AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 6, 1998
REGISTRATION NO. 333-49317
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
Post-Effective Amendment No. 1
on
FORM S-3
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
CULLEN/FROST BANKERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 6712 74-1751768
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) DENTIFICATION NO.)
100 WEST HOUSTON STREET
SAN ANTONIO, TEXAS 78205
(210) 220-4011
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------------------------------
PHILLIP D. GREEN
SENIOR EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
CULLEN/FROST BANKERS, INC.
100 WEST HOUSTON STREET
SAN ANTONIO, TEXAS 78205
(210) 220-4011
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
MARK J. MENTING
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THE POST-EFFECTIVE
AMENDMENT IN LIGHT OF MARKET CONDITIONS AND OTHER FACTORS.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE
OFFERED ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE
SECURITIES ACT OF 1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH
DIVIDEND OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE
462(C) UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES
ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION
STATEMENT FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE
434, PLEASE CHECK THE FOLLOWING BOX. [ ]
------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE FFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) OPER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE(2)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per
share(3).................................. 12,000 $48.82 $585,840 $170
- -------------------------------------------------------------------------------------------------------------------
<FN>
(1) REPRESENTS THE ESTIMATED MAXIMUM NUMBER OF SHARES OF COMMON STOCK, PAR
VALUE $0.01 PER SHARE, WHICH MAY BE SOLD BY THE SELLING SHAREHOLDER.
(2) THE REGISTRATION FEE WAS PREVIOUSLY PAID AND, PURSUANT TO RULE 457(F)(2),
WAS BASED ON THE BOOK VALUE OF THE OVERTON BANCSHARES, INC. COMMON STOCK,
PAR VALUE $4.00 PER SHARE, CONVERTIBLE INTO SHARES OF COMMON STOCK IN
CONNECTION WITH THE MERGER OF OVERTON BANCSHARES, INC. WITH AND INTO
CULLEN/FROST BANKERS, INC.
(3) INCLUDES ASSOCIATED PREFERRED SHARES PURCHASE RIGHTS. PRIOR TO THE
OCCURRENCE OF CERTAIN EVENTS, SUCH RIGHTS WILL NOT BE EVIDENCED OR TRADED
SEPARATELY FROM THE COMMON STOCK.
===================================================================================================================
</FN>
</TABLE>
<PAGE>
PROSPECTUS
12,000 SHARES
CULLEN/FROST
BANKERS, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
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This prospectus relates to 12,000 shares (the "Shares") of common
stock, $0.01 par value per share, (the "Common Stock") of Cullen/Frost Bankers,
Inc. ("Cullen/Frost") beneficially owned by the stockholder named herein under
"Selling Stockholder". The Selling Stockholder (as hereinafter defined) has
advised Cullen/Frost that it proposes to offer the Shares, from time to time,
through brokers in brokerage transactions on the New York Stock Exchange
("NYSE"), to underwriters , dealers or others in negotiated transactions or in a
combination of such methods of sale, at fixed prices which may be changed at
market prices prevailing at the time of sale, at fixed prices which related to
such prevailing market prices or at negotiated prices. Brokers, dealers and
underwriters that participate in the distribution of the Shares may be deemed to
be underwriters under the Securities Act of 1933 (as amended, and together with
the rules and regulations thereunder , the "Securities Act"), and any discounts
or commissions received by them from the Selling Stockholder and any profit on
the resale of Shares by them may be deemed to be underwriting discounts and
commissions under the Securities Act. The Selling Stockholder may be deemed to
be an underwriter under the Securities Act.
Cullen/Frost will not directly receive any proceeds from the sales
hereunder of the Shares but will bear certain of the expenses thereof. The
Selling Stockholder plans to use the proceeds from sales hereunder to repay the
principal of and accrued interest on a loan contracted in 1996 from Frost
National Bank, a subsidiary of Cullen/Frost. The Selling Stockholder will pay
all applicable stock transfer taxes, brokerage commissions, underwriting
discounts or commissions and the fees of the Selling Stockholder's counsel, but
Cullen/Frost will bear all other expenses in connection with the offering made
hereunder.
The Common Stock is listed on the NYSE under the symbol "CFR."
- - - - - - - - - - - - - - - - - -
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- - - - - - - - - - - - - - - - -
THE SHARES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A
BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
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The date of this Prospectus is August 6, 1998.
<PAGE>
AVAILABLE INFORMATION
Cullen/Frost is subject to the reporting and informational requirements
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act"), and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information filed by Cullen/Frost with the
Commission may be inspected and copied at the principal office of the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and may be inspected at the Commission's Regional Offices at 7 World Trade
Center, New York, New York 10048, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Certain of such
reports, Prospectus and other information are also available from the Commission
over the Internet at http://www.sec.gov. In addition, Cullen/Frost Common Stock
is traded on the NYSE. Reports, the Prospectus, and other information concerning
Cullen/Frost may be inspected at the offices of the NYSE, 20 Broad Street, New
York, New York 10005.
This Prospectus does not contain all of the information set forth in
the Registration Statement on Form S-3, of which this Prospectus is a part, and
the exhibits thereto (together with any amendments thereto, the "Registration
Statement"), which has been filed by Cullen/Frost with the Commission under the
Securities Act. Certain portions of the Registration Statement have been omitted
pursuant to the rules and regulations of the Commission and reference to such
portions is hereby made for further information.
All information contained herein with respect to Cullen/Frost and its
subsidiaries has been supplied by Cullen/Frost, and all information with respect
to the Selling Stockholder has been supplied by the Selling Stockholder.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY CULLEN/FROST OR THE SELLING STOCKHOLDER. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES TO WHICH THIS
PROSPECTUS RELATES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CULLEN/FROST OR ANY OF IT
SUBSIDIARIES SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO PURCHASE THE SECURITIES OFFERED BY THIS PROSPECTUS
IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT LAWFUL.
