SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
TideMark Bancorp, Inc.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
886412105
(CUSIP Number)
John C. Clark, III
Crestar Financial Corporation
919 East Main Street
Richmond, Virginia 23219
(804) 782-7445
(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)
September 20, 1994
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box. ( )
Check the following box if a fee is being paid with the statement. ( X ) (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
(Continued on following pages)
(Page 1 of 11 Pages)
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CUSIP No. 886412105 13D Page 2 of 11 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Crestar Financial Corporation
I.R.S. No. 54-0722175
2 CHECK THE APPROPRIATE BOX IF (a) ( )
A MEMBER OF A GROUP (b) ( X )
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) Not applicable ( )
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Virginia
NUMBER OF SHARES 7 SOLE VOTING POWER 0
BENEFICIALLY OWNED 8 SHARED VOTING POWER 0
BY EACH REPORTING 9 SOLE DISPOSITIVE POWER 0
PERSON WITH 10 SHARED DISPOSITIVE POWER 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
1,380,000 shares of TideMark Bancorp, Inc. Common Stock*
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES Not applicable ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.9%
14 TYPE OF REPORTING PERSON
Co.
*Pursuant to a Stock Option Agreement dated as of September 20, 1994 TideMark
Bancorp, Inc. has granted an option to Crestar, exercisable in certain events,
to purchase up to 1,380,000 newly issued shares of TideMark Bancorp, Inc. Common
Stock, representing approximately 19.9% of TideMark Bancorp, Inc. Common Stock.
<PAGE>
ITEM 1. Security and Issuer.
The title of the class of equity securities to which this Schedule relates
is TideMark Bancorp, Inc. Common Stock, $0.01 par value ("TideMark Common
Stock"). TideMark Bancorp, Inc. ("TideMark") is a Virginia chartered thrift
holding company for TideMark Bank, a federally chartered savings association.
The address of TideMark principal executive offices is 301 Hiden Boulevard,
Newport News, Virginia 23606.
ITEM 2. Identity and Background.
The following information is given with respect to the persons filing this
Statement:
(a) Crestar Financial Corporation, a Virginia corporation ("Crestar").
(b) The principal executive offices of Crestar are located at 919 East
Main Street, Richmond, Virginia 23219.
(c) Crestar is a bank holding company doing business through wholly- owned
subsidiaries in Virginia, Washington, D.C. and Maryland.
(d) Crestar has not, during the last five years, been convicted in a
criminal proceeding.
(e) Crestar has not, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which it was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
(f) Not applicable to Crestar.
The name, business address, present principal occupation or employment and
the name, principal business and address of any corporation or other
organization in which such employment is conducted, of the directors and
executive officers of Crestar are as follows:
(Page 3 of 11 Pages)
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Directors and Director/Officers:
Richard M. Bagley Patrick J. Maher
President of Bagley Investment President and Chief Executive
Company Officer of Washington Gas
P. O. Box 9 1100 H Street, N.W.
Hampton, VA 23669 Washington, D.C. 20080
J. Carter Fox Frank E. McCarthy
President and Chief Executive Executive Vice President of
Officer of Chesapeake National Automobile Dealers
Corporation Association
P. O. Box 2350 8400 Westpark Drive
Richmond, VA 23218-2350 McLean, VA 22102
Patrick D. Giblin G. Gilmer Minor, III
Vice Chairman of the Board and President and Chief Executive
Chief Financial Officer of Officer of Owens & Minor, Inc.
Crestar P. O. Box 27626
919 East Main Street Richmond, VA 23261
Richmond, VA 23219
Gordon F. Rainey, Jr.
Bonnie Guiton Hill Partner of Hunton & Williams
Dean of the McIntire School 951 East Byrd Street
of Commerce Richmond, VA 23219
Monroe Hall
University of Virginia Frank S. Royal, M.D.
Charlottesville, VA 22903 President and Member of
Frank S. Royal, M.D., P.C.
Gene A. James 1122 North 25th Street Suite A
President and Chief Executive Richmond, VA 23223
Officer of Southern States
Cooperative, Inc. Richard G. Tilghman
P. O. Box 26234 Chairman and Chief Executive
Richmond, VA 23260 Officer of Crestar
919 East Main Street
H. Gordon Leggett, Jr. Richmond, VA 23219
Executive Vice President of
Leggett Stores Eugene P. Trani
P. O. Box 10398 President of Virginia
Lynchburg, VA 24506 Commonwealth University
910 West Franklin Street
Charles R. Longworth Richmond, VA 23284
Chairman, President and Chief
Executive Officer of The William F. Vosbeck
Colonial Williamsburg President of Vosbeck
Foundation Associates, Inc.
P. O. Box 8 211 North Union Street
Williamsburg, VA 23187 Suite 100
Alexandria, VA 22314
(Page 4 of 11 Pages)
<PAGE>
L. Dudley Walker
Chairman of Bassett-Walker,
Inc.
P. O. Box 5423
Martinsville, VA 24115
James M. Wells III
President of Crestar
919 East Main Street
Richmond, VA 23219
Karen Hastie Williams
Partner of Crowell & Moring
1001 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2505
Non-Director Officers:
C. Garland Hagen William K. Butler, II
Corporate Executive President - Eastern Region
Vice President - Investment Crestar Financial Corporation
Bank 919 East Main Street
Crestar Financial Corporation Richmond, VA 23219
919 East Main Street
Richmond, VA 23219 F. Edward Harris
President - Western Region
William C. Harris Crestar Financial Corporation
Corporate Executive 919 East Main Street
Vice President & President Richmond, VA 23219
Greater Washington Banking
Crestar Financial Corporation C.T. Hill
919 East Main Street President - Capital Region
Richmond, VA 23219 Crestar Financial Corporation
919 East Main Street
Robert F. Norfleet, Jr. Richmond, VA 23219
Corporate Executive
Vice President & Senior
Credit Officer
Crestar Financial Corporation
919 East Main Street
Richmond, VA 23219
O.H. Parrish, Jr.
Corporate Executive
Vice President & President
Virginia Banking
Crestar Financial Corporation
919 East Main Street
Richmond, VA 23219
(Page 5 of 11 Pages)
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To the knowledge of Crestar, none of such persons has, during the last five
years, been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
To the knowledge of Crestar, all such persons are citizens of the United
States of America.
ITEM 3. Source and Amount of Funds or Other Consideration.
Any purchase by Crestar of TideMark Common Stock covered by this Schedule
would be made from working capital. The total amount of such funds to be
utilized for such purpose is not anticipated to exceed $5,865,000.
ITEM 4. Purpose of Transaction.
