EXHIBIT (10)(b)
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (the "Amendment"),
dated as of February 27, 1997, between PINNACLE FINANCIAL SERVICES, INC., a
Michigan corporation ("Pinnacle"), and INDIANA FEDERAL CORPORATION, a
Delaware corporation ("IFC").
W I T N E S S E T H:
WHEREAS, Pinnacle and IFC entered into an Agreement and Plan of Merger
dated November 14, 1996 (the "Agreement"), but subsequently have determined
that certain amendments to the Agreement are necessary and appropriate and
therefore wish to amend the Agreement as set forth herein;
NOW THEREFORE, in consideration of the premises and the mutual and
dependent promises hereinafter contained, the parties do represent, warrant,
covenant and agree as follows:
1. Section 1.11 of the Agreement shall be and hereby is amended and
restated in its entirety to read as follows:
"1.11 BOARD OF DIRECTORS. At the Effective Time, the persons who
shall be the directors of the Surviving Corporation shall be determined
as follows:
(a) In the event that the transactions provided for under the
terms of the Agreement and Plan of Merger (the "CB Merger Agreement")
between Pinnacle and CB Bancorp, Inc., a Delaware corporation ("CB"),
have been consummated and become effective, then the Board of Directors
of the Surviving Corporation shall consist of Xx. Xxxxxxx X. Xxxxxxx, as
well as Xx. Xxxxxx X. Xxxxxx and three (3) other persons named as directors
of the Surviving Corporation on behalf of the Board of Directors of
Pinnacle, and Xx. Xxxxxx X. Xxxxx, as well as Mr. Xxxxxx Xxxxxxxxx and
three (3) other persons named as directors of the Surviving Corporation
on behalf of the Board of Directors of IFC, and Xx. Xxxxxx X. Xxxxxxxxx.
(b) In the event that the transactions provided for under the
terms of the CB Merger Agreement have not been consummated and become
effective, then the Board of Directors of the Surviving Corporation shall
consist of Xx. Xxxxxxx X. Xxxxxxx, as well as Xx. Xxxxxx X. Xxxxxx and
three (3) other persons named as directors of the Surviving Corporation
on behalf of the Board of Directors of Pinnacle, and Xx. Xxxxxx X Xxxxx,
as well as Mr. Xxxxxx Xxxxxxxxx and three (3) other persons named as
directors of the Surviving Corporation on behalf of the Board of Directors
of IFC; provided, that, in the event that the transactions provided for
under the terms of the CB Merger Agreement subsequently are consummated
and become effective, then the Board of Directors of the Surviving
Corporation shall consist of those persons named as directors
of the Surviving Corporation in the preceding clause of this subsection (b)
and, in addition, Xx. Xxxxxx X. Xxxxxxxxx shall be named as a director of
the Surviving Corporation.
(c) In any case, at and following the Effective Time, under the
terms of the Standstill Agreement dated as of December 1, 1995, between
Pinnacle and Xx. Xxxxx X. Xxxxxx, Pinnacle may have certain obligations to
nominate Xx. Xxxxxx for election as a director of Pinnacle and said
agreement shall be binding on Pinnacle as the Surviving Corporation. In
the event that Pinnacle, as the Surviving Corporation, becomes obligated to
nominate Xx. Xxxxxx as a director of the Surviving Corporation, then the
Board of Directors at that time shall be increased in size by two (2)
persons, and Xx. Xxxxxx shall be nominated as a director of the Surviving
Corporation pursuant to the terms of the Standstill Agreement dated as of
December 1, 1995, between Pinnacle and Xx. Xxxxxx, and the Chairman shall
nominate for approval by the Board of Directors an additional person as a
director of the Surviving Corporation.
(d) Whenever the Board of Directors of the Surviving
Corporation is comprised of ten (10) or fewer persons, action of the
Board within the meaning of Section 523 of the MBCA, and for all other
purposes, shall require the favorable vote of six (6) or more of the
directors, and whenever the Board of Directors of the Surviving
Corporation is comprised of eleven (11) or twelve (12) persons, action
of the Board within the meaning of Section 523 of the MBCA, and for all
other purposes, shall require the favorable vote of seven (7) or more of
the directors."