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<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by Cullen/Frost with the Commission (File
No. 0-7275) under Section 13(a) or 15(d) of the Exchange Act are hereby
incorporated by reference in this Prospectus: Cullen/Frost's Annual Report on
Form 10-K as of and for the year ended December 31, 1997, as amended by the
Reports on Form 10-K/A dated April 30, 1998 and June 29, 1998, respectively
(together, the "1997 Cullen/Frost 10-K"); the portions of Cullen/Frost's Proxy
Statement for the Annual Meeting of Shareholders held on May 27, 1998 (the "1998
Cullen/Frost Proxy Statement") that have been incorporated by reference in the
1997 Cullen/Frost 10-K; Cullen/Frost Report on Form 10-Q as of and for the
quarter ended March 31,1998; the description of Cullen/Frost Common Stock set
forth in Cullen/Frost's Registration Statement on Form 8-A filed pursuant to
Section 12 of the Exchange Act, and any amendment or report filed for the
purpose of updating any such description; the description of preferred share
purchase rights set forth in Cullen/Frost's Registration Statement on Form 8-A
filed pursuant to Section 12 of the Exchange Act, and any amendments or reports
filed for the purpose of updating any such description; and Cullen/Frost's
Current Reports on Form 8-K, dated February 15, 1998, relating to the proposed
merger of Overton Bancshares, Inc. ("Overton") with and into Cullen/Frost, April
21, 1998, relating to first quarter earnings of Cullen/Frost, and August 6,
1998, disclosing as a subsequent event in Cullen/Frost's financial statements
for the year ended December 31, 1997 the completion on May 29, 1998 of the
merger of Overton with and into Cullen/Frost (the "Merger") and related
supplemental information.
All documents filed by Cullen/Frost pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Shares are hereby incorporated
by reference in this Prospectus and shall be deemed a part hereof from the date
of filing of such document.
Any statement contained herein, in any supplement hereto or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of the Registration Statement
and this Prospectus to the extent that a statement contained herein, in any
supplement hereto 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 the Registration
Statement, this Prospectus, or any supplement hereto.
THIS PROSPECTUS INCORPORATES BY REFERENCE CERTAIN DOCUMENTS RELATING TO
CULLEN/FROST THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS
ARE AVAILABLE WITHOUT CHARGE UPON REQUEST FROM: CULLEN/FROST BANKERS, INC., 100
WEST HOUSTON STREET, SAN ANTONIO, TEXAS 78205, (210) 220-4011, ATTENTION:
INVESTOR RELATIONS.
THIS PROSPECTUS CONTAINS OR INCORPORATES BY REFERENCE CERTAIN
FORWARD-LOOKING STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF
OPERATIONS AND BUSINESS OF CULLEN/FROST AS WELL AS CERTAIN INFORMATION RELATING
TO CULLEN/FROST'S RECENT ACQUISITION OF OVERTON, INCLUDING STATEMENTS RELATING
TO: (I) THE COST SAVINGS THAT WILL BE REALIZED FROM THE OVERTON ACQUISITION;
(II) THE IMPACT OF THE OVERTON ACQUISITION ON REVENUES, INCLUDING THE POTENTIAL
FOR ENHANCED REVENUES AND OTHER OPERATIONS AS PLANNED; AND (III) THE
RESTRUCTURING CHARGES EXPECTED TO BE INCURRED IN CONNECTION WITH THE OVERTON
ACQUISITION. THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE CONTEMPLATED BY SUCH FORWARD
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<PAGE>
LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING: (I) EXPECTED COST
SAVINGS FROM THE OVERTON ACQUISITION CANNOT BE FULLY REALIZED OR REALIZED WITHIN
THE EXPECTED TIME FRAME; (II) COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION
OF THE BUSINESSES OF CULLEN/FROST AND OVERTON ARE GREATER THAN EXPECTED; (III)
REVENUES FOLLOWING THE OVERTON ACQUISITION ARE LOWER THAN EXPECTED; (IV)
COMPETITIVE PRESSURE AMONG DEPOSITORY INSTITUTIONS INCREASES SIGNIFICANTLY; (v)
CHANGES IN THE INTEREST RATE ENVIRONMENT REDUCE INTEREST MARGINS; (vi) GENERAL
ECONOMIC CONDITIONS, EITHER NATIONALLY OR IN TEXAS, WHERE THE COMBINED COMPANY
WILL BE DOING BUSINESS, ARE LESS FAVORABLE THAN EXPECTED; OR (vii) LEGISLATION
OR REGULATORY CHANGES ADVERSELY AFFECT THE BUSINESSES IN WHICH THE COMBINED
COMPANY WOULD BE ENGAGED.
CULLEN/FROST
GENERAL
Financial and other information relating to Cullen/Frost, including
information relating to Cullen/Frost directors and executive officers, is
contained or incorporated in the 1997 Cullen/Frost 10-K, 1998 Cullen/Frost First
Quarter 10-Q, and 1998 Current Reports on form 8-K, copies of which may be
obtained from Cullen/Frost as indicated under "Available Information". See also
"Incorporation Of Certain Documents By Reference".
CULLEN/FROST
General. Cullen/Frost is a Texas corporation and a registered bank
holding company within the meaning of the Bank Holding Company Act of 1956 ("the
BHC Act"). Cullen/Frost's principal assets consist of the capital stock of two
national banks. The larger of the banks is Frost Bank that was chartered as a
national banking association in 1899.
Currently, Cullen/Frost has 76 offices across Texas with 19 locations
in San Antonio, 22 in the Houston-Galveston area, 14 in the Fort Worth/Dallas
area, five in Austin, 10 in the Corpus Christi area, three in San Marcos, two in
McAllen and one in New Braunfels. For the year ended December 31, 1997,
Cullen/Frost reported net income of $63.5 million, or $2.75 per diluted share,
as compared to net income of $55.0 million, or $2.40 per diluted share, for the
year ended December 31, 1996. At December 31, 1997, Cullen/Frost had total
assets, deposits and shareholders' equity of $5.2 billion, $4.5 billion and $408
million, respectively, as compared to $4.9 billion, $4.2 billion and $379
million, respectively, at December 31, 1996. The above reported results of
operations and financial position do not reflect the Merger with Overton.
On July 21, 1998, Cullen/Frost reported after-tax operating earnings
for the second quarter 1998 of $21.0 million, or $.77 per diluted common share,
which earnings excluded the after-tax impact of merger-related charges
associated with the Merger. Including the merger-related charge, net income and
diluted cash earnings per share were reported as $11.5 million and $.42,
respectively.
Cullen/Frost's principal executive offices are located at 100 West
Houston Street, San Antonio, Texas 78205 (telephone:(210) 220-4011).
Cullen/Frost's Common Stock. Cullen/Frost Common Stock began trading on
the NYSE on August 14, 1997 under the symbol "CFR." Prior to that date
Cullen/Frost Common Stock traded on The NASDAQ Stock Market under the symbol
"CFBI".
-4-
<PAGE>
RECENT DEVELOPMENTS
OVERTON BANKSHARES INC.
