SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-----------------------------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT TO 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO 13D-2(a)
(Amendment No. ____________)*
PINNACLE FINANCIAL SERVICES, INC.
-----------------------------------
(Name of Issuer)
Common Stock, No Par Value
---------------------------
(Title of Class of Securities)
723462107
-----------------------------
(CUSIP Number)
John R. Spruill
CNB Bancshares, Inc.
20 N. W. Third Street
Evansville, Indiana 47739
(812) 464-3400
----------------------------------------------------
(Name, Address and Telephone Number of
Persons Authorized to Receive Notices
and Communications)
October 14, 1997
-------------------------------------------------
(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 [ ].
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
Page 1 of 11 pages
- ------------------------
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
SCHEDULE 13D
CUSIP NO. 723462107 Page 2 of 11 pages
---------
NAME OF REPORTING PERSON
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
CNB BANCSHARES, INC.
IRS IDENTIFICATION NO.: 35-1568731
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
2 (b) [ ]
SEC USE ONLY
3
SOURCE OF FUNDS
4
WC.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [ ]
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Indiana
SOLE VOTING POWER
NUMBER OF 7
2,000,000*
SHARES
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
SOLE DISPOSITIVE POWER
EACH 9
2,000,000
REPORTING
SHARED DISPOSITIVE POWER
PERSON 10
0
WITH
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- ---------------------------
* 2,000,000 shares of Common Stock, no par value, of Pinnacle
Financial Services, Inc. ("Pinnacle Common Stock"), a Michigan
corporation ("Pinnacle" or the "Issuer"), covered by this statement
may be obtained by CNB Bancshares, Inc., an Indiana corporation
("CNB"), upon exercise of the Option (defined below) described in
Item 4 below, if the Option were exercisable on the date hereof.
CNB expressly disclaims beneficial ownership of any such shares.
Prior to the grant of the Option by Pinnacle to CNB, CNB was not
entitled to any rights of a shareholder in Pinnacle with respect to
the shares covered by the Option. The Option may be exercised only
upon the happening of certain events described in Item 4 below, none
of which has occurred as of the date hereof, and none of which is
within the control of CNB. Dispositive and voting powers are
summarized in Items 4 and 5 below.
Page 3 of 11 pages
11
The reporting person has acquired an option to purchase up to
2,000,000 shares of Pinnacle Common Stock.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES [ ]
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
16.2% (without giving effect to the number of shares issuable
upon exercise of the Option)
TYPE OF REPORTING PERSON
14
CO.
ITEM 1. SECURITY AND ISSUER.
(a) This Schedule 13D relates to the common stock, no par value
of Pinnacle.
(b) The principal executive offices of the issuer are located at
830 Pleasant Street, St. Joseph, Michigan 49085.
ITEM 2. IDENTITY AND BACKGROUND.
(a) The reporting person is CNB Bancshares, Inc.
(b) The reporting person is incorporated in Indiana.
(c) The reporting person's principal business is that of a
holding company for banking subsidiaries.
(d) The address of the reporting person's principal business and
principal office is 20 N.W. Third Street, Evansville,
Indiana 47739.
(e) The reporting person has not been convicted in a criminal
proceeding during the last five years.
(f) The reporting person, during the last five years, was not a
party to any civil proceeding of a judicial or administrative
body of competent jurisdiction which resulted in 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.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
It is presently anticipated that, should any purchase of Pinnacle
Common Stock be made by CNB pursuant to the Option Agreement described
below in response to Item 4, or otherwise, the source of any funds used
in any such purchase would be the available cash, cash equivalents,
available for sale securities and bank financing of CNB.
ITEM 4. PURPOSE OF TRANSACTION.
Page 4 of 11 pages
A. THE MERGER AGREEMENT.
On October 14, 1997, CNB and Pinnacle entered into an Agreement and
Plan of Merger (the "Merger Agreement") pursuant to which Pinnacle
would merge with and into CNB (the "Merger"). The Merger is subject to
receipt of regulatory and CNB and Pinnacle shareholder approval, as
well as other closing conditions, and it is currently estimated that
the Merger would be consummated in the second quarter of 1998, subject
to satisfaction of such closing conditions.
Under the terms of the Merger, (i) each share of Pinnacle Common Stock
issued and outstanding immediately prior to the Effective Time (as
defined in the Merger Agreement) would be converted into the right to
receive 1.0365 shares of Common Stock, $1.00 par value, of CNB ("CNB
Common Stock") in exchange for each share of Pinnacle Common Stock, and
(ii) each share of CNB Common Stock issued and outstanding immediately
prior to the Effective Time would remain outstanding, unaffected by the
Merger. Upon consummation of the Merger, the Articles of Incorporation
and Bylaws of CNB would be the Articles of Incorporation and Bylaws of
the surviving corporation.
