-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Xn9kpxWkCdug6T7E9sMW0r4oDCgOJ0wwN9y439zQnkQ+7cCIvnBk0iiReXupi3le k177xeG4Jb2j8maNr01lIw== 0000908184-95-000021.txt : 19950509 0000908184-95-000021.hdr.sgml : 19950509 ACCESSION NUMBER: 0000908184-95-000021 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19950508 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CRESTAR FINANCIAL CORP CENTRAL INDEX KEY: 0000101880 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 540722175 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-17519 FILM NUMBER: 95535145 BUSINESS ADDRESS: STREET 1: 919 E MAIN ST STREET 2: PO BOX 26665 CITY: RICHMOND STATE: VA ZIP: 23261 BUSINESS PHONE: 8047825000 MAIL ADDRESS: STREET 1: 919 EAST MAIN STREET STREET 2: P O BOX 26665 CITY: RICHMOND STATE: VA ZIP: 23261-6665 FORMER COMPANY: FORMER CONFORMED NAME: UNITED VIRGINIA BANKSHARES INC DATE OF NAME CHANGE: 19871115 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CRESTAR FINANCIAL CORP CENTRAL INDEX KEY: 0000101880 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 540722175 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 919 E MAIN ST STREET 2: PO BOX 26665 CITY: RICHMOND STATE: VA ZIP: 23261 BUSINESS PHONE: 8047825000 MAIL ADDRESS: STREET 1: 919 EAST MAIN STREET STREET 2: P O BOX 26665 CITY: RICHMOND STATE: VA ZIP: 23261-6665 FORMER COMPANY: FORMER CONFORMED NAME: UNITED VIRGINIA BANKSHARES INC DATE OF NAME CHANGE: 19871115 SC 13D 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ SCHEDULE 13D Under the Securities Exchange Act of 1934 Loyola Capital Corporation (Name of Issuer) Common Stock (Title of Class of Securities) 549089100 (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) April 27, 1995 (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. (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) CUSIP No. 549089100 13D Page 2 of 12 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) 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 BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,613,442 shares of Loyola Capital Corporation 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 April 27, 1995 Loyola Capital Corporation has granted an option to Crestar, exercisable in certain events, to purchase up to 1,613,442 newly issued shares of Loyola Capital Corporation Common Stock, representing (on a post-purchase basis) approximately 19.9% of Loyola Capital Corporation Common Stock. ITEM 1. Security and Issuer. The title of the class of equity securities to which this Schedule relates is Loyola Capital Corporation Common Stock ("Loyola Common Stock"). Loyola Capital Corporation ("Loyola") is a Maryland chartered thrift holding company for Loyola Savings Bank FSB, a federally chartered savings association. The address of Loyola's principal executive offices is 1300 North Charles Street, Baltimore, Maryland 21201. 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: Directors and Director/Officers: Richard M. Bagley President of Bagley Investment Company P. O. Box 9 Hampton, VA 23669 J. Carter Fox President and Chief Executive Officer of Chesapeake Corporation P. O. Box 2350 Richmond, VA 23218-2350 Bonnie Guiton Hill Dean of the McIntire School of Commerce Monroe Hall University of Virginia Charlottesville, VA 22903 Gene A. James President and Chief Executive Officer of Southern States Cooperative, Inc. P. O. Box 26234 Richmond, VA 23260 H. Gordon Leggett, Jr. Executive Vice President of Leggett Stores P. O. Box 10398 Lynchburg, VA 24506 Charles R. Longworth Chairman, President and Chief Executive Officer of The Colonial Williamsburg Foundation P. O. Box 8 Williamsburg, VA 23187 Patrick J. Maher President and Chief Executive Officer of Washington Gas 1100 H Street, N.W. Washington, D.C. 20080 Frank E. McCarthy Executive Vice President of National Automobile Dealers Association 8400 Westpark Drive McLean, VA 22102 G. Gilmer Minor, III President and Chief Executive Officer of Owens & Minor, Inc. P. O. Box 27626 Richmond, VA 23261 Gordon F. Rainey, Jr. Partner of Hunton & Williams 951 East Byrd Street Richmond, VA 23219 Frank S. Royal, M.D. President and Member of Frank S. Royal, M.D., P.C. 1122 North 25th Street Suite A Richmond, VA 23223 Richard G. Tilghman Chairman and Chief Executive Officer of Crestar 919 East Main Street Richmond, VA 23219 Eugene P. Trani President of Virginia Commonwealth University 910 West Franklin Street Richmond, VA 23284 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: William K. Butler, II President - Eastern Region Crestar Financial Corporation 919 East Main Street Richmond, VA 23219 William M. Ginther Group Executive Vice President - Technology & Operations Crestar Financial Corporation 919 Eat Main Street Richmond, VA 23219 C. Garland Hagen Corporate Executive Vice President - Investment Bank Crestar Financial Corporation 919 East Main Street Richmond, VA 23219 F. Edward Harris President - Western Region Crestar Financial Corporation 919 East Main Street Richmond, VA 23219 William C. Harris Corporate Executive Vice President & President Greater Washington Banking Crestar Financial Corporation 919 East Main Street Richmond, VA 2321 C.T. Hill President - Capital Region Crestar Financial Corporation 919 East Main Street Richmond, VA 232199 James J. Kelly Group Executive Vice President Management Resources Group Crestar Financial Corporation 919 East Main Street Richmond, VA 23219 Robert F. Norfleet, Jr. 