2. Subsection (d) of Section 1.13 of the Agreement shall be and hereby
is amended and restated in its entirety to read as follows:
"(d) the directors of Pinnacle Bank as the surviving
institution following the Bank Merger shall be determined as follows:
(i) In the event that the transactions provided for under
the terms of Section 1.13 of the CB Merger Agreement have been
consummated and become effective, then the Board of Directors of
Pinnacle Bank as the surviving institution shall consist of twenty-one
(21) persons with nine (9) persons to be named as directors by the
Board of Directors of Pinnacle Bank, nine (9) persons to be named as
directors by the Board of Directors of IndFed Bank, and three (3)
persons to be named as directors by the Board of Directors of
Community Bank, a federal savings bank (one of which persons shall
be Xx. Xxxxxx X. Xxxxxxxxx);
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(ii) In the event that the transactions provided for under
the terms of Section 1.13 of the CB Merger Agreement have not been
consummated and become effective, then the Board of Directors of the
surviving institution shall consist of eighteen (18) persons with
nine (9) persons to be named as directors by the Board of Directors
of Pinnacle Bank and nine (9) persons to be named as directors by
IndFed Bank; provided, that, in the event that the transactions
provided for under the terms of Section 1.13 of the CB Merger Agreement
subsequently are consummated and become effective, then the Board of
Directors of the surviving institution shall consist of those
persons named as directors of the surviving institution in the
preceding clause of this subsection (d)(ii) and, in addition, three (3)
persons named as directors by the Board of Directors of Community Bank,
a federal savings bank (one of which persons shall be Xx. Xxxxxx X.
Xxxxxxxxx) shall be named as directors of the surviving institution;
and
(iii) The executive officers of Pinnacle Bank as the
surviving institution following the Bank Merger shall be those
appointed by the Board of Directors of the surviving institution
upon consummation of the Bank Merger, on the basis of recommendations
made by Xx. Xxxxxxx, as the Chairman of the parent Surviving
Corporation, Xx. Xxxxx, as the Vice Chairman of the parent Surviving
Corporation, and an outside consulting service to be engaged and
charged with reviewing and evaluating the qualifications of
candidates."
3. The meaning of the term "Material Adverse Effect", as defined in
Section 3.1 of the Agreement, and used in and throughout the Agreement, shall
be amended and restated in its entirety to provide as follows:
"As used in this Agreement, the term "Material Adverse Effect" means,
with respect to IFC, Pinnacle or the Surviving Corporation, as the case
may be, a material adverse effect on the business, results of
operations, financial condition, or (insofar as they can reasonably be
foreseen) prospects of such party and its Subsidiaries taken as a whole,
excluding for this purpose only, however, (i) the payment and/or
incurrence of (1) the one-time special assessment on institutions
holding deposits subject to assessment by the Savings Association
Insurance Fund ("SAIF") pursuant to The Deposit Insurance Funds Act of
1996 ("Funds Act") intended to increase SAIF's net worth as of October
1, 1996 to 1.25 percent of SAIF-insured deposits, and (2) transactional
expenses by IFC or Pinnacle in connection with the Merger, (ii) the
effects upon Pinnacle of the merger transaction, and all transactional
expenses with respect thereto, contemplated by the CB Merger Agreement,
whether or not consummated, and (iii) the effects upon Pinnacle of the
branch office swap transactions, and all
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transactional expenses with respect thereto, contemplated by the
Purchase and Assumption Agreement executed, or to be executed, between
Shoreline Bank, as Seller, and Pinnacle Bank, as Buyer, and the Purchase
and Assumption Agreement executed, or to be executed, between Pinnacle
Bank, as Seller, and Shoreline Bank, as Buyer (collectively, the "Branch
Office Swap Agreements"), whether or not consummated, in any said case
to the extent having such an effect."
4. The entering into and performance of the CB Merger Agreement, and/or
the Branch Office Swap Agreements, and consummation of the transactions
contemplated thereby, by Pinnacle are hereby ratified, approved and
authorized, and are and shall be deemed to be expressly permitted for all
purposes under the Agreement and the Option Agreements (defined herein as in
the Agreement) and shall not constitute a "triggering event" under any Option
Agreement.
5. Except as amended hereby, the Agreement is ratified and confirmed in
all respects.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Amendment has been duly executed by and on
behalf of each of the parties hereto as of the date first above written.
PINNACLE FINANCIAL SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive
Officer
INDIANA FEDERAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
Chairman and Chief
Executive Officer
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