On September 20, 1994, the Board of Directors of TideMark approved a Letter
Agreement (the "Letter Agreement") dated September 20, 1994, between TideMark
and Crestar. The Letter Agreement is to be merged into a definitive acquisition
agreement prior to October 24, 1994. It is contemplated that TideMark shall be
merged with and into Crestar, with Crestar as the surviving corporation (the
"Merger"). In connection with the Merger, each share of TideMark Common Stock
outstanding immediately prior to consummation of the Merger (other than shares
held by Crestar) shall be converted into and represent the right to receive
(upon a shareholder's election) either (i) a number of shares of common stock of
Crestar, par value $5.00 per share ("Crestar Common Stock"), determined by
dividing $5.50 per share of TideMark Common Stock (the "Price Per Share") by the
average closing price of Crestar Common Stock (the "Average Closing Price") as
reported on the New York Stock Exchange for each of the 10 trading days ending
on the tenth day prior to the Effective Time of the Merger (the "Exchange
Ratio"), or (ii) $5.50 in cash (provided that the number of shares of TideMark
Common Stock that elect to receive cash when aggregated with shares as respects
which dissenter's rights are being asserted, shall not exceed 40% of the
outstanding shares of TideMark Common Stock). Persons holding options to
purchase TideMark Common Stock are expected to be given the ability to elect to
receive the Price Per Share less the exercise price in cash, exercise such
options and obtain the above-stated merger consideration to be paid by Crestar,
or have such holder's options assumed by Crestar.
(Page 6 of 11 Pages)
<PAGE>
Consummation of the Merger will be subject to certain usual conditions,
including (i) negotiation of a definitive Agreement (ii) approval by TideMark
shareholders; (iii) receipt of all requisite regulatory approvals; and (iv)
certain other customary conditions. It is expected that the definitive
agreement can be terminated by, among other things, (i) either party if the
other party has materially breached its covenants, agreements, representations
or warranties, (ii) either party if the conditions precedent to such party's
obligations have not been satisfied or fulfilled or would be impossible to
satisfy, (iii) either party if the Merger is not consummated by June 30, 1995,
(iv) Crestar and Crestar Bank if the Boards of Crestar and Crestar Bank
determine that the Merger has become inadvisable or impractical due to
litigation or the commencement of a competing offer for the TideMark Common
Stock which is significantly better than Crestar's offer and Crestar is
unwilling to meet the competing offer.
Crestar and TideMark have entered into a Stock Option Agreement, dated as
of September 20, 1994 ("Option Agreement"), pursuant to which TideMark issued to
Crestar an option to purchase up to 1,380,000 shares of TideMark Common Stock at
a purchase price of $4.25 per share.
The option is exercisable only upon the occurrence of a Purchase Event (as
defined below). A Purchase Event means any of the following events: (i) without
Crestar's prior written consent, TideMark shall have authorized, recommended or
publicly proposed, or entered into an agreement with any person (other than
Crestar or any subsidiary thereof) (A) to effect a merger, consolidation or
similar transaction, (B) for the disposition, by sale, lease, exchange or
otherwise, of 25% or more of the consolidated assets of TideMark and its
subsidiaries or (C) for the issuance, sale or other disposition of securities
representing 25% or more of the voting power of TideMark or any of its
subsidiaries (collectively referred to as an "Acquisition Transaction"); or (ii)
any person (other than Crestar or any subsidiary thereof) shall have acquired
beneficial ownership of 25% or more of the TideMark Common Stock.
The Option Agreement terminates in accordance with its terms on the date on
which occurs the earliest of: (i) the Effective Time of the Merger; (ii) a
termination of the definitive agreement in accordance with their terms (other
than by Crestar under certain circumstances) prior to the occurrence of a
Purchase Event or a Preliminary Purchase Event (as defined below); (iii) 12
months following a termination of the definitive Agreement by Crestar under
certain circumstances; and (iv) 12 months after the termination of the
definitive Agreement in accordance with its terms following the occurrence of a
Purchase Event or a Preliminary Purchase Event.
(Page 7 of 11 Pages)
<PAGE>
A Preliminary Purchase Event means any of the following events: (i) any
person (other than Crestar) shall have commenced a tender offer or exchange
offer to acquire 10% or more of the TideMark Common Stock (a "Tender Offer");
(ii) TideMark's shareholders shall have failed to approve the Merger at a
meeting called for such purpose or such meeting shall not have been held or
shall have been cancelled or TideMark's Board of Directors shall have withdrawn
its recommendation to such shareholders, in each case following the public
announcement of (A) a Tender Offer, (B) a proposal to engage in an Acquisition
Transaction, or (C) the filing of an application or notice to engage in an
Acquisition Transaction.
The Letter Agreement and the Option Agreement are attached hereto as
exhibits and are incorporated herein by reference and made a part hereof to the
same extent as if set forth herein in full. The above summary does not purport
to be complete and is subject to and qualified in its entirety by reference to
the Reorganization Agreement and the Option Agreement.
Except as set forth above and below (including Item 6), neither Crestar,
nor to the knowledge of Crestar, any executive officer or director of Crestar,
has any plans or proposals which relate to or would result in:
(a) the acquisition by any person of additional securities of TideMark, or
the disposition of securities of TideMark;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving TideMark or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of TideMark or any
of its subsidiaries;
(d) any change in the present board of directors or management of
TideMark, including any plans or proposals to change the number or
term of directors to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend policy
of TideMark;
(f) any other material change in TideMark' business or corporate
structure;
(g) changes in TideMark' charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control
of TideMark by any person;
(Page 8 of 11 Pages)
<PAGE>
(h) causing a class of securities of TideMark to be delisted from a
national securities exchange or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national
securities association;
(i) a class of equity securities of TideMark to become eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934; or
(j) any action similar to those enumerated above.
Crestar reserves the right to change its intentions with respect to any or
all of the foregoing and its right to act either alone or together with any
other person or group.
ITEM 5. Interest in Securities of the Issuer.
(a) An aggregate of 1,380,000 shares of TideMark Common Stock would be
owned by Crestar upon exercise of the Option, representing approximately 19.9%
of TideMark Common Stock. Neither Crestar, Crestar Bank (except in a fiduciary
capacity) nor any director or officer of Crestar identified in Item 2 hereof
owns any other shares of TideMark Common Stock and has the right to purchase any
other shares of TideMark Common Stock.
(b) Crestar does not possess sole or shared voting and dispositive power
over any of the shares of TideMark Common Stock covered by this Schedule.