On May 29, 1998, Cullen/Frost acquired Overton, a Texas corporation and
a registered bank holding company conducting its operations through the 14 full
service banking facilities of its banking subsidiary Overton Bank and Trust N.A.
based in Tarrant and Dallas Counties, Texas. In connection with the Merger,
Cullen/Frost issued 4,382,321 shares of Common Stock to holders of Overton
common stock, including 92,750 shares to the Selling Stockholder of which 12,000
shares are covered by this Prospectus.
DESCRIPTION OF CULLEN/FROST CAPITAL STOCK
The descriptive information below outlines certain provisions of the
Cullen/Frost Articles of Incorporation (the "Cullen/Frost Articles"), the bylaws
of Cullen/Frost (the "Cullen/Frost Bylaws") and the Texas Business Corporations
Act (the "TBCA"). The information does not purport to be complete and is
qualified in all respects by reference to the provisions of the Cullen/Frost
Articles of Incorporation and the Cullen/Frost Bylaws, which are incorporated by
reference as exhibits to the Registration Statement, and the TBCA. See
"Available Information."
GENERAL
Cullen/Frost's authorized capital stock consists of 90,000,000 shares
of Cullen/ Frost Common Stock, and 10,000,000 shares of preferred stock, par
value $0.01 per share ("Cullen/Frost Preferred Stock"). As of July 19, 1998
there were 26,648,010 shares of Cullen/Frost Common Stock outstanding and no
shares of Cullen/Frost Preferred Stock outstanding. In addition, on July 19,
1998, 2,719,541 shares of Cullen/Frost Common Stock were reserved for issuance
upon conversion of notes, exercise of stock options and awards.
Because Cullen/Frost is a holding company, the rights of Cullen/Frost
to participate in any distribution of assets of any subsidiary upon its
liquidation or reorganization or otherwise (and thus the ability of
Cullen/Frost's shareholders to benefit indirectly from such distribution) would
be subject to the prior claims of creditors of that subsidiary, except to the
extent that Cullen/Frost itself may be a creditor of that subsidiary with
recognized claims. Claims on Cullen/Frost's subsidiaries by creditors other than
Cullen/Frost will include substantial obligations with respect to deposit
liabilities and purchased funds.
PREFERRED STOCK
The Cullen/Frost Board is authorized to fix the preferences,
limitations and relative rights of the Cullen/Frost Preferred Stock and may
establish series of such Cullen/Frost Preferred Stock and determine the
variations between series, and may cause Cullen/Frost to issue any such shares
without the approval of the holders of Cullen/Frost Common Stock. If and when
any Cullen/Frost Preferred Stock is issued, the holders of Cullen/Frost
Preferred Stock may have a preference over holders of Cullen/Frost Common Stock
in the payment of dividends, upon liquidation of Cullen/Frost, in respect of
voting rights and in the redemption of the capital stock of Cullen/Frost.
-5-
<PAGE>
COMMON STOCK
Dividends. The holders of Cullen/Frost Common Stock are entitled to
share ratably in dividends when and if declared by the Cullen/Frost Board from
funds legally available therefor.
Voting Rights. Each holder of Cullen/Frost Common Stock has one vote
for each share held on matters presented for consideration by the shareholders.
Classification of Board of Directors. The Cullen/Frost Board is divided
into three classes, each serving three-year terms, so that approximately
one-third of the directors of Cullen/Frost are elected at each annual meeting of
the shareholders of Cullen/Frost. Classification of the Cullen/Frost Board has
the effect of decreasing the number of directors that could be elected in a
single year by any person who seeks to elect its designees to a majority of the
seats on the Cullen/Frost Board and thereby could impede a change in control of
Cullen/Frost.
Preemptive Rights. The holders of Cullen/Frost Common Stock have no
preemptive rights to acquire any additional shares of Cullen/Frost Common Stock.
Issuance of Stock. The Cullen/Frost Articles authorize the Cullen/Frost
Board to issue authorized shares of Cullen/Frost Common Stock and Cullen/Frost
Preferred Stock and any other securities without shareholder approval. However,
Cullen/Frost Common Stock is listed on the NYSE, which requires shareholder
approval of the issuance of additional shares of Cullen/Frost Common Stock under
certain circumstances.
Liquidation Rights. In the event of liquidation, dissolution or
winding-up of Cullen/Frost, whether voluntary or involuntary, the holders of
Cullen/Frost Common Stock will be entitled to share ratably in any of its assets
or funds that are available for distribution to its shareholders after the
satisfaction of its liabilities (or after adequate provision is made therefor)
and after preferences of any outstanding Cullen/Frost Preferred Stock.
Cullen/Frost Common Stock is neither redeemable nor convertible into another
security of Cullen/Frost.
AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS
The Cullen/Frost Articles do not contain provisions for amending the
Cullen/Frost Articles or Cullen/Frost Bylaws. Pursuant to the TBCA, the
Cullen/Frost Articles can be amended by a two-thirds vote of the Cullen/Frost
Common Stock.
Cullen/Frost's Bylaws provide that the Cullen/Frost Bylaws may be
adopted, amended or repealed by a vote of a majority of the Directors or by a
vote of the holders of three-fourths of the outstanding shares.
SPECIAL MEETINGS OF SHAREHOLDERS
A special meeting of the shareholders of Cullen/Frost may be called by
the holders of at least 10% of the outstanding Cullen/Frost Common Stock
entitled to vote at such meeting, by the Cullen/Frost Board, or the Senior
Chairman, Chairman or President of Cullen/Frost.
NUMBER OF DIRECTORS, CLASSIFIED BOARD OF DIRECTORS
The Cullen/Frost Bylaws state that the number of directors shall
consist of one or more members as determined from time to time by the
Cullen/Frost Board. The Cullen/Frost Board currently has 22 directors. The
Cullen/Frost Bylaws state that, commencing with the 1996 Annual Meeting of
Shareholders, the Cullen/Frost Board shall be divided into three classes to
serve staggered three-year terms after the initial expiration dates of each
respective class. The effect of Cullen/Frost's having a classified board of
directors is
-6-
<PAGE>
that approximately only one-third of the members of the Cullen/Frost Board are
elected each year; consequently, two annual meetings of Shareholders are
effectively required for Cullen/Frost's shareholders to change a majority of the
members of the Cullen/Frost Board.
REMOVAL OF DIRECTORS
The Cullen/Frost Bylaws state that a director of Cullen/Frost may be
removed only for cause and only by the affirmative vote of the holders of
two-thirds of the outstanding voting shares.