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 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 Loyola 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 $40,336,050. ITEM 4. Purpose of Transaction. On April 27, 1995, the Board of Directors of Crestar approved a Letter Agreement (the "Letter Agreement") dated April 27, 1995, between Loyola and Crestar; Loyola's Board had authorized its chief executive officer to enter into the Letter Agreement. The Letter Agreement is to be merged into a definitive acquisition agreement prior to May 31, 1995. Loyola will be merged into Crestar, with Crestar as the surviving corporation (the "Merger"). In connection with the Merger, each share of Loyola Common Stock outstanding immediately prior to consummation of the Merger (other than shares held by Crestar) will be converted into and represent the right to receive shares of common stock of Crestar ("Crestar Common Stock"). In the Merger, each share of Loyola Common Stock will be converted into a fraction of a share of Crestar Common Stock, determined in accordance with the Exchange Ratio. The "Exchange Ratio" will be calculated as follows: (a) if the Average Closing Price (as defined below) is between $43.478 and $46.375, the Exchange Ratio shall be 0.690 (the quotient of (A) $32.00 divided by (B) $46.375). (b) if the Average Closing Price is greater than $46.375, the Exchange Ratio shall be the quotient of (A) $32.00 divided by (B) the Average Closing Price, rounded to the nearest one-one thousandth of a share, provided that the Exchange Ratio shall not be less than 0.640. (c) if the Average Closing Price is less than $43.478, the Exchange Ratio shall be the quotient of (A) $30.00 divided by (B) the Average Closing Price, rounded to the nearest one-one thousandth of a share, provided that the Exchange Ratio shall not be greater than 0.750. The Agreement may be terminated by Loyola, by action of its Board of Directors, at any time during the five-day period prior to the fifth day prior to the closing date, if the Average Closing Price is less than $40.00, provided, however, that Crestar shall have the option of increasing the consideration to be received by holders of Loyola Common Stock hereunder by adjusting the Exchange Ratio to a number equal to a quotient, the numerator of which is the product of $40.00 times the Exchange Ratio then in effect and the denominator of which is the Average Closing Price. In such case, Crestar shall give prompt written notice to Loyola of such election and of the revised Exchange Ratio, and in such event no termination shall be deemed to have occurred and the Agreement shall remain in full force and effect in accordance with its terms. As used herein, "Average Closing Price" shall mean 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 tenth day prior to the closing date. At the effective time of the Merger, Outstanding Options (as defined in the Letter Agreement) granted by Loyola to purchase shares of Loyola Common Stock which are unexercised immediately prior thereto shall be converted as to each whole share subject to such Outstanding Option into an option (each, an "Exchange Option") to purchase such number of shares of Crestar common stock at such exercise price as is determined as provided below (and otherwise having the same duration, tax consequences, and other terms as the Outstanding Option): (a) the number of shares of Crestar Common Stock to be subject to the Exchange Option shall be equal to the product of (A) the number of shares of the Loyola Common Stock subject to the Outstanding Option multiplied by (B) the Exchange Ratio, the product being rounded, if necessary, up or down, to the nearest whole share; (b) the per share exercise price under the Exchange Option shall be equal to (A) the per share exercise price under the Outstanding Option divided by (B) the Exchange Ratio, with any fractional cent rounded up to the next whole cent. Consummation of the Merger will be subject to certain usual conditions, including (i) negotiation of a definitive agreement (ii) approval by Loyola shareholders; (iii) receipt of all requisite regulatory approvals; and (iv) 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 and, (iii) either party if the Merger is not consummated by March 31, 1996. Crestar and Loyola have entered into a Stock Option Agreement, dated as of April 27, 1995 ("Option Agreement"), pursuant to which Loyola issued to Crestar an option (the "Option") to purchase up to 1,613,442 shares of Loyola Common Stock at a purchase price of $25.00 per share. Crestar may exercise the Option upon the occurrence of certain events ("Purchase Events"). The Option Agreement provides that a Purchase Event shall mean the occurrence of any of the following events