(c) No transactions in TideMark Common Stock other than those reported in
this Schedule have been effected by Crestar, or any director or officer of
TideMark identified in Item 2 hereof within the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements or Understandings with Respect to
Securities of the Issuer.
See Item 4 hereof for a description of the Stock Option Agreement and the
Letter Agreement.
In July 1994, TideMark Bank, a subsidiary of TideMark announced plans to
purchase eight branches and $74 million in deposits of Bay Savings, a division
of FirstFed Michigan Corp., for a premium of 2.5% or $1.8 million. TideMark Bank
is required by contract to complete the Bay Savings Bank transaction by
(Page 9 of 11 Pages)
<PAGE>
December 31, 1994, and has agreed with FirstFed Michigan Corp. to use its "best
efforts" to raise equity capital to complete the transaction. Prior to engaging
in negotiations with Crestar, TideMark had engaged Scott & Stringfellow, Inc., a
Richmond based investment banking and brokerage firm, to assist it in
registering shares of common stock for sale to the public to raise the
approximately $2 million in additional capital needed to complete the Bay
Savings transaction. Because the issuance of additional TideMark common stock
would be dilutive in the Crestar transaction, Crestar Securities Corporation, a
wholly-owned subsidiary of Crestar, has agreed to purchase $2 million of
TideMark preferred stock, and TideMark in turn will invest the $2 million cash
proceeds in TideMark Bank.
ITEM 7. Material to be Filed as Exhibits.
Filed herewith are these exhibits:
(a) Letter Agreement dated September 20, 1994, among Crestar, Crestar Bank
and TideMark.
(b) Stock Option Agreement, dated as of September 20, 1994, between
Crestar and TideMark.
(Page 10 of 11 Pages)
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Schedule 13D is true, complete
and correct.
Dated: September 29, 1994 CRESTAR FINANCIAL CORPORATION
By: /s/ John C. Clark, III
John C. Clark, III, Senior
Vice President and General
Counsel
(Page 11 of 11 Pages)
September 20, 1994
HIGHLY CONFIDENTIAL
Board of Directors
TideMark Bancorp Inc.
301 Hiden Boulevard
Newport News, Virginia 23606
Attention: Gordon L. Gentry, Jr.
Chairman of the Board
Ladies and Gentlemen:
On behalf of Crestar Financial Corporation ("Crestar"), I am pleased to
make the following binding offer to acquire TideMark Bancorp Inc. ("TideMark")
on the terms set forth in this letter.
1. Structure; Valuation and Consideration. The transaction would be
structured as a statutory merger of TideMark into Crestar (the "Merger").
Crestar and TideMark would use their best efforts to make the Merger effective
on or before March 31, 1995, or, if applicable law or regulatory authorities do
not permit the Merger to be effective by this date, as soon as practicable
thereafter. The Merger would be closely followed by the merger of TideMark's
wholly-owned subsidiary, TideMark Bank, a federal savings bank, into Crestar
Bank in an "Oakar" transaction to avoid SAIF exit and BIF entrance fees
otherwise applicable.
For the purpose of determining the Exchange Ratio, each share of TideMark
common stock has been valued at $5.50 per share (the "Price Per Share") based on
the 6,931,321 shares of TideMark common stock outstanding at June 30, 1994,
37,800 TideMark stock options outstanding, 8,163 TideMark shares to be issued to
certain officers, and no shares of preferred stock outstanding. Shareholders of
TideMark would receive Crestar common stock for their TideMark share value
determined at the Price Per Share. The number of shares of Crestar common stock
to be exchanged for each TideMark share would be determined by dividing the
Price Per Share by the average closing price of Crestar common stock as reported
on the New York Stock Exchange for each of the 10 trading days ending on the
10th day prior to the effective date of the Merger. The Exchange Ratio would be
appropriately adjusted in the event of any distribution (other than cash
dividends) with respect to Crestar common stock which occurs prior to the
effective date of the Merger.
Each holder of outstanding options to acquire TideMark Common Stock
("TideMark Options"), shall elect either (1) to exercise the TideMark Options
for TideMark Common Stock prior to the effective time of the Merger, or (2) to
allow TideMark Options to expire at the effective time of the Merger and
following the effective time of the Merger to receive a cash payment (subject to
all applicable withholding taxes) equal to the number of such expired TideMark
Options times the excess of (i) the Purchase Price Per Share of the TideMark
Common Stock over (ii) the exercise price of such expired TideMark Options.
Crestar agrees to make cash payment as soon as practicable following the
effective date of the transaction.
Except for shares that may become issuable pursuant to the Stock Option
Agreement (referred to below), shares issued to raise approximately $2 million
to complete the Bay Savings transaction, shares issued upon exercise of TideMark
Options, or 8,163 shares to be issued to certain officers of TideMark, no
additional shares of TideMark common stock, options to acquire TideMark common
stock, or shares of TideMark preferred stock will be issued between the date of
this letter and the effective date of the Merger.
In order to offer TideMark shareholders maximum flexibility, they may elect
to receive cash for their TideMark shares at the Price Per Share. The number of
shares submitted for cash purchase, when aggregated with shares as respects
which TideMark shareholders exercise dissenters' rights, may not exceed 40% of
total TideMark shares outstanding at the effective date of the Merger.
2. Certain Conditions. The Merger would be subject to satisfaction of
certain conditions precedent usual for transactions of this type, including the
following:
(a) Negotiation of a definitive agreement and plan of reorganization
(the "Agreement") incorporating the agreements expressed in this letter and
other terms and conditions usual for contracts of that type. Crestar and
TideMark would negotiate the Agreement in good faith, and we believe we
should be able to execute the Agreement by October 7, 1994. If we are
unable to execute the Agreement by October 24, 1994, either Crestar or
TideMark may terminate the Letter Agreement, with no liability each to the
other.
(b) Receipt of all necessary contractual, creditor, and regulatory
approvals for the Merger, including approvals of the Board of Governors of
the Federal Reserve System; the Bureau of Financial Institutions of the
Virginia State Corporation Commission; the Office of Thrift Supervision;
and any other federal or state regulatory authority having jurisdiction
over the Merger, and the expiration of all waiting periods required by law.
(c) Compliance with requirements of the Securities Act of 1933 and
applicable state securities laws, including filing a registration statement
covering Crestar common stock issuable in the Merger with the Securities
and Exchange Commission.