ADVANCE NOTICE OF DIRECTOR NOMINATIONS
The Cullen/Frost Bylaws provide that director nominations by a
shareholder must be in writing delivered to the Secretary of Cullen/Frost not
less than 60 nor more than 90 days prior to the date of the meeting; provided,
however, that if the date of the meeting is first publicly announced or
disclosed (in a public filing or otherwise) less than 70 days prior to the date
of meeting, such advance notice shall be given not more than 10 days after such
date is first so announced or disclosed. Public notice shall be deemed to have
been given 70 days or more in advance of the annual meeting of shareholders if
Cullen/Frost shall have previously disclosed, in the Cullen/Frost Bylaws or
otherwise, that the annual meeting of shareholders in each year is to be held on
a determinable date, unless and until the Cullen/Frost Board determines to hold
the meeting on a different date.
LIMITATION ON DIRECTOR LIABILITY
The Cullen/Frost Articles provide that, to the full extent permitted by
law, a director of Cullen/Frost shall not be liable to Cullen/Frost or its
shareholders for monetary damages for an act or omission in the director's
capacity as a director, except that the Cullen/Frost Articles do not limit the
liability of a director for: (i) a breach of a director's duty of loyalty to
Cullen/Frost or its shareholders; (ii) an act or omission not in good faith or
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; (iv) an action or omission for which the liability of a director is
expressly provided for by statute; or (v) an act related to an unlawful stock
repurchase or payment of a dividend.
INDEMNIFICATION
The Cullen/Frost Bylaws provide that Cullen/Frost shall, to the fullest
extent to which it is empowered to do so by the TBCA and any other applicable
laws, indemnify any person who was, is or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a director or officer of the corporation, or is or was serving
at the request of the corporation as a director, officer, partner, venturer,
proprietary, trustee, employee, agent or similar functionary of another foreign
or domestic corporation, partnership, joint venture, trust or other enterprise,
against all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding. Reasonable expenses incurred in defending a
civil or criminal action, suit or proceeding shall be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of (i) a written affirmation by the director, officer, employee or agent who may
be entitled to such indemnification of such persons's good faith belief that
such person has met the standard of conduct necessary for indemnification under
the applicable statute, and (ii) a written undertaking by or on behalf of the
director, officer, employee or agent who may be entitled to such
indemnification, to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation.
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<PAGE>
SHAREHOLDER PROTECTION RIGHTS PLAN
On July 25, 1989, the Cullen/Frost Board declared a dividend of one
preferred share purchase right (a "Right") for each share of Cullen/Frost Common
Stock held of record at the close of business on August 1, 1989, or issued
thereafter and prior to the Separation Time. The Rights were issued pursuant to
a Rights Agreement, dated as of July 25, 1989, between Cullen/Frost and The Bank
of New York, as rights agent (the "Original Rights Agreement"). On July 30,
1996, Cullen/Frost amended and restated the Original Rights Agreement in its
entirety (the "Restated Rights Agreement") and appointed Frost Bank to replace
The Bank of New York, as Rights Agent. The terms of the Rights, as so amended by
the Restated Rights Agreement, are as follows:
Each Right entitles its registered holder to purchase from
Cullen/Frost, after the Separation Time, one one-hundredth of a share of Junior
Participating Preferred Stock, par value $5.00 per share (the "Junior Preferred
Stock"), for $100 (the "Exercise Price"), subject to adjustment. The Rights will
be evidenced by the Cullen/Frost Common Stock certificates until the close of
business on the earlier of the date (either, the "Separation Time") that is (i)
the 10th business day (or such later date as the Cullen/Frost Board of Directors
may from time to time fix by resolution adopted prior to the Separation Time
that would otherwise have occurred) after the date on which any Person (as
defined in the Restated Rights Agreement) commences a tender or exchange offer
which, if consummated, would result in such Person's becoming an Acquiring
Person, or (ii) the tenth business day (or such earlier or later date as the
Cullen/Frost Board may from time to time fix by resolution adopted prior to the
Flip-in Date (as hereinafter defined) that would otherwise have occurred) after
the first date of public announcement by Cullen/Frost that such Person has
become an Acquiring Person (the "Flip-in Date"); provided that if a tender or
exchange offer referred to in clause (i) is canceled, terminated or otherwise
withdrawn prior to the Separation Time without the purchase of any shares of
Cullen/Frost Common Stock pursuant thereto, such offer shall be deemed never to
have been made. An Acquiring Person is any Person who is the Beneficial Owner
(as defined in the Restated Rights Agreement) of 10% or more of the outstanding
shares of Cullen/Frost Common Stock, provided, however, such term shall not
include (i) Cullen/Frost, any wholly-owned subsidiary of Cullen/Frost or any
employee stock ownership or other employee benefit plan of Cullen/Frost, (ii)
any Person who is the Beneficial Owner of 10% or more of the outstanding
Cullen/Frost Common Stock as of the date of the Restated Rights Agreement or who
shall become the Beneficial Owner of 10% or more of the outstanding Cullen/Frost
Common Stock solely as a result of an acquisition of Cullen/Frost Common Stock
by Cullen/Frost, until such time as such Person acquires additional Cullen/Frost
Common Stock, other than through a dividend or stock split, (iii) any Person who
becomes an Acquiring Person without any plan or intent to seek or affect control
of Cullen/Frost if such Person promptly divests sufficient securities such that
such 10% or greater Beneficial Ownership ceases or (iv) any Person who
Beneficially Owns as defined in the Restated Rights Agreement shares of Common
Stock consisting solely of (a) shares acquired pursuant to the grant or exercise
of an option granted by Cullen/Frost in connection with an agreement to merge
with, or acquire, Cullen/Frost prior to a Flip-in Date, (b) shares owned by such
Person and its Affiliates (as defined in the Restated Rights Agreement) and
Associates (as defined in the Restated Rights Agreement) at the time of such
grant, (c) shares, amounting to less than 1% of the outstanding Cullen/Frost
Common Stock, acquired by Affiliates and Associates of such Person after the
time of such grant or (d) shares that are held by such Person in trust accounts,
managed accounts and the like or otherwise held in a fiduciary capacity, that
are Beneficially Owned as defined in the Restated Rights Agreement by third
Persons who are not Affiliates or Associates of such Person or acting together
with such Person to hold shares, or which are held by such Person in respect of
a debt previously contracted. The Restated Rights Agreement provides that, until
the Separation Time, the Rights will be transferred with and only with the
Cullen/Frost Common Stock. Cullen/Frost Common Stock certificates issued prior
to the Separation Time shall evidence one Right for each share of Cullen/Frost
Common Stock represented thereby and shall contain a legend incorporating by
reference the terms of the Restated Rights Agreement (as such may be amended
from time to time). Notwithstanding the absence of the aforementioned legend,
certificates evidencing shares of Cullen/Frost Common Stock outstanding on or
prior to the Record Date ("Record Date") or which bear an earlier form of legend
shall also evidence one Right for each share of Cullen/Frost Common Stock
evidenced
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<PAGE>
thereby. Promptly following the Separation Time, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to holders of
record of Cullen/Frost Common Stock at the Separation Time.
