-----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, O3rUfdoakrjGSK2GdFp9p2v+PRmsAQOccMXL3DF21DG79LnjCjBq8OCfpkGdkFto 1Wj1x+Sy4i0LvgWeJufBYQ== 0000916641-94-000109.txt : 19940930 0000916641-94-000109.hdr.sgml : 19940930 ACCESSION NUMBER: 0000916641-94-000109 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19940929 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TIDEMARK BANCORP, INC. CENTRAL INDEX KEY: 0000892432 STANDARD INDUSTRIAL CLASSIFICATION: 6035 IRS NUMBER: 541642520 STATE OF INCORPORATION: VA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-43335 FILM NUMBER: 94550909 BUSINESS ADDRESS: STREET 1: 301 HIDEN BLVD CITY: NEWPORT NEWS STATE: VA ZIP: 23606 BUSINESS PHONE: 8045991400 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CRESTAR FINANCIAL CORP CENTRAL INDEX KEY: 0000101880 STANDARD INDUSTRIAL CLASSIFICATION: 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 SCHEULE 13D 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) 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. 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) 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) 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) 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) 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) 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) (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) 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) 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) EX-99 2 EXH (A) - LETTER AGREEMENT 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 EX-99 3 EXH (B) - OPTION AGREEMENT 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 -----END PRIVACY-ENHANCED MESSAGE-----