(d) Compliance with all applicable federal and state laws and
regulations, the absence in all orders, decrees or advisory letters of
regulatory authorities of any conditions or requirements reasonably deemed
objectionable to Crestar or TideMark, and the absence of any actual or
threatened litigation under federal antitrust laws. Crestar and TideMark
agree to cooperate in taking all reasonable necessary steps to obtain
regulatory and corporate approvals, including, as respects any meeting of
TideMark shareholders, the favorable vote of holders of the requisite
majority of outstanding TideMark capital stock. At the signing of the
definitive Agreement, the members of TideMark's board of directors would
agree to vote their shares in favor of the Merger.
(e) The receipt by Crestar and TideMark of an opinion of Hunton &
Williams to the effect that the Merger constitutes a tax-free
reorganization for federal income tax purposes, except that shareholders
will be taxed upon the receipt of cash.
(f) The taking by Crestar and TideMark of all corporate action
necessary for the Merger by the board of directors and shareholders of
TideMark and the board of directors of Crestar, and as to the extent
required by law and their respective charters and bylaws.
(g) Receipt by TideMark prior to execution of the Agreement of an
opinion of Scott & Stringfellow, Inc. that the consideration to be received
by TideMark shareholders is fair from a financial point of view.
(h) The merger of TideMark Bank into Crestar Bank constituting an
Oakar Transaction.
(i) Consummation of the asset purchase and account assumption
transaction between TideMark Bank and Bay Savings Bank described in Section
7 hereof either prior to or simultaneously with consummation of the Merger
on the terms and conditions currently set forth in the Asset Purchase and
Account Assumption Agreement dated July 11, 1994.
3. Indemnification. Crestar acknowledges its obligation to provide, and
agrees to provide, indemnification to the directors and officers of TideMark
following the effective date of the Merger to the same extent as if TideMark
were maintaining its separate existence after such time. Importantly, Crestar is
also able to provide officers and directors liability insurance coverage to all
TideMark directors and officers, whether or not they become part of the Crestar
organization after the effective date of the Merger. This coverage does not
extend to any acts as to which notice has been given prior to the effective date
of the Merger.
4. PreMerger Audit; Operating Synergies.
(a) PreMerger Audit. The obligation of Crestar and TideMark to consummate
the Merger would be subject to the condition that on the effective date there
shall have been no material adverse change in the business operations or
consolidated financial condition of Crestar or TideMark, from that shown by
their respective financial statements as of June 30, 1994. For purposes of this
letter agreement the term material adverse change shall not include the
following: (1) changes resulting from movements in general market interest
rates, (2) changes in laws, rules and regulations and accounting principles, (3)
adjustments determined by Crestar resulting from Crestar's due diligence review
of TideMark's books and records through July 31, 1994, as described to TideMark,
(4) changes in the capital structure of TideMark due to the issuance of
securities to accomplish the Bay Savings transaction, and (5) any other matters
mutually agreed by the parties and contained in the definitive agreement.
The obligation of Crestar to consummate the Merger would be subject to the
condition that on the effective date there are no preferred shares of TideMark
outstanding (other than shares issued to fund the Bay Savings transaction); and
that since June 30, 1994, there shall have been no change not previously agreed
to by Crestar in TideMark's capital structure, dividend policy, stock option
plans, material contracts, products and services, branches, credit policies,
loan charge-off policies, reserve requirements and securities portfolio
management policies. If preferred shares are issued to fund the Bay Savings
transaction to a purchaser other than Crestar or a Crestar affiliate, they will
be redeemable in the Merger at their issue price. If common shares are issued
to fund the Bay Savings Bank transaction, the Exchange Ratio will be
appropriately adjusted to reflect the issuance of such shares and the receipt of
the proceeds from their sale. In addition, TideMark shall not make any change
in the titles, salaries or bonuses of any of its employees, other than those
permitted by their current employment policies in the ordinary course of
business, any of which changes shall be reported promptly to Crestar.
Crestar's obligation to consummate the Merger would be subject to a
pre-merger audit (at Crestar's expense) to determine the accuracy of the
representations and warranties contained in the Agreement and that there has
been no material adverse change (as defined in Section 4(a)) in the business
(including the loan and securities portfolio), operations or financial condition
of TideMark since June 30, 1994.
(b) Operating Synergies. TideMark's management will work with Crestar to
achieve appropriate operating efficiencies and to make appropriate accruals for
loan loss reserves and expenses and, when indicated, charge-offs prior to
consummation of the Merger. Crestar representatives will be given full access
to TideMark's books and records in this undertaking. TideMark Bank will agree
to take actions necessary to record the tax liability associated with the
tax/bad debt reserve in anticipation of the merger of TideMark Bank into Crestar
Bank. TideMark shall be under no obligation to make any adjustments until such
time as all terms and conditions of the definitive agreement have been satisfied
in full and all contingencies to closing have been eliminated.
5. Branches; Employee Matters. Of TideMark's 17 branches (including the
eight branches to be acquired from Bay Savings Bank), Crestar anticipates
operating four and consolidating 13 into existing TideMark or Crestar locations.
TideMark's senior management group will be interviewed by their Crestar
Bank counterparts with the goal of determining if there are mutually beneficial
employment opportunities available within Crestar. Only the existing employment
agreements with Messrs. Gentry, Springer and Meade and Ms. Lawson will be
honored.
We expect to continue employment of the majority of TideMark's qualified
retail branch personnel either at existing TideMark offices or at other Crestar
locations. TideMark employees whose positions are eliminated due to the Merger
will be interviewed for open positions with the Crestar organizations for which
they qualify and will be given the same priority for available positions as are
existing Crestar Bank employees. After merger consolidations, employees who are
terminated will receive one week's severance pay for each year of service with
TideMark up to 20 years and two weeks of severance pay for each year of service
with TideMark over 20 years if termination occurs within six months of the
effective date of the Merger; provided that any employee terminated within six
months of the effective date shall receive a minimum of four weeks' severance
pay. Out- placement counseling will be available for those terminated
employees.
TideMark's employees will be given credit for past service in determining
eligibility for participation in and vesting of benefits under Crestar employee
benefit plans, but not for purposes of benefit accrual.
We are willing to work with TideMark senior management to designate
employees critical to the transition and to negotiate appropriate pay-to- stay
incentives for them. It is in our mutual best interest to make employee
decisions that we jointly believe will preserve and enhance the value of the
franchise, but given the high value being offered, Crestar must remain the final
authority on these decisions.
6. Advisory Board. Crestar Bank will add two to three former directors
of TideMark to its Peninsula advisory board, and between the date of this letter
agreement and the effective date of the Merger, Crestar Bank and TideMark will
work together to identify those TideMark directors who will become members of
Crestar Bank's Peninsula advisory board.