The Rights will not be exercisable until the Business Day (as defined
in the Restated Rights Agreement) following the Separation Time. The Rights will
expire on the earlier of (i) the close of business on July 25, 1999 and (ii) the
date on which the Rights are redeemed as described below (in any such case, the
"Expiration Time").
The Exercise Price and the number of Rights outstanding, or in certain
circumstances the securities purchasable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution in the event of a
Cullen/Frost Common Stock dividend on, or a subdivision or a combination into a
smaller number of shares of, Cullen/Frost Common Stock, or the issuance or
distribution of any securities or assets in respect of, in lieu of or in
exchange for Cullen/Frost Common Stock.
In the event that prior to the Expiration Time a Flip-in Date occurs,
each Right (other than Rights Beneficially Owned by the Acquiring Person or any
affiliate or associate thereof, which Rights shall become void) shall constitute
the right to purchase from Cullen/Frost, upon the exercise thereof in accordance
with the terms of the Restated Rights Agreement, that number of shares of
Cullen/Frost Common Stock having an aggregate Market Price (as defined in the
Restated Rights Agreement), on the date of the public announcement of an
Acquiring Person's becoming such (the "Stock Acquisition Date") that gave rise
to the Flip-in Date, equal to twice the Exercise Price for an amount in cash
equal to the then current Exercise Price. In addition, the Cullen/Frost Board
may, at its option, at any time after a Flip-in Date and prior to the time an
Acquiring Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Cullen/Frost Common Stock, elect to exchange all (but not
less than all) the then outstanding Rights (other than Rights Beneficially Owned
by the Acquiring Person or any affiliate or associate thereof, which Rights
become void) for shares of Cullen/Frost Common Stock at an exchange ratio of one
share of Cullen/Frost Common Stock per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
of the Separation Time (for purposes of this section only, the "Exchange
Ratio"). Immediately upon such action by the Cullen/Frost Board (the "Exchange
Time") the Rights will terminate and each Right will represent only the right to
receive a number of shares of Cullen/Frost Common Stock equal to the Exchange
Ratio.
Whenever Cullen/Frost shall become obligated under the preceding
paragraph to issue shares of Cullen/Frost Common Stock upon exercise of or in
exchange for Rights, Cullen/Frost, at its option, may substitute therefor shares
of Preferred Stock, at a ratio of one one-hundredth of a share of Preferred
Stock for each share of Cullen/Frost Common Stock so issuable.
In the event that prior to the Expiration Time Cullen/Frost enters
into, consummates or permits to occur a transaction or series of transactions
after the time an Acquiring Person has become such in which, directly or
indirectly, (i) Cullen/Frost shall consolidate or merge or participate in a
binding share exchange with any other Person if, at the time of the
consolidation, merger or share exchange or at the time Cullen/Frost enters into
an agreement with respect to such consolidation, merger or share exchange, the
Acquiring Person Controls (as defined in the Restated Rights Agreement) the
Cullen/Frost Board and either (a) any term of or arrangement concerning the
treatment of shares of capital stock in such merger, consolidation or share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of Cullen/Frost Common Stock or (b) the
Person with whom the transaction or series of transactions occurs is the
Acquiring Person or an Affiliate or Associate of the Acquiring Person, (ii)
Cullen/Frost shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer) assets (a) aggregating more than
50% of the assets (measured by either book value or fair market value) or (b)
generating more than 50% of the operating income or cash flow, of Cullen/Frost
and its subsidiaries (taken as a whole) to any other Person (other than
Cullen/Frost or one or more of its wholly-owned subsidiaries) or to two or more
such Persons which are affiliated or otherwise acting in concert, if, at the
time such sale or transfer of assets or at the time Cullen/Frost (or any such
subsidiary) enters into an agreement with respect to such sale or transfer, the
Acquiring Person
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<PAGE>
Controls the Cullen/Frost Board or (iii) any Acquiring Person shall (a) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of, to, from, or with, as the case may be, Cullen/Frost or any of its
subsidiaries, over any period of 12 consecutive calendar months, assets (1)
having an aggregate fair market value of more than $15,000,000 or (2) on terms
and conditions less favorable to Cullen/Frost than Cullen/Frost would be able to
obtain through arm's-length negotiations with an unaffiliated third party, (b)
receive any compensation for services from Cullen/Frost or any of its
subsidiaries, other than compensation for full-time employment as a regular
employee at rates in accordance with Cullen/Frost's (or its subsidiaries') past
practices, (c) receive the benefit, directly or indirectly (except
proportionately as a shareholder), over any period of 12 consecutive calendar
months, of any loans, advances, guarantees, pledges, insurance, reinsurance or
other financial assistance or any tax credits or other tax advantage provided by
Cullen/Frost or any of its subsidiaries involving an aggregate principal amount
in excess of $5,000,000 or an aggregate cost or transfer of benefits from
Cullen/Frost or any of its subsidiaries in excess of $5,000,000 or, in any case,
on terms and conditions less favorable to Cullen/Frost than Cullen/Frost would
be able to obtain through arm's-length negotiations with a third party, or (d)
increase by more than 1% its proportionate share of the outstanding shares of
any class of equity securities or securities convertible into any class of
equity securities of Cullen/Frost or any of its subsidiaries as a result of any
acquisition from Cullen/Frost (with or without consideration), any
reclassification of securities (including any reverse stock split), or
recapitalization, of Cullen/Frost, any merger or consolidation of Cullen/Frost
or any other transaction or series of transactions (whether or not with or into
or otherwise involving an Acquiring Person) (a "Flip-over Transaction or
Event"), Cullen/Frost shall take such action as shall be necessary to ensure,
and shall not enter into, consummate or permit to occur such Flip-over
Transaction or Event until it shall have entered into a supplemental agreement
with the Person engaging in such Flip-over Transaction or Event or the parent
corporation thereof (the "Flip-over Entity"), for the benefit of the holders of
the Rights, providing, that upon consummation or occurrence of the Flip-over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-over Entity upon exercise thereof in accordance with the
terms of the Restated Rights Agreement, that number of shares of common stock of
the Flip-over Entity having an aggregate Market Price on the date of
consummation or occurrence of such Flip-over Transaction or Event equal to twice
the Exercise Price for an amount in cash equal to the then current Exercise
Price and (ii) the Flip-over Entity shall thereafter be liable for, and shall
assume, by virtue of such Flip-over Transaction or Event and such supplemental
agreement, all the obligations and duties of Cullen/Frost pursuant to the
Restated Rights Agreement. For purposes of the foregoing description, the term
"Acquiring Person" shall include any Acquiring Person and its Affiliates and
Associates counted together as a single Person.