after the date of execution of the Option Agreement: (i) Loyola, without having received Crestar's prior written consent, shall have entered into an agreement with any person to (x) merge, consolidate or enter into any similar transaction with Loyola except as contemplated in the Letter Agreement and the definitive agreement; (y) purchase, lease or otherwise acquire all or substantially all of the assets of Loyola; or (z) purchase or otherwise acquire (including by way of merger, consolidation, share exchange or any similar transaction) securities representing 15% or more of the voting power of Loyola; (ii) any person (other than Crestar and its subsidiary banks in a fiduciary capacity, or Loyola and Loyola Savings Bank FSB in a fiduciary capacity) shall have acquired beneficial ownership or the right to acquire beneficial ownership of 15% or more of the outstanding shares of Loyola Common Stock; (iii) any person shall have made a bona fide proposal to Loyola by public announcement or written communication that is or becomes the subject of public disclosure to acquire Loyola or Loyola Savings Bank FSB by merger, consolidation, purchase of all or substantially all of its assets or any other similar transaction, and following such bona fide proposal the shareholders of Loyola vote not to adopt the Merger; or (iv) Loyola shall have willfully breached certain specified covenants contained in the Letter Agreement or the definitive agreement following a bona fide proposal to acquire by merger, consolidation, purchase of all or substantially all of its assets or any other similar transaction, which breach would entitle Crestar to terminate the Letter Agreement or the definitive agreement (without regard to the cure periods provided for therein) and such breach shall not have been cured prior to the date on which Crestar shall notify Loyola of its intent to exercise the Option. The Option may be exercised in whole or in part, at one or more closings, and may be exercised at any time if a Purchase Event shall have occurred and be continuing and before the Option Agreement is terminated, unless Crestar shall have breached in any material respect any material covenant or representation contained in the Letter Agreement or the definitive agreement and such breach has not been cured. The Option Agreement provides that to the extent that it shall have not been exercised, the Option shall terminate (i) on the effective date of the Merger; (ii) upon the termination of the Letter Agreement or the definitive agreement in accordance with the provisions thereof (other than a termination resulting from a willful breach by Loyola of certain specified covenants contained therein or, following the occurrence of a Purchase Event, failure of Loyola's shareholders to approve the Merger by the vote required under applicable law); or (iii) 12 months after termination of the definitive agreement due to a willful breach by Loyola of certain specified covenants contained therein or, following the occurrence of a Purchase Event, failure of Loyola's shareholders to approve the Merger by the vote required under applicable law. The Letter Agreement and the Option Agreement are attached as exhibits and are incorporated 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 Letter 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 Loyola, or the disposition of securities of Loyola; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Loyola or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of Loyola or any of its subsidiaries; (d) any change in the present board of directors or management of Loyola, 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 Loyola; (f) any other material change in Loyola's business or corporate structure; (g) changes in Loyola's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of Loyola by any person; (h) causing a class of securities of Loyola 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 Loyola 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 1,613,442 shares of Loyola Common Stock would be owned by Crestar upon exercise of the Option, representing approximately 19.9% of Loyola Common Stock (on a post-purchase basis). Neither Crestar nor any director or officer of Crestar identified in Item 2 owns any other shares of Loyola Common Stock and has the right to purchase any other shares of Loyola Common Stock. (b) Crestar does not possess sole or shared voting and dispositive power over any of the shares of Loyola Common Stock covered by this Schedule. (c) No transactions in Loyola Common Stock other than those reported in this Schedule have been effected by Crestar, or, to the knowledge of Crestar, any director or officer of Crestar identified in Item 2, 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 Option Agreement and the Letter Agreement. ITEM 7. Material to be Filed as Exhibits. Filed herewith are these exhibits: (a) Letter Agreement dated April 27, 1995, among Crestar, Crestar Bank and Loyola. (b) Stock Option Agreement, dated as of April 27, 1995, between Crestar and Loyola. 