7. Bay Savings Transaction. TideMark Bank has entered into an Asset
Purchase and Account Assumption Agreement dated July 11, 1994 to acquire certain
assets and assume certain liabilities of the Bay Savings Division from First
Federal of Michigan, a federal savings association. TideMark Bank is obliged to
complete this transaction by December 31, 1994. To do so, TideMark Bank must
raise approximately $2 million in additional capital. Crestar agrees to
negotiate a firm commitment with TideMark by September 26, 1994 to infuse
approximately $2 million in Tier One capital into TideMark, which would in turn
contribute the $2 million as Tier One capital in TideMark Bank. The investment
would be in the form of TideMark preferred stock sold to Crestar at $10 per
share. The Articles of Serial Designation for the preferred stock will provide
that the preferred stock is in every way identical to TideMark common stock
except that it would be (i) nonvoting, except as otherwise required by the
Virginia Stock Corporation Act, (ii) it would pay a $1 per annum dividend
payable quarterly, and (iii) it would be preferred over common stock upon
dissolution or liquidation. If the Merger should be abandoned for any reason,
the preferred stock dividend would thereafter increase by $0.10 per share at the
end of each succeeding three month period coinciding with the date of such
termination, and in such event TideMark would agree to use its best efforts to
raise capital to redeem the preferred stock at its $10 per share issue price,
provided, that if there were an acquisition transaction with another acquirer
proposed or pending, the preferred stock would be redeemed at $10.60 per share
(in all cases plus accrued but unpaid dividends). The commitment agreement
would provide that the preferred stock will be purchased in time to permit
completion of the Bay Savings Bank transaction prior to December 1, 1994, and
that Crestar's obligation to buy the preferred stock is subject to clearance
(which will be immediately sought) by the Staff of the Federal Reserve Board
pursuant to FRB Policy Statement on Non-Voting Equity Investments in Banks, 12
C.F.R. Section 225.143, 1 F.R.R.S. 4-172.1 and Board Staff Letter dated November
5, 1984, 1 F.R.R.S. 4-305.1.
8. Press Releases; Confidentiality; Expenses. Each of Crestar and
TideMark agree that they will not issue any press release or other disclo- sure
of the proposed Merger without prior approval of the other, which shall not be
unreasonably withheld.
Crestar and TideMark shall each maintain the confidentiality of all
confidential information furnished to it by the other party hereto concerning
the business, and operations, and financial condition of the party furnishing
such information including the terms, conditions and indications of value
included within this letter, and shall not use any such information except in
furtherance of the Merger contemplated by this letter. If the Agreement is not
executed, Crestar and TideMark shall promptly return all documents and copies
of, and all workpapers containing, confidential information received from the
other. The obligations of confidentiality under this Section 8 shall survive
non-execution of the Agreement and shall remain in effect, except to the extent
that (a) one party shall have directly or indirectly acquired the assets and
business of the other party; (b) as to any particular confidential information
with respect to one party, such information (i) shall become generally available
to the public other than as a result of an unauthorized disclosure by the other
party or (ii) was available to the other party on a non-confidential basis prior
to its disclosure by the first party; or (c) disclosure by any party is required
by subpoena or order of a court of competent jurisdiction or by order of a
regulatory authority of competent jurisdiction. Each party shall bear its own
expenses in connection with the implementation of this letter of intent,
regardless of whether or not the definitive Agreement is executed.
9. Stock Option Agreement. Simultaneously with the execution of this
letter of agreement, Crestar and TideMark are entering into a Stock Option
Agreement pursuant to which TideMark will grant Crestar an option to purchase
1,380,000 of its authorized but unissued shares at $4.25 cash per share,
exercisable in certain events.
10. Termination. The definitive Agreement will provide for termination in
the event the Merger is not consummated by June 30, 1995.
11. Binding Letter Agreement. This is a binding letter of agreement that
legally commits the parties to the Merger. The parties agree to negotiate in
good faith the Agreement, which will contain terms and conditions usual to
transactions of this type, and into which this letter agreement will be merged.
Very truly yours,
CRESTAR FINANCIAL CORPORATION
By
C. Garland Hagen
Corporate Executive Vice President -
Investment Bank
Accepted and agreed to pursuant
to resolution adopted by the Board
of Directors on September 20, 1994
TIDEMARK BANCORP, INC.
By:_______________________________
Gordon L. Gentry, Jr.
Chairman of the Board
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of September 20, 1994 (the "Agreement"),
by and between TideMark Bancorp, Inc., a Virginia corporation ("Issuer"), and
Crestar Financial Corporation, a Virginia corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into a binding letter of agreement
dated as of September 20, 1994 (the "Letter Agreement") which Letter Agreement
is intended to be merged into a definitive Agreement and Plan of Reorganization
(the "Plan"), providing for, among other things, the merger of Issuer into
Grantee, with Grantee as the surviving corporation (the "Holding Company
Merger") and the subsequent merger of TideMark Bank for Savings FSB into Crestar
Bank (together with the Holding Company Merger, the "Transaction"); and
WHEREAS, as a condition and inducement to Grantee's execution of the Letter
Agreement and the Plan, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Letter Agreement and to be set forth in the Plan, and intending to be
legally bound hereby, Issuer and Grantee agree as follows:
1. Defined Terms. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Letter Agreement.
2. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 1,380,000 shares (adjusted as set forth herein) (the "Option
Shares", which shall include the Option Shares before and after any transfer of
such Option Shares) of Common Stock ("Issuer Common Stock") of Issuer at a
purchase price of $4.25 per Option Share (the "Purchase Price").
3. Exercise of Option.
(a) Provided that Grantee shall not be in material breach of the
agreements or covenants contained in this Letter Agreement or, when executed,
the Plan, and no preliminary or permanent injunction or other order against
delivery of shares covered by the Option issued by any court of competent
jurisdiction in the United States shall be in effect, Grantee may exercise the
Option, in whole or in part, at any time and from time to time following the
occurrence of a Purchase Event; provided, that the Option shall terminate and be
of no further force and effect upon the earliest to occur of (A) the Effective
Time of the Holding Company Merger, (B) termination of the Letter Agreement or,
when executed, the Plan in accordance with the terms thereof prior to the
occurrence of a Purchase Event or a Preliminary Purchase Event (other than a
termination of the Letter Agreement or, when executed, the Plan by Grantee due
to a breach by Issuer of a covenant or agreement contained in the Letter
Agreement or, when executed, the Plan, as the case may be (a "Default
Termination")), (C) 12 months after the termination of the Letter Agreement or,
when executed, the Plan by Grantee pursuant to a Default Termination (provided,
however, that if within 12 months after such a termination of the Letter
Agreement or, when executed, the Plan, a Purchase Event or Preliminary Purchase
Event shall occur, then notwithstanding anything to the contrary contained
herein this option shall terminate 12 months after the first occurrence of such
an event), and (D) 12 months after termination of the Letter Agreement or, when
executed, the Plan (other than pursuant to a Default Termination) following the
occurrence of a Purchase Event or a Preliminary Purchase Event; and provided,
further, that any purchase of shares upon exercise of the Option shall be
subject to compliance with applicable law, including, without limitation, the
Bank Holding Company Act of 1956, as amended (the "BHC Act").
