the Bank to
Optionee directed to him at his address on file with the Bank shall be effective
to bind him and any other person who shall acquire rights hereunder. The Bank
shall be under no obligation whatsoever to advise Optionee of the existence,
maturity or termination' of any of Optionee's rights hereunder and Optionee
shall be deemed to have familiarized himself with all matters contained herein
and in the Plan which may affect any of Optionee's rights or privileges
hereunder.

     16.  Construction and Interpretation.  Whenever the term "Optionee" is used
herein under circumstances applicable to any other person or persons to whom
this award, in accordance with the provisions of paragraph 6 hereof, may be
transferred, the word

199_ Stock Option                      4
<PAGE>

"Optionee" shall be deemed to include such person or persons. References to the
masculine gender herein also include the feminine gender for all purposes.

     17.  Notice of Disposition.  If Optionee disposes of any shares of Common
Stock acquired pursuant to the exercise of an Option granted hereunder prior to
the earlier of (i) two years from the date of this Option Agreement of (ii) one
year from the date the shares of Common Stock were acquired, Optionee shall
notify the Bank of such disposition within ten days of its occurrence and
deliver to the Bank any amount of federal or state income tax withholdings
required by law. Payment of the withholding shall be made in accordance with
Section 11 of the Plan. If the Optionee fails to pay the withholding tax, the
Bank is authorized to withhold from any cash remuneration then or thereafter
payable to the Optionee any tax required to be withheld by reason of any
disposition named herein.

     18.  Agreement Subject to Plan. This Option Agreement is subject to the
Plan. The terms and provisions of the Plan (including any subsequent amendments
thereto) are hereby incorporated herein by reference thereto. In the event of a
conflict between any term or provision contained herein and a term or provision
of the Plan, the applicable terms and provisions of the Plan will govern and
prevail. All definitions of words and terms contained in the Plan shall be
applicable to this Option Agreement.

     19.  Employment Relationship.  Employees shall be considered to be in the
employment of the Bank as long as they remain employees of the Bank or a parent
or subsidiary corporation (as defined in Section 425 of the Internal Revenue
Code of 1986, as amended). Any questions as to whether and when there has been a
termination of such employment and the cause of such termination, shall be
determined by the Committee, and its determination shall be final.

     20.  Binding Effect.  This Option Agreement shall be binding upon and inure
to the benefit of any successors to the Bank and all persons lawfully claiming
under Optionee.

     IN WITNESS WHEREOF, this Option Agreement has been executed as of the
_________ day of  ___________, 199__.

                              CITIZENS NATIONAL BANK OF TEXAS


                              By:_________________________________
ATTEST:

Secretary

OPTIONEE:

_____________________________

199_ Stock Option                      5

<PAGE>

                                                                    EXHIBIT 23.1


                      CONSENT OF INDEPENDENT ACCOUNTANTS

     As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 5,
1999, included in CNBT Bancshares, Inc.'s Annual Report on Form 10-K as of and
for the year ended December 31, 1998, and all references to our Firm included in
this registration statement.

                                    Mann Frankfort Stein & Lipp, P.C.



Houston, Texas
July 20, 1999


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