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: May 8, 1995 CRESTAR FINANCIAL CORPORATION By /s/ John C. Clark, III John C. Clark, III, Senior Vice President and General Counsel EX-99 2 LETTER AGREEMENT April 27, 1995 HIGHLY CONFIDENTIAL Board of Directors Loyola Capital Corporation 1300 North Charles Street Baltimore, Maryland 21201 Attention:Joseph W. Mosmiller Chairman of the Board and Chief Executive Officer Ladies and Gentlemen: On behalf of Crestar Financial Corporation ("Crestar"), I am pleased to make the following binding offer to acquire Loyola Capital Corporation ("Loyola") on the terms set forth in this letter. 1. Structure; Valuation and Consideration; Loyola Capitalization. The transaction would be structured as a statutory merger of Loyola into Crestar (the "Merger"). Crestar and Loyola would use their best efforts to make the Merger effective on or before January 31, 1996, or, if applicable law or regulatory authorities do not permit the Merger to be effective by this date, as soon as practicable thereafter, but not later than March 31, 1996. In the Merger, each share of Loyola common stock shall be converted into a fraction of a share of Crestar common stock, determined in accordance with the Exchange Ratio. The "Exchange Ratio" shall be calculated as follows: (a) if the Average Closing Price (as defined below) is between $43.478 and $46.375, the Exchange Ratio shall be 0.690 (the quotient of (A) $32.00 divided by (B) $46.375). (b) if the Average Closing Price is greater than $46.375, the Exchange Ratio shall be the quotient of (A) $32.00 divided by (B) the Average Closing Price, rounded to the nearest one-one thousandth of a share, provided that the Exchange Ratio shall not be less than 0.640. (c) if the Average Closing Price is less than $43.478, the Exchange Ratio shall be the quotient of (A) $30.00 divided by (B) the Average Closing Price, rounded to the nearest one-one thousandth of a share, provided that the Exchange Ratio shall not be greater than 0.750. The Agreement may be terminated by Loyola, by action of its Board of Directors, at any time during the five-day period prior to the fifth day prior to the closing date, if the Average Closing Price is less than $40.00, provided, however, that Crestar shall have the option of increasing the consideration to be received by holders of Loyola common stock hereunder by adjusting the Exchange Ratio to a number equal to a quotient, the numerator of which is the product of $40.00 times the Exchange Ratio then in effect and the denominator of which is the Average Closing Price. In such case, Crestar shall give prompt written notice to Loyola of such election and of the revised Exchange Ratio, and in such event no termination shall be deemed to have occurred and the Agreement shall remain in full force and effect in accordance with its terms. As used herein, "Average Closing Price" shall mean 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 tenth day prior to the closing date. At March 31, 1995, Loyola had 8,107,750 shares of common stock issued and outstanding and outstanding options ("Outstanding Options") covering 1,080,567 shares of Loyola common stock. Except for shares that may become issuable pursuant to the Stock Option Agreement (referred to below) and shares issued upon exercise of Outstanding Options, no additional shares of Loyola common stock or Loyola preferred stock have been issued through the date hereof or will be issued, and no options for Loyola common stock or Loyola preferred stock have been granted since March 31, 1995, and none will be granted, between the date of this letter and the effective date of the Merger. 2. Loyola Options. At the effective time of the Merger, Outstanding Options granted by Loyola to purchase shares of Loyola common stock which are unexercised immediately prior thereto shall be converted as to each whole share subject to such Outstanding Option into an option (each, an "Exchange Option") to purchase such number of shares of Crestar common stock at such exercise price as is determined as provided below (and otherwise having the same duration, tax consequences, and other terms as the Outstanding Option): (a) the number of shares of Crestar common stock to be subject to the Exchange Option shall be equal to the product of (A) the number of shares of the Loyola common stock subject to the Outstanding Option multiplied by (B) the Exchange Ratio, the product being rounded, if necessary, up or down, to the nearest whole share; (b) the per share exercise price under the Exchange Option shall be equal to (A) the per share exercise price under the Outstanding Option divided by (B) the Exchange Ratio, with any fractional cent rounded up to the next whole cent. 3. 