(b) As used herein, a "Purchase Event" means any of the following
events:
(i) Without Grantee's prior written consent, Issuer shall have
authorized, recommended or publicly-proposed, or publicly announced an
intention to authorize, recommend or propose, or entered into an agreement
with any person (other than Grantee or any subsidiary of Grantee) to effect
an, Acquisition Transaction (as defined below). As used herein, the term
Acquisition Transaction shall mean (A) a merger, consolidation or similar
transaction involving Issuer or any of its subsidiaries (other than
transactions solely between Issuer's subsidiaries), (B) the disposition, by
sale, lease, exchange or otherwise, of assets of Issuer or any of its
subsidiaries representing in either case 25% or more of the consolidated
assets of Issuer and its subsidiaries, or (C) the issuance, sale or other
disposition of (including by way of merger, consolidation, share exchange
or any similar transaction) securities representing 25% or more of the
voting power of Issuer or any of its subsidiaries (any of the foregoing an
"Acquisition Transaction"); or
(ii) any person (other than Grantee or any subsidiary of Grantee)
shall have acquired beneficial ownership (as such term is defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "1934 Act")) of or the right to acquire beneficial ownership of, or
any "group" (as such term is defined under the 1934 Act) shall have been
formed which beneficially owns or has the right to acquire beneficial
ownership of, 25% or more of the then outstanding shares of Issuer Common
Stock.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events:
(i) any person (other than Grantee or any subsidiary of Grantee)
shall have commenced (as such term is defined in Rule 14d-2 under the 1934
Act) or shall have filed a registration statement under the Securities Act
of 1933, as amended (the "1933 Act"), with respect to, a tender offer or
exchange offer to purchase any shares of Issuer Common Stock such that,
upon consummation of such offer, such person would own or control 10% or
more of the then outstanding shares of Issuer Common Stock (such an offer
being referred to herein as a "Tender Offer" or an "Exchange Offer",
respectively); or
(ii) the holders of Issuer Common Stock shall not have approved
the Plan at the meeting of such stockholders held for the purpose of voting
on the Plan, such meeting shall not have been held or shall have been
canceled prior to termination of the Plan or Issuer's Board of Directors
shall have withdrawn or modified in a manner adverse to Grantee the
recommendation of Issuer's Board of Directors with respect to the Plan, in
each case after it shall have been publicly announced that any person
(other than Grantee or any subsidiary of Grantee) shall have (A) made, or
disclosed an intention to make, a proposal to engage in an Acquisition
Transaction, (B) commenced a Tender Offer or filed a registration statement
under the 1933 Act with respect to an Exchange Offer, or (C) filed an
application (or given a notice), whether in draft or final form, under the
BHC Act, the Bank Merger Act or the Change in Bank Control Act of 1978, for
approval to engage in an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the 1934 Act.
(d) In the event Grantee wishes to exercise the Option, it shall send
to Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise, and (ii) a place and date not earlier than
three business days nor later than 15 business days from the Notice Date for the
closing (the "Closing") of such purchase (the "Closing Date"). If prior
notification to or approval of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), the Office of Thrift Supervision (the
"OTS") or any other regulatory authority is required in connection with such
purchase, Issuer shall cooperate with Grantee in the filing of the required
notice of application for approval and the obtaining of such approval and the
Closing shall occur immediately following such regulatory approvals (and any
mandatory waiting periods).
4. Payment and Delivery of Certificates.
(a) On each Closing Date, Grantee shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date, and (ii) present and surrender this
Agreement to Issuer at the address of Issuer specified in Section 11(f) hereof.
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a), (i)
Issuer shall deliver to Grantee (A) a certificate or certificates representing
the Option Shares to be purchased at such Closing, which Option Shares shall be
free and clear of all liens, claims, charges and encumbrances of any kind
whatsoever and subject to no preemptive rights, and (B) if the Option is
exercised in part only, an executed new agreement with the same terms as this
Agreement evidencing the right to purchase the balance of the shares of Issuer
Common Stock purchasable hereunder, and (ii) Grantee shall deliver to Issuer a
letter agreeing that Grantee shall not offer to sell or otherwise dispose of
such Option Shares in violation of applicable federal and state law or of the
provisions of this Agreement.
(c) In addition to any other legend that is required by applicable
law, certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF SEPTEMBER 20, 1994. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be removed by
delivery of substitute certificate(s) without such legend if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the Securities and
Exchange Commission (the "SEC"), or an opinion of counsel in form and substance
reasonably satisfactory to Issuer and its counsel, to the effect that such
legend is not required for purposes of the 1933 Act.
5. Representations and Warranties of Issuer. Issuer hereby represents
and warrants to Grantee as follows:
(a) Due Authorization. Issuer has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals referred to
herein, to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Issuer. This Agreement has been duly executed and delivered by Issuer. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and compliance by Issuer with any of the provisions hereof
will not (i) conflict with or result in a breach of any provision of its Charter
or By-laws or a default (or give rise to any right of termination, cancellation
or acceleration) under any of the terms, conditions or provisions of any note,
bond, debenture, mortgage, indenture, license, material agreement or other
material instrument or obligation to which Issuer is a party, by which it or any
of its properties or assets may be bound, or (ii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Issuer or any of
its properties or assets. No consent or approval by any governmental authority,
other than compliance with applicable federal and state securities and banking
laws, and regulations of the Federal Reserve Board and the OTS, is required of
Issuer in connection with the execution and delivery by Issuer of this Agreement
or the consummation by Issuer of the transactions contemplated hereby.
(b) Authorized Stock. Issuer has taken all necessary corporate and
other action to authorize and reserve and to permit it to issue, and, at all
times from the date hereof until the obligation to deliver Issuer Common Stock
upon the exercise of the Option terminates, will have reserved for issuance,
upon exercise of the Option, the number of shares of Issuer Common Stock
necessary for Grantee to exercise the Option, and Issuer will take all necessary
corporate action to authorize and reserve for issuance all additional shares of
Issuer Common Stock or other securities which may be issued pursuant to Section
7 upon exercise of the Option. The shares of Issuer Common Stock to be issued
upon due exercise of the Option, including all additional shares of Issuer
Common Stock or other securities which may be issuable pursuant to Section 7,
upon issuance pursuant hereto, shall be duly and validly issued, fully paid and
nonassessable, and shall be delivered free and clear of all liens, claims,
charges and encumbrances of any kind or nature whatsoever, including any
preemptive rights of any stockholder of Issuer.
