To Richard G. Tilghman, the SunTrust-Crestar merger agreement must seem to present the best of all possible worlds.

The chairman and chief executive officer of Crestar Financial Corp. would keep his job after the sale, yet could cash in his Crestar common and deferred stock under "change in control" provisions, according to people who advise banks on mergers.

Mr. Tilghman's Crestar stock would be worth about $15 million at current prices, based on recent proxy disclosures. SunTrust is offering to convert his Crestar shares to SunTrust stock and would convert his 474,000 options to SunTrust options, according to a Securities and Exchange Commission filing Tuesday.

Crestar declined to comment on Mr. Tilghman's plans for his holdings.

Though such post-merger windfalls are not unusual, it is rare for a bought-out company's CEO to keep his job. Many retire or serve as vice chairman for a transition period.

Of more concern to Wall Street, however, is what Mr. Tilghman's future status says about the $9.5 billion agreement SunTrust Banks Inc. struck with Crestar.

Critics in the investment community said the plan to let the Virginia bank keep its identity and management team under Mr. Tilghman smacks of hard decisions not taken.

The contention is that SunTrust is paying a hefty 31% premium above market price for what amounts to stock, but not control, of Crestar, and diluting its lofty price-earnings multiple in the process.

The market indeed reacted negatively-bidding SunTrust shares down 10% Monday and 2.8% Tuesday-which in turn would hurt Mr. Tilghman, 57, and others who stand to come away from the deal with favorable terms.

Alfred H. Smith Jr., former chairman and CEO of Citizens Bancorp, a Maryland banking company acquired by Crestar in 1996, is the largest shareholder on Crestar's board, with 1.15 million shares according to regulatory filings.

If Mr. Smith, 64, joins Mr. Tilghman and two other Crestar directors in moving to SunTrust's board and elects to convert all his Crestar stock to SunTrust, he would be the second-largest shareholder of the Atlanta-based holding company, behind only former chairman James B. Williams.

"The market reacted efficiently," Wheat First Union analyst Edward Najarian said of the SunTrust price drop in a note to investors Tuesday.

SunTrust chairman and CEO L. Phillip Humann said Monday that keeping Mr. Tilghman and top Crestar executives in their posts means the parent company is letting a team more experienced in handling mergers oversee the transition.

A person close to SunTrust added that Mr. Tilghman and top Crestar management would best be able to exploit the disruptions in the Virginia banking market caused by the recent entries through acquisitions there of First Union Corp. and Wachovia Corp.

Had SunTrust decided to clean out Crestar management, this source said, the market would likely be criticizing SunTrust for its lack of merger expertise.

Instead, the market is punishing SunTrust's stock because its executives recognized their weaknesses and agreed to pay a fat price for a company they will own at arm's length.

"The market can't have it both ways," the source grumbled.

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