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 Loyola would negotiate the Agreement in good faith, and we believe we should be able to execute the Agreement by May 15, 1995. If we are unable to execute the Agreement by May 31, 1995, however, either Crestar or Loyola may terminate this letter of agreement, with no liability one 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 concerning the Merger, the absence in all orders, decrees or advisory letters of regulatory authorities concerning the Merger of any conditions or requirements reasonably deemed objectionable to Crestar, and the absence of any actual or threatened litigation under federal antitrust laws. Crestar and Loyola agree to cooperate in taking all reasonable necessary steps to obtain regulatory and corporate approvals, including, as respects any meeting of Loyola shareholders, the favorable vote of holders of the requisite majority of outstanding Loyola Common Stock. At the signing of the definitive Agreement, the members of Loyola's board of directors would agree to vote their shares in favor of the Merger. (e) The receipt by Crestar and Loyola of opinions of their respective counsel to the effect that the Merger constitutes a tax-free reorganization for federal income tax purposes. (f) The taking by Crestar and Loyola of all corporate action necessary for the Merger by (i) the board of directors and shareholders of Loyola and (ii) the board of directors of Crestar, as and to the extent required by law and their respective charters and bylaws. (g) Receipt by Crestar prior to execution of the Agreement of an acceptable letter from KPMG Peat Marwick to the effect that the Merger can be accounted for as a "pooling of interests." 4. Indemnification. Crestar acknowledges its obligation to provide, and agrees to provide, indemnification to the directors and officers of Loyola following the effective date of the Merger to the same extent as if Loyola were maintaining its separate existence after such time. 5. General Condition; PreMerger Review; Operating Synergies. The obligation of Crestar to consummate the Merger would be subject to the condition that, on the effective date of the Merger, since March 31, 1995, there shall have been no change not previously agreed to by Crestar in Loyola's capital structure, dividend policy, stock option plans, material contracts, branches, credit policies, loan charge-off policies, reserve requirements and securities portfolio management policies, all to be described in detail in the Agreement. Without the approval of Crestar, Loyola shall not make any change in the 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 enter into the Agreement is subject to a review (at Crestar's expense and with the full cooperation of Loyola) to confirm the accuracy of Loyola's representations and warranties to be contained in the Agreement. With appropriate exceptions and without effect on Loyola's incentive bonus program, Loyola'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 Loyola's books and records in this undertaking. Loyola shall be under no obligation to make any adjustments until such time as all terms and conditions of the Agreement have been satisfied in full and all contingencies to closing have been eliminated. 6. Other Proposals. Between the date of this letter and the earlier of the termination of this letter or the execution of the Agreement, Loyola shall not, and Loyola shall use its best efforts to ensure that its directors, officers and advisors do not, institute, pursue, or, subject to the fiduciary obligations of Loyola's Board of Directors to its shareholders, enter into any discussions, negotiations, or agreements (whether preliminary or definitive) with any person or entity other than Crestar contemplating or providing for any merger, share exchange, acquisition, purchase or sale of a significant amount of assets, or other business combination or change in control of Loyola. 7. Expenses. 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. 8. Stock Option Agreement. Simultaneously with the execution of this binding letter of agreement, Crestar and Loyola are entering into a Stock Option Agreement pursuant to which Loyola will grant Crestar an option to purchase 1,613,442 of its authorized but unissued shares of common stock at $25.00 cash per share, exercisable in certain events. 9. Termination. The Agreement will provide for termination in the event the Merger is not consummated by March 31, 1996. 10. Binding Letter of 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 binding letter of agreement will be merged. Very truly yours, CRESTAR FINANCIAL CORPORATION By /s/ Richard G. Tilghman Richard G. Tilghman Chairman of the Board and Chief Executive Officer Accepted and agreed to pursuant to authorization of the Board of Directors LOYOLA CAPITAL CORPORATION By /s/ Joseph W. Mosmiller Joseph W. Mosmiller Chairman of the Board and Chief Executive Officer Dated: April 27, 1995 EX-99 3 STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT This STOCK OPTION AGREEMENT ("Option Agreement") dated as of April 27, 1995, between LOYOLA CAPITAL CORPORATION ("Loyola"), a Maryland corporation, and CRESTAR FINANCIAL CORPORATION ("Crestar"), a Virginia corporation, recites and provides: A. The Boards of Directors of Loyola and Crestar have approved a binding letter of agreement dated April 27, 1995 (the "Letter Agreement") (to be merged into a definitive agreement (the "Merger Agreement")) providing for