The Cullen/Frost Board may, at its option, at any time prior to the close of
business on the Flip-in Date, redeem all (but not less than all) the then
outstanding Rights at a price of $.01 per Right (the "Redemption Price"), as
provided in the Restated Rights Agreement. Immediately upon the action of the
Cullen/Frost Board electing to redeem the Rights, without any further action and
without any notice, the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive the Redemption Price
in cash for each Right so held.
The holders of Rights will, solely by reason of their ownership of Rights, have
no rights as shareholders of Cullen/Frost, including, without limitation, the
right to vote or to receive dividends.
CHANGES IN CONTROL
Certain provisions of the Cullen/Frost Articles, the Cullen/Frost's Bylaws and
applicable United States federal law may have the effect of preventing,
discouraging or delaying any change in control of Cullen/Frost. The authority of
the Cullen/Frost Board to issue Preferred Stock with such rights and privileges
as it may deem appropriate may enable the Cullen/Frost Board to prevent a change
in control despite a shift in ownership of the Cullen/Frost Common Stock. In
addition, the Cullen/Frost Board's power to issue additional shares of
Cullen/Frost Common Stock may help delay or deter a change in control by
increasing the number of shares needed to gain control. Moreover, the
classification of the Cullen/Frost Board would delay the ability of a
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dissatisfied shareholder or anyone who obtains a controlling interest in the
Cullen/Frost Common Stock to elect its designees to a majority of the seats on
the Cullen/Frost Board. In addition, a director of Cullen/Frost may be removed
only for cause and only by the affirmative vote of the holders of two-thirds of
the outstanding voting shares. Such provision also may deter any change in
control of Cullen/Frost.
The Federal Change in Bank Control Act of 1978, as amended, prohibits a
person or group of persons from acquiring "control" of a bank holding company
unless the Federal Reserve has been given 60 days' prior written notice of such
proposed acquisition and within that time period the Federal Reserve has not
issued a notice disapproving the proposed acquisition or extending for up to
another 30 days the period during which such a disapproval may be issued. An
acquisition may be made prior to the expiration of the disapproval period if the
Federal Reserve issues written notice of its intent not to disapprove the
action. Under a rebuttable presumption established by the Federal Reserve, the
acquisition of more than 10% of a class of voting stock of a bank holding
company with a class of securities registered under Section 12 of the Exchange
Act would, under the circumstances set forth in the presumption, constitute the
acquisition of control.
In addition, any "company" would be required to obtain the approval of the
Federal Reserve under the BHC Act before acquiring 25% (5% in the case of an
acquiror that is a bank holding company) or more of the outstanding shares of
Cullen/Frost Common Stock, or such lesser number of shares as constitute control
over Cullen/Frost.
SELLING STOCKHOLDER
The Shares are being offered for the account of the selling stockholder of
Cullen/Frost named below (the "Selling Stockholder"). The Selling Stockholder
may offer Shares in separate transactions or in a single transaction. The Shares
were issued by Cullen/Frost to the Selling Stockholder in connection with the
Merger on May 29, 1998.
The Selling Stockholder is the Overton Bancshares, Inc. Employees' Stock
Ownership Plan (the "ESOP"). The ESOP was established for eligible employees of
Overton and its bank subsidiary Overton Bank and Trust, N.A. effective January
1, 1995. Terms of the ESOP provided that shares of common stock of Overton would
be sold to the ESOP at a price equal to fair market value. The purchase price of
the shares would be paid from the proceeds of a loan which the ESOP obtained
from Frost National Bank, with the loan to be repaid from subsequent
contributions by Overton to the ESOP.
In 1996, the ESOP borrowed $1,000,000 from Frost National Bank, a bank
subsidiary of Cullen/Frost, (guaranteed by Overton) to purchase 25,000 shares of
common stock of Overton. These shares were held in trust and were issued to
Overton and Overton Bank and Trust employees' accounts in the ESOP as the loan
was repaid. At May 29, 1998, 8,545 shares were allocated to employees. As a
result of the merger of Overton with and into Cullen/Frost, the 25,000 shares of
common stock of Overton held by the ESOP were exchanged for 92,750 shares of
common stock of Cullen/Frost. The Selling Stockholder plans to sell the shares
of Common Stock registered hereby to repay the principal of and accrued interest
on the loan contracted in 1996. The ESOP's current trustee is Frost National
Bank, as successor to the original trustee, Overton Bank and Trust.
The Selling Stockholder does not own more than one percent of the
outstanding shares of Common Stock.
Because the Selling Stockholder may sell all or a portion of the Shares
that may be offered pursuant to this Prospectus, the number of Shares that will
be owned by the Selling Stockholder upon termination of this offering cannot be
determined.
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PLAN OF DISTRIBUTION
The Shares may be sold from time to time directly by the Selling
Stockholder in separate transactions or in a single transaction. Such sales may
be made on the NYSE, or such other national securities exchange or automated
interdealer quotation system on which shares of Common Stock are then listed,
through negotiated transactions or otherwise at market prices prevailing at the
time of the sale or at negotiated prices. Alternatively , from time to time the
Selling Stockholder may offer Shares through brokers, dealers or agents,
including a broker-dealer subsidiary of Cullen/Frost, who may receive
compensation in the form of concessions or commissions from the Selling
Stockholder, agents and/or the purchasers for whom they may act as agent. If
necessary, a supplemental Prospectus will describe the method of sale in greater
detail. In addition, any of the Shares which qualify for sale pursuant to Rule
144 under the Securities Act may be sold under Rule 144 rather than pursuant to
this Prospectus.