6. Representations and Warrants of Grantee. Grantee hereby represents
and warrants to Issuer that:
(a) Due Authorization. Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals or consents
referred to herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has been duly executed
and delivered by Grantee.
(b) Purchase Not for Distribution. This Option is not being, and any
Option Shares or other securities acquired by Grantee upon exercise of the
Option will not be, acquired with a view to the public distribution thereof and
will not be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the 1933 Act.
7. Adjustment upon Changes in Capitalization, etc.
(a) In the event of any change in Issuer Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination, exchange
of shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that Grantee shall receive, upon exercise of the Option, the
number and class of shares or other securities or property that Grantee would
have received in respect of Issuer Common Stock if the Option had been exercised
immediately prior to such event, or the record date therefor, as applicable. If
any additional shares of Issuer Common Stock are issued after the date of this
Agreement (other than pursuant to an event described in the first sentence of
this Section 7(a)), the number of shares of Issuer Common Stock subject to the
Option shall he adjusted so that, after such issuance, it, together with any
shares of Issuer Common Stock previously issued pursuant hereto, equals 19.9% of
the number of shares of Issuer Common Stock then issued and outstanding, without
giving effect to any shares subject to or issued pursuant to the Option.
(b) In the event that Issuer shall enter in an agreement: (i) to
consolidate with or merge into any person, other than Grantee or one of its
subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person, other than Grantee or one of
its subsidiaries, to merge into Issuer and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the then outstanding
shares of Issuer Common Stock shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property or
the outstanding shares of Issuer Common Stock immediately prior to such merger
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the merged company, or (iii) to sell or otherwise transfer
all or substantially all of its assets to any person, other than Grantee or one
of its subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provisions so that upon the consummation of any
such transaction and upon the terms and conditions set forth herein, Grantee
shall receive for each Option Share with respect to which the Option has not
been exercised an amount of consideration in the form of and equal to the per
share amount of consideration that would be received by the holder of one share
of Issuer Common Stock less the Purchase Price (and, in the event of an election
or similar arrangement with respect to the type of consideration to be received
by the holders of Issuer Common Stock, subject to the foregoing, proper
provision shall be made so that the holder of the Option would have the same
election or similar rights as would the holder of the number of shares of Issuer
Common Stock for which the Option is then exercisable).
8. Registration Rights.
(a) Demand Registration Rights. Issuer shall, subject to the
conditions of subparagraph (c) below, if requested by Grantee, as expeditiously
as possible prepare and file a registration statement under the 1933 Act if such
registration is necessary in order to permit the sale or other disposition of
any or all shares of Issuer Common Stock or other securities that have been
acquired by or are issuable to Grantee upon exercise of the Option in accordance
with the intended method of sale or other disposition stated by Grantee in such
request, including without limitation a "shelf" registration statement under
Rule 415 under the 1933 Act or any successor provision, and Issuer shall use its
best efforts to qualify such shares or other securities for sale under any
applicable state securities laws.
(b) Additional Registration Rights. If Issuer at any time after the
exercise of the Option proposes to register any shares of Issuer Common Stock
under the 1933 Act in connection with an underwritten public offering of such
Issuer Common Stock, Issuer will promptly give written notice to Grantee (and
any permitted transferee) of its intention to do so and, upon the written
request of Grantee (or any such permitted transferee of Grantee) given within 30
days after receipt of any such notice (which request shall specify the number of
shares of Issuer Common Stock intended to be included in such underwritten
public offering by Grantee (or such permitted transferee)), Issuer will cause
all such shares, the holders of which shall have requested participation in such
registration, to be so registered and included in such underwritten public
offering; provided, however, that Issuer may elect to not cause any such shares
to be so registered (i) if the underwriters in good faith object for valid
business reasons, or (ii) in the case of a registration solely to implement an
employee benefit plan or a registration filed on Form S-4; provided, further,
however, that such election pursuant to (i) may only be made one time. If some
but not all the shares of Issuer Common Stock, with respect to which Issuer
shall have received requests for registration pursuant to this subparagraph (b),
shall be excluded from such registration, Issuer shall make appropriate
allocation of shares to be registered among Grantee and any other person (other
than the Issuer) who or which is permitted to register their shares of Issuer
Common Stock in connection with such registration pro rata in the proportion
that the number of shares requested to be registered by each such holder bears
to the total number of shares requested to be registered by all such holders
then desiring to have Issuer Common Stock registered for sale.
(c) Conditions to Required Registration. Issuer shall use all
reasonable efforts to cause each registration statement referred to in
subparagraph (a) above to become effective and to obtain all consents or waivers
of other parties which are required therefor and to keep such registration
statement effective; provided, however, that Issuer may delay any registration
of Option Shares required pursuant to subparagraph (a) above for a period not
exceeding 90 days provided Issuer shall in good faith determine that any such
registration would adversely affect an offering or contemplated offering of
other securities by Issuer, and Issuer shall not be required to register Option
Shares under the 1933 Act pursuant to subparagraph (a) above:
(i) prior to the earliest of (A) termination of the Plan, and
(B) a Purchase Event or a Preliminary Purchase Event;
(ii) on more than two occasions;
(iii) more than once during any calendar year;
(iv) within 90 days after the effective date of a registration
referred to in subparagraph (b) above pursuant to which the holder or
holders of the Option Shares concerned were afforded the opportunity to
register such shares under the 1933 Act and such shares were registered as
requested; and
(v) unless a request therefor is made to Issuer by the holder or
holders of at least 25% or more of the aggregate number of Option Shares
then outstanding.
In addition to the foregoing, Issuer shall not be required to maintain the
effectiveness of any registration statement after the expiration of 120 days
from the effective date of such registration statement. Issuer shall use all
reasonable efforts to make any filings, and take all steps, under all applicable
state securities laws to the extent necessary to permit the sale or other
disposition of the Option Shares so registered in accordance with the intended
method of distribution for such shares, provided, however, that Issuer shall not
be required to consent to general jurisdiction or qualify to do business in any
state where it is not otherwise required to so consent to such jurisdiction or
to so qualify to do business.