the merger (the "Merger") of Loyola with and into Crestar. B. As a condition to and as consideration for Crestar's entry into the Letter Agreement and the Merger Agreement and to induce such entry, Loyola has agreed to grant to Crestar the option set forth herein to purchase authorized but unissued shares of Loyola Common Stock. NOW, THEREFORE, the parties agree as follows: 1. Definitions. Capitalized terms defined in the Letter Agreement or the Merger Agreement and used herein shall have the same meanings as in the Letter Agreement or the Merger Agreement, as the case may be. 2. Grant of Option. Subject to the terms and conditions set forth herein, Loyola hereby grants to Crestar an option (the "Option") to purchase up to 1,613,442 shares of Loyola Common Stock at an exercise price of $25.00 per share payable in cash as provided in Section 4; provided, however, that in the event Loyola issues or agrees to issue any shares of Loyola Common Stock (other than as permitted under the Letter Agreement and the Merger Agreement) at a price less than $25.00 per share (as adjusted pursuant to Section 6), the exercise price shall be such lesser price. 3. Exercise of Option. (a) Unless Crestar shall have breached in any material respect any material covenant or representation contained in the Letter Agreement or the Merger Agreement and such breach has not been cured, Crestar may exercise the Option, in whole or part, at any time or from time to time if a Purchase Event (as defined below) shall have occurred and be continuing; provided that to the extent the Option shall not have been exercised, it shall terminate and be of no further force and effect (i) on the Effective Date of the Merger, or (ii) upon termination of the Letter Agreement or the Merger Agreement in accordance with the provisions thereof (other than a termination resulting from a willful breach by Loyola of any Specified Covenant or, following the occurrence of a Purchase Event, failure of Loyola's stockholders to approve the Merger Agreement by the vote required under applicable law or under Loyola's Charter), or (iii) 12 months after termination of the Letter Agreement or the Merger Agreement due to a willful breach by Loyola of any Specified Covenant or, following the occurrence of a Purchase Event, failure of Loyola's stockholders to approve the Merger Agreement by the vote required under applicable law or under Loyola's Charter. Any exercise of the Option shall be subject to compliance with applicable provisions of law. (b) As used herein, a "Purchase Event" shall mean any of the following events or transactions occurring after the date hereof: (i) Loyola or Loyola Federal Savings Bank (the "Savings Bank"), without having received Crestar's prior written consent, shall have entered into an agreement with any person (x) to merge or consolidate, or enter into any similar transaction, except as contemplated in the Letter Agreement or the Merger Agreement, (y) to purchase, lease or otherwise acquire all or substantially all of the assets of Loyola or the Savings Bank, or (z) to purchase or otherwise acquire (including by way of merger, consolidation, share exchange or any similar transaction) securities representing 10% or more of the voting power of Loyola or the Savings Bank; (ii) any person (other than Loyola or the Savings Bank in a fiduciary capacity, or Crestar, Crestar Bank, Crestar Bank N.A. or Crestar Bank MD in a fiduciary capacity) shall have acquired beneficial ownership or the right to acquire beneficial ownership of 15% or more of the outstanding shares of Loyola Common Stock after the date hereof (the term "beneficial ownership" for purposes of this Option Agreement having the meaning assigned thereto in Section 13(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and the regulations promulgated thereunder); (iii) any person shall have made a bona fide proposal to Loyola by public announcement or written communication that is or becomes the subject of public disclosure to acquire Loyola or Savings Bank by merger, consolidation, purchase of all or substantially all of its assets or any other similar transaction, and following such bona fide proposal the stockholders of Loyola vote not to adopt the Merger Agreement; or (iv) Loyola shall have willfully breached any Specified Covenant following a bona fide proposal to Loyola or the Savings Bank to acquire Loyola or the Savings Bank by merger, consolidation, purchase of all or substantially all of its assets or any other similar transaction, which breach would entitle Crestar to terminate the Letter Agreement or the Merger Agreement (without regard to the cure periods provided for therein) and such breach shall not have been cured prior to the Notice Date (as defined below). If more than one of the transactions giving rise to a Purchase Event under this Section 3(b) is undertaken or effected, then all such transactions shall give rise only to one Purchase Event, which Purchase Event shall be deemed continuing for all purposes hereunder until all such transactions are abandoned. As used in this Option