The Selling Stockholder and any such brokers, dealers or agents that
participate in the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, and any profits on the sale of Shares
by them and any associated discounts, commissions or concessions that are
received may be deemed to be underwriting compensation under the Securities Act.
To the extent the Selling Stockholder may be deemed to be an underwriter, the
Selling Stockholder may be subject to certain statutory liabilities under the
Securities Act, including but not limited to Sections 11 and 12 of the
Securities Act.
Shares may be sold from time to time on one or more transactions at a fixed
offering price, which may be changed, or at varying prices determined at the
time of sale or at negotiated prices. If applicable, such prices will be
determined by agreement between the Selling Stockholder and any such dealers.
The Selling Stockholder may, from time to time, authorize dealers, acting as the
Selling Stockholder's agents, to solicit offers to purchase Shares upon the
terms and conditions set forth in any supplemental Prospectus. Cullen/Frost is
not aware of any arrangements or contacts that the Selling Stockholder has
entered into to effect any such transactions in the Shares, nor is Cullen/Frost
aware of which brokerage firms the Selling Stockholders may select to effect
brokerage transactions.
The Selling Stockholder and any other person participation in a sale of
distribution of Shares will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including without limitation Rule
10b-5 and Regulation M, which provisions may limit the timing of purchases and
sales of any of the Shares by the Selling Stockholder and any other such person.
In order to comply with securities laws in certain jurisdictions, the
Shares offered hereby will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain jurisdictions
the securities offered hereby may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or an exemption from
registration qualification is available and is complied with.
Cullen/Frost will not receive any part of the proceeds from the sale of the
Shares. The Selling Stockholder plans to use the proceeds from sales hereunder
to repay the principal of and accrued interest on a loan contracted in 1996 from
Frost National Bank, a subsidiary of Cullen/Frost. See "Selling Stockholder".
The Selling Stockholder will pay all applicable stock transfer taxes, brokerage
commission, underwriting discounts or commission and the fees of the Selling
Stockholder's counsel, and Cullen/Frost will bear all other expenses in
connection with the offering and sale of the Shares, including filing fees,
legal and accounting fees and expenses, printing costs, and other expenses
arising out of the preparation and filing of the Registration Statement and this
Prospectus. Cullen/Frost has agreed to indemnify the Selling Stockholder against
certain liabilities, including certain liabilities under the Securities Act, in
connection with the registration and the offering and sale of the Shares.
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<PAGE>
USE OF PROCEEDS
Cullen/Frost will not directly receive any proceeds from the sales
hereunder of the Shares but will bear certain of the expenses thereof. See "Plan
Of Distribution". The Selling Stockholder plans to use the proceeds from sales
hereunder to repay the principal of and accrued interest on a loan contracted in
1996 from Frost National Bank, a subsidiary of Cullen/Frost. See "Selling
Stockholder".
EXPERT
The consolidated financial statements of Cullen/Frost included in
Cullen/Frost's current report on Form 8-K dated August 6, 1998 for the year
ended December 31, 1997 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements are incorporated by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
VALIDITY OF CULLEN/FROST COMMON STOCK
The validity of the shares of Cullen/Frost Common Stock being offered
hereby was passed upon for Cullen/Frost by Wachtell, Lipton, Rosen & Katz.
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<TABLE>
<S> <C>
============================================================= =============================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED OR INCORPORATED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
CULLEN/FROST, BY THE SELLING STOCKHOLDER OR BY ANY OTHER
PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE 12,000 SHARES
MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
CULLEN/FROST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SHARES DESCRIBED IN THIS
PROSPECTUS OR AN OFFER TO SELL OR SOLICITATION OF AN OFFER
TO BUY SUCH SHARES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER
OR SOLICITATION IS UNLAWFUL.
------------------------------
CULLEN/FROST
---------------------- ------------------------------
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BANKERS, INC.
TABLE OF CONTENTS
------------------------------
PAGE
----
Available Information.................................... 2
Incorporation of Certain Documents by
Reference.............................................. 3
Cautionary Statement Concerning
Forward-Looking Information............................ 3 COMMON STOCK
Cullen/Frost............................................. 4
Recent Developments...................................... 5 (PAR VALUE $0.01 PER SHARE)
Description of Cullen/Frost Capital Stock................ 5
Selling Stockholder...................................... 11
Plan of Distribution..................................... 12
Use of Proceeds.......................................... 13
Expert................................................... 14
Validity of Cullen/Frost Common Stock.................... 14
----------------------
============================================================= =============================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth an itemization of all estimated expenses in
connection with the issuance and distribution of the securities being
registered, none of which are payable by the Selling Stockholder.
Registration Statement filing fee $170 Previously paid by Registrant
Legal fees and expenses $10,000
Accounting fees and expenses $5,000
Printing costs $2,000
Miscellaneous $2,500
Total $19,670
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant is incorporated under the laws of Texas. Section 2.02-1. of
the Texas Business Corporation Act prescribes the conditions under which
indemnification may be obtained by a present or former director or officer of
the Registrant who incurs expenses or liability as a consequence of certain
proceedings arising out of his or her activities as a director or officer.
Article 11 of the Registrant's Amended and Restated Articles of Incorporation
and Article V of the Registrant's Bylaws provide for indemnification of
directors and officers under certain circumstances. The Registrant has purchased
a standard liability policy, which, subject to any limitations set forth in the
policy, indemnifies the Registrant's directors and officers for damages that
they become legally obligated to pay as a result of any negligent act, error or
omission committed while serving in their official capacity.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following exhibits are filed herewith or incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ---------------------------------------------------------------------------------
<S> <C>
2.1 --Agreement and Plan of Merger, by and between Overton Bancshares, Inc. and
Cullen/Frost Bankers, Inc., dated as of February 15, 1998. *
5.1 --Opinion of Wachtell, Lipton, Rosen & Katz. *
8.1 --Opinion of Sullivan & Cromwell. *
8.2 --Opinion of Wachtell, Lipton, Rosen & Katz. *
23.1 --Consent of Keefe, Bruyette & Woods, Inc. *
23.2 --Consent of Sullivan & Cromwell, included in Exhibit 8.1 to this Registration
Statement. *
23.3 --Consent of Wachtell, Lipton, Rosen & Katz, included in Exhibit 8.2 to this
Registration Statement. *
23.4 --Consent of Ernst & Young LLP. *
23.5 --Consent of Coopers & Lybrand LLP. *
23.4 --Consent of Ernst & Young LLP.