(d) Expenses. Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses, accounting
expenses and printing expenses incurred by it) in connection with each
registration pursuant to subparagraph (a) or (b) above and all other
qualifications, notifications or exemptions pursuant to subparagraph (a) or (b)
above. Underwriting discounts and commissions relating to Option Shares, fees
and disbursements of counsel to the holders of Option Shares being registered
and any other expenses incurred by such holders in connection with any such
registration shall be borne by such holders.
(e) Indemnification. In connection with any registration under
subparagraph (a) or (b) above, Issuer hereby indemnifies the holder of the
Option Shares, and each underwriter thereof, including each person, if any, who
controls such holder or underwriter within the meaning of Section 15 of the 1933
Act, against all expenses, losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement of a material fact contained in any
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such expenses, losses, claims, damages or
liabilities of such indemnified party are caused by any untrue statement or
alleged untrue statement that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon and in conformity with,
information furnished in writing to Issuer by such indemnified party expressly
for use therein, and Issuer and each officer, director and controlling person of
Issuer shall be indemnified by such holder of the Option Shares, or by such
underwriter, as the case may be, for all such expenses, losses, claims, damages
and liabilities caused by any untrue, or alleged untrue, statement that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon, and in conformity with, information furnished in
writing to Issuer by such holder or such underwriter, as the case may be,
expressly for such use.
Promptly upon receipt by a party indemnified under this subparagraph (e) of
notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this subparagraph (e), such indemnified party shall
notify the indemnifying party in writing of the commencement of such action,
but, except to the extent of any actual prejudice to the indemnifying party, the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
subparagraph (e). In case notice of commencement of any such action shall be
given to the indemnifying party as above provided, the indemnifying party shall
be entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory
to such indemnified party. The indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be paid by the indemnified party unless (i) the
indemnifying party agrees to pay the same, (ii) the indemnifying party fails to
assume the defense of such action with counsel reasonably satisfactory to the
indemnified party, or (iii) the indemnified party has been advised by counsel
that one or more legal defenses may be available to the indemnifying party that
may be contrary to the interest of the indemnified party, in which case the
indemnifying party shall be entitled to assume the defense of such action
notwithstanding its obligation to bear fees and expenses of such counsel. No
indemnifying party shall be liable for any settlement entered into without its
consent, which consent may not be unreasonably withheld.
If the indemnification provided for in this subparagraph (e) is unavailable
to a party otherwise entitled to be indemnified in respect of any expenses,
losses, claims, damages or liabilities referred to herein, then the indemnifying
party, in lieu of indemnifying such party otherwise entitled to be indemnified,
shall contribute to the amount paid or payable by such party to be indemnified
as a result of such expenses, losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative benefits received by
Issuer, the selling shareholders and the underwriters from the offering of the
securities and also the relative fault of Issuer, the selling shareholders and
the underwriters in connection with the statements or omissions which resulted
in such expenses, losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The amount paid or payable by a party as a
result of the expenses, losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim; provided however, that in no case shall the holders of the Option
Shares be responsible, in the aggregate, for any amount in excess of the net
offering proceeds attributable to its Option Shares included in the offering.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Any obligation by any holder
to indemnify shall be several and not joint with other holders.
In connection with any registration pursuant to subparagraph (a) or (b)
above, Issuer and each holder of any Option Shares (other than Grantee) shall
enter into an agreement containing the indemnification provisions of this
subparagraph (e).
(f) Miscellaneous Reporting. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by the holder thereof in
accordance with and to the extent permitted by any rule or regulation permitting
non-registered sales of securities promulgated by the SEC from time to time,
including, without limitation, Rule 144A under the 1933 Act. Issuer shall at
its expense provide the holder of any Option Shares with any information
necessary in connection with the completion and filing of any reports or forms
required to be filed by them under the 1933 Act or the 1934 Act, or required
pursuant to any state securities laws or the rules of any stock exchange.
(g) Issue Taxes. Issuer will pay all stamp taxes in connection with
the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save Grantee harmless, without limitation as to
time, against any and all liabilities, with respect to all such taxes.
9. Quotation; Listing. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then authorized for quotation or
trading or listing on The Nasdaq National Market or any securities exchange,
Issuer, upon the request of Grantee, will promptly file an application, if
required, to authorize for quotation or trading or listing the shares of Issuer
Common Stock or other securities to be acquired upon exercise of the Option on
The Nasdaq National Market or such other securities exchange and will use its
best efforts to obtain approval, if required, of such quotation or listing as
soon as practicable.
10. Division of Option. Upon the occurrence of a Purchase Event or a
Preliminary Purchase Event, this Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of Grantee, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
11. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 8, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement: No Third-Party Beneficiary; Severability. This
Agreement, together with the Plan and the other documents and instruments
referred to herein and therein, between Grantee and Issuer (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof,
and (ii) is not intended to confer upon any person other than the parties hereto
(other than any transferees of the Option Shares or any permitted transferee of
this Agreement pursuant to Section 11(h)) any rights or remedies hereunder. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or a federal or state regulatory agency to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the Option does not
permit Grantee to acquire, or does not require Issuer to repurchase, the full
number of shares of Issuer Common Stock as provided in Section 3 (as adjusted
pursuant to Section 7), it is the express intention of Issuer to allow Grantee
to acquire or to require Issuer to repurchase such lesser number of shares as
may be permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Virginia without regard to any
applicable conflicts of law rules.
(e) Descriptive Heading. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Issuer to: TideMark Bancorp, Inc.
301 Hiden Boulevard
Newport News, Virginia 23606
Attention: Gordon L. Gentry, Jr. Chairman
with a copy to: Elias, Matz, Ternan & Herrick
12th Floor, The Walker Building
734 15th Street, N.W.
Washington, D.C. 20005
Attention:
If to Grantee to: Crestar Financial Corporation
919 East Main Street
Richmond, VA 23219
Attention: John C. Clark, III
Corporate Senior Vice
President, General Counsel
and Corporate Secretary
with a copy to: Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
Attention: Lathan M. Ewers, Jr.
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned subsidiary of Grantee and Grantee may assign its
rights hereunder in whole or in part after the occurrence of a Purchase Event.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit and be enforceable by the parties and their respective successors
and assigns.
(i) Further Assurances. In the event of any exercise of the Option
by Grantee, Issuer and Grantee shall execute and deliver all other documents
and instruments and take all other action that may be reasonably necessary in
order to consummate the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such equitable relief and that this provision is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
TIDEMARK BANCORP, INC.
By:
Gordon L. Gentry, Jr.
Chairman of the Board
CRESTAR FINANCIAL CORPORATION
By:
C. Garland Hagen
Corporate Executive Vice
President - Investment Bank