Agreement, "person" shall have the meanings specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act. (c) In the event Crestar wishes to exercise the Option, it shall send to Loyola a written notice (the date of which being herein referred to as the "Notice Date") specifying (i) the total number of shares it will purchase pursuant to such exercise, and (ii) a place and date not earlier than three business days nor later than 60 business days after the Notice Date for the closing of such purchase ("Closing Date"); provided that if prior notification to or approval of any federal or state regulatory agency is required in connection with such purchase, Crestar shall promptly file the required notice or application for approval and shall expeditiously process the same and the period of time that otherwise would run pursuant to this sentence shall run instead from the date on which any required notification period has expired or been terminated or such approval has been obtained and any requisite waiting period shall have passed. (d) As used herein, "Specified Covenant" means any covenant contained in Section 6 of the Letter Agreement and Sections 1.8, 4.1, 4.2, 4.4, 4.5, 4.6, 4.8, 4.9, 4.11, or 4.13 of the draft Merger Agreement, the table of contents of which is attached hereto, and, after its execution, comparable provisions in the Merger Agreement. 4. Payment and Delivery of Certificates. (a) At the closing referred to in Section 3, Crestar shall pay to Loyola the aggregate purchase price for the shares of Loyola Common Stock purchased pursuant to the exercise of the Option in immediately available funds by a wire transfer to a bank account designated by Loyola. (b) At such closing, simultaneously with the delivery of funds as provided in subsection (a), Loyola shall deliver to Crestar a certificate or certificates representing the number of shares of Loyola Common Stock purchased by Crestar, and Crestar shall deliver to Loyola a letter agreeing that Crestar will not offer to sell or otherwise dispose of such shares in violation of applicable law or the provisions of this Option Agreement. (c) Certificates for Loyola Common Stock delivered at a closing hereunder may be endorsed with a restrictive legend which shall read substantially as follows: "The transfer of the shares represented by this certificate is subject to certain provisions of a Stock Option Agreement between the registered holder hereof and Loyola Capital Corporation and to resale restrictions arising under the Securities Act of 1933, as amended, a copy of which agreement is on file at the principal office of Loyola Capital Corporation. A copy of such agreement will be provided to the holder hereof without charge upon receipt by Loyola Capital Corporation of a written request." It is understood and agreed that the above legend shall be removed by delivery of substitute certificate(s) without such legend if Crestar shall have delivered to Loyola a copy of a letter from the staff of the Commission, or an opinion of counsel, in form and substance satisfactory to Loyola, to the effect that such legend is not required for purposes of the Securities Act. 5. Representations. Loyola represents, warrants and covenants to Crestar as follows: (a) Loyola shall at all times maintain sufficient authorized but unissued shares of Loyola Common Stock so that the Option may be exercised without authorization of additional shares of Loyola Common Stock. (b) The shares to be issued upon due exercise, in whole or in part, of the Option, when paid for as provided herein, will be duly authorized, validly issued, fully paid and nonassessable. 6. Adjustment Upon Changes in Capitalization. In the event of any change in Loyola Common Stock by reason of stock dividends, split-ups, mergers, recapitalizations, combinations, exchanges of shares or the like, the type and number of shares subject to the Option, and the purchase price per share, as the case may be, shall be adjusted appropriately. In the event that any additional shares of Loyola Common Stock are issued or otherwise become outstanding after the date of this Option Agreement (other than pursuant to this Option Agreement), the number of shares of Loyola Common Stock subject to the Option shall be adjusted so that, after such issuance, it equals 19.9% of the number of shares of Loyola Common Stock then issued and outstanding without giving effect to any shares subject or issued pursuant to the Option. Nothing contained in this Section 6 shall be deemed to authorize Loyola to breach any provision of the Letter Agreement or the Merger Agreement. 