24.1 --Power of Attorney. *
99.1 --Form of Poll and Consent mailed to shareholders of Overton Bancshares, Inc. who
are parties to the Common Stock Restriction and Voting Agreement. *
99.2 --Form of Revocable Proxy for Special Meeting of Shareholders of Overton
Bancshares, Inc. *
<FN>
*: Previously filed.
</FN>
</TABLE>
ITEM 17. 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;
(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;
and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change in such information in the registration statement; and
(2) That, for the purpose of determining any liability under the Securities
Act, 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 the time shall be deemed to be the initial bona fide offering
thereof;
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<PAGE>
(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, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement 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.
(c) The undersigned Registrant hereby undertakes that prior to any public
reoffering of the securities registered hereunder through use of a prospectus
which is a part of this registration statement, by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the information called
for by the applicable registration form with respect to reofferings by persons
who may be deemed underwriters, in addition to the information called for by the
other items of the applicable form.
(d) The undersigned Registrant hereby undertakes that every prospectus (i)
that is filed pursuant to paragraph (c) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Securities Act and
is used in connection with an offering of securities subject to Rule 415, will
be filed as a part of an amendment to the registration statement and will not be
used until such amendment is effective, and that, for purposes of determining
any liability under the Securities Act, 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.
(e) Insofar as indemnification for liabilities arising under the Securities
Act 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 for indemnification against
such liabilities (other that 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.
(f) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
(g) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF SAN ANTONIO, STATE OF
TEXAS, THIS DAY OF AUGUST, 1998.
Cullen/Frost Bankers, Inc.
(Registrant)
By: /s/ Phillip D. Green
------------------------------------
PHILLIP D. GREEN
SENIOR EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on this 6th day of August, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Chairman of the Board and August 6, 1998
- ----------------------------------------------Chief Executive Officer
RICHARD W. EVANS, JR. (Principal Executive Officer)
* Senior Chairman of the Board August 6, 1998
- ----------------------------------------------and Director
T. C. FROST
* Senior Executive Vice President August 6, 1998
- ----------------------------------------------and Chief Financial Officer
PHILLIP D. GREEN (Principal Financial Officer)
* Director August 6, 1998
- ----------------------------------------------
ISAAC ARNOLD, JR.
Director
- ----------------------------------------------
ROYCE S. CALDWELL
* Director August 6, 1998
- ----------------------------------------------
RUBEN R. CARDENAS
* Director August 6, 1998
- ----------------------------------------------
HENRY E. CATTO
-18-
<PAGE>
* Director August 6, 1998
- ----------------------------------------------
BOB W. COLEMAN
* Director August 6, 1998
- ----------------------------------------------
HARRY H. CULLEN
* Director August 6, 1998
- ----------------------------------------------
ROY H. CULLEN
* Director August 6, 1998
- ----------------------------------------------
EUGENE H. DAWSON, SR.
* Director August 6, 1998
- ----------------------------------------------
RUBEN ESCOBEDO
* Director August 6, 1998
- ----------------------------------------------
W. N. FINNEGAN, III
* Director August 6, 1998
- ----------------------------------------------
PATRICK B. FROST
* Director August 6, 1998
- ----------------------------------------------
JOE R. FULTON
* Director August 6, 1998
- ----------------------------------------------
JAMES W. GORMAN, JR.
* Director August 6, 1998
- ----------------------------------------------
JAMES L. HAYNE
* Director August 6, 1998
- ----------------------------------------------
RICHARD M. KLEBERG, III
* Director August 6, 1998
- ----------------------------------------------
ROBERT S. MCCLANE
* Director August 6, 1998
- ----------------------------------------------
IDA CLEMENT STEEN
* Director August 6, 1998
- ----------------------------------------------
CURTIS VAUGHAN, JR.
-19-
<PAGE>
* Director August 6, 1998
- ----------------------------------------------
MARY BETH WILLIAMSON
Director
- ----------------------------------------------
HORACE WILKINS, JR.
*By: /s/ Phillip D. Green
-------------------------------------
PHILLIP D. GREEN
ATTORNEY-IN-FACT
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- --------- ---------------------------------------------------------------------------------- ------
<C> <S> <C>
* 2.1 --AGREEMENT AND PLAN OF MERGER, BY AND BETWEEN OVERTON BANCSHARES, INC. AND
CULLEN/FROST BANKERS, INC., DATED AS OF FEBRUARY 15, 1998. .....................
* 5.1 --OPINION OF WACHTELL, LIPTON, ROSEN & KATZ ......................................
* 8.1 --OPINION OF SULLIVAN & CROMWELL. ................................................
* 8.2 --OPINION OF WACHTELL, LIPTON, ROSEN & KATZ. .....................................
* 23.1 --CONSENT OF KEEFE, BRUYETTE & WOODS, INC. .......................................
* 23.2 --CONSENT OF SULLIVAN & CROMWELL, INCLUDED IN EXHIBIT 8.1 TO THIS REGISTRATION
STATEMENT. .....................................................................
* 23.3 --CONSENT OF WACHTELL, LIPTON, ROSEN & KATZ, INCLUDED IN EXHIBIT 8.2 TO THIS
REGISTRATION STATEMENT. ........................................................
* 23.4 --CONSENT OF ERNST & YOUNG LLP. ..................................................
* 23.5 --CONSENT OF COOPERS & LYBRAND LLP. ..............................................
23.6 --CONSENT OF ERNST & YOUNG LLP. ..................................................
* 24.1 --POWER OF ATTORNEY. .............................................................
* 99.1 --FORM OF POLL AND CONSENT MAILED TO SHAREHOLDERS OF OVERTON BANCSHARES, INC.
WHO ARE PARTIES TO THE COMMON STOCK RESTRICTION AND VOTING AGREEMENT............
* 99.2 --FORM OF REVOCABLE PROXY FOR SPECIAL MEETING OF SHAREHOLDERS OF OVERTON
BANCSHARES, INC. ...............................................................
<FN>
*: PREVIOUSLY FILED.
</FN>
</TABLE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Expert" in the
Post-Effective Amendment No. 1 on Form S-3 to Form S-4 Registration Statement
and related Prospectus of Cullen/Frost Bankers, Inc. for the registration of the
resale of 12,000 shares of its common stock and to the incorporation by
reference therein of our report dated February 15, 1998, with respect to the
consolidated financial statements of Cullen/Frost Bankers, Inc. for the year
ended December 31, 1997 included in its Current Report on Form 8-K dated August
6, 1998, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Antonio, Texas
August 6, 1998