7. Registration Rights. If requested by Crestar, Loyola shall as expeditiously as possible file a registration statement on a form of general use under the Securities Act if necessary in order to permit the sale or other disposition of the shares of Loyola Common Stock that have been acquired upon exercise of the Option in accordance with the intended method of sale or other disposition requested by Crestar. Crestar shall provide all information reasonably requested by Loyola for inclusion in any registration statement to be filed hereunder. Loyola will use its best efforts to cause such registration statement first to become effective and then to remain effective for such period not in excess of 270 days from the day such registration statement first becomes effective as may be reasonably necessary to effect such sales or other dispositions. The first registration effected under this Section 7 shall be at Loyola's expense except for underwriting commissions and the fees and disbursements of Crestar's counsel attributable to the registration of such Loyola Common Stock. A second registration may be requested hereunder at Crestar's expense. In no event shall Loyola be required to effect more than two registrations hereunder. The filing of any registration statement hereunder may be delayed for such period of time as may reasonably be required to facilitate any public distribution by Loyola of Loyola Common Stock. If requested by Crestar, in connection with any such registration, Loyola will become a party to any underwriting agreement relating to the sale of such shares, but only to the extent of obligating itself in respect of representations, warranties, indemnities and other agreements customarily included in such underwriting agreements. Upon receiving any request from Crestar or assignee thereof under this Section 7, Loyola agrees to send a copy thereof to Crestar and to any assignee thereof known to Loyola, in each case by promptly mailing the same, postage prepaid, to the address of record of the persons entitled to receive such copies. 8. Severability. If any term, provision, covenant or restriction contained in this Option Agreement is held by a court or a federal or state regulatory agency of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions and covenants and restrictions contained in this Option 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 will not permit the holder to acquire the full number of shares of Loyola Common Stock provided in Section 2 (as adjusted pursuant to Section 6), it is the express intention of Loyola to allow the holder to acquire such lesser number of shares as may be permissible, without any amendment or modification hereof. 9. Miscellaneous. (a) Expenses. Except as otherwise provided herein, 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) Entire Agreement. Except as otherwise expressly provided herein, this Option Agreement contains the entire agreement between the parties with respect to the transactions contemplated hereunder and supersedes all prior arrangements or understandings with respect thereto, written or oral. The terms and conditions of this Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Nothing in this Option Agreement, expressed or implied, is intended to confer upon any party, other than the parties hereto, and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Option Agreement, except as expressly provided herein. (c) Assignment. Neither of the parties hereto may assign any of its rights or obligations under this Option Agreement or the Option created hereunder to any other person, without the express written consent of the other party, except that in the event a Purchase Event shall have occurred and be continuing Crestar may assign in whole or in part its rights and obligations hereunder; provided, however, that to the extent required by applicable regulatory authorities, Crestar may not assign its rights under the Option except in (i) a widely dispersed public distribution, (ii) a private placement in which no one party acquires the right to purchase in excess of 2% of the voting shares of Loyola, (iii) an assignment to a single party (e.g., a broker or investment banker) for the purpose of conducting a widely dispersed public distribution on Crestar's behalf, or (iv) any other manner approved by applicable regulatory authorities. (d) Notices. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered in the manner and to the addresses provided for in or pursuant to Section 8.4 of the draft Merger Agreement and, after its execution, the Merger Agreement. (e) Counterparts. This Option Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. (f) Specific Performance. The parties agree that damages would be an inadequate remedy for a breach of the provisions of this Option Agreement by either party hereto and that this Option Agreement may be enforced by either party hereto through injunctive or other equitable relief. (g) Governing Law. This Option Agreement shall be governed by and construed in accordance with the laws of Virginia applicable to agreements made and entirely to be performed within such state and such federal laws as may be applicable. IN WITNESS WHEREOF, each of the parties hereto has executed this Option Agreement as of the day and year first written above. LOYOLA CAPITAL CORPORATION By: /s/ Joseph W. Mosmiller Joseph W. Mosmiller Chairman of the Board and Chief Executive Officer CRESTAR FINANCIAL CORPORATION By: /s/ Richard G. Tilghman Richard G. Tilghman Chairman of the Board and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----