B. THE OPTION.
As an inducement and a condition to CNB's entering into the Merger
Agreement, on October 14, 1997, Pinnacle and CNB entered into a Stock
Option Agreement (the "Option Agreement"), pursuant to which Pinnacle
granted CNB an option (the "Option") entitling it to purchase up to
2,000,000 fully paid and nonassessable shares of Pinnacle Common Stock
at a price per share equal to $37.00 per share (the "Option Price"),
subject to adjustment in certain circumstances.*
- ---------------------------
* In the event of any change in the Pinnacle Common Stock by reason of
stock dividends, split-ups, recapitalization, or the like, the type and
number of shares of Pinnacle Common Stock purchasable upon exercise of the
Option shall be appropriately adjusted and proper provision shall be made so
that, in the event that any additional shares of Pinnacle Common Stock are
to be issued as a result of the foregoing, the number of shares of Pinnacle
Common Stock that remain subject to the Option shall be increased so that,
after such issuance and together with shares of Pinnacle Common Stock
previously issued pursuant to the exercise of the Option, the number of shares
of Pinnacle Common Stock subject to the Option represents the same proportion
of the number of shares of Pinnacle Common Stock then issued and outstanding
as such proportion before the applicable event described above.
Subject to applicable law, regulatory restrictions and certain other
conditions, CNB may exercise the Option, in whole or in part, at any
time following the occurrence of a Purchase Event (as defined below)
and prior to an Exercise Termination Event (as defined below).
As defined in the Option Agreement, "Purchase Event" means the
occurrence of either of the following events or transactions:
Page 5 of 11 pages
1. The acquisition by any Person (the term "Person" for
purposes of the Option Agreement having the meaning assigned
thereto in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder) other than CNB or any of its subsidiaries
(each a "CNB Subsidiary") or any Pinnacle subsidiary (each a
"Pinnacle Subsidiary") acting in a fiduciary capacity in the
ordinary course of business (provided that the foregoing exception
shall not apply to any Person for whom or which such Pinnacle
Subsidiary is acting in such fiduciary capacity) of beneficial
ownership of shares of Pinnacle Common Stock, such that, upon the
consummation of such acquisition, such Person would have beneficial
ownership, in the aggregate, of 20% or more of the then outstanding
shares of Pinnacle Common Stock; or
2. The occurrence of a Preliminary Purchase Event (as described
below) described in paragraph (1) under the definition of
"Preliminary Purchase Event" below except that the percentage
referred to in clause (z) of such paragraph (1) shall be 20%.
As defined in the Option Agreement, "Exercise Termination Event" means
any one of the following events:
1. The time immediately prior to the Effective Time;
2. Twelve months after the first occurrence of a Purchase
Event;
3. Eighteen months after the termination of the Merger
Agreement following the occurrence of a Preliminary Purchase
Event;
4. The termination of the Merger Agreement 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 Merger Agreement by CNB pursuant to Section 7.02 thereof
or by CNB and Pinnacle pursuant to Section 7.01 thereof if
CNB shall at that time have been entitled to terminate the
Merger Agreement pursuant to Section 7.02 thereof
(provided that the breach of Pinnacle giving rise to such
termination or such right to terminate was willful));
5. Eighteen months after the termination of the Merger
Agreement by CNB pursuant to Section 7.02 thereof or by
CNB and Pinnacle pursuant to Section 7.01 thereof if CNB
shall at that time have been entitled to terminate the Merger
Agreement pursuant to 7.02 thereof (provided that the breach
of Pinnacle giving rise to such termination or such right to
terminate was willful.)
As defined in the Option Agreement, "Preliminary Purchase Event" means
any one of the following events:
1. Pinnacle or any Pinnacle Subsidiary, without having received
CNB's prior written consent, shall have entered into an agreement to
engage in an Acquisition Transaction (as defined below) with any
Person other than CNB or any CNB Subsidiary or the Board of
Directors of Pinnacle shall have recommended that the shareholders
of Pinnacle approve or accept any Acquisition Transaction with any
Person other than CNB or any CNB Subsidiary. For purposes of the
Option
Page 6 of 11
Agreement, "Acquisition Transaction" shall mean (x) a merger
or consolidation, or any similar transaction, involving Pinnacle or
any Pinnacle Subsidiary that is a significant subsidiary as defined
in Rule 1-02 of Regulation S-X by the Securities and Exchange
Commission (and the term "significant subsidiary" shall include any
bank or other financial institution subsidiary of Pinnacle), (y) a
purchase, lease or other acquisition of all or substantially all of
the assets of or assumption of all or substantially all the
deposits of Pinnacle or any Pinnacle Subsidiary, or (z) a purchase
or other acquisition (including by way of merger, consolidation,
share exchange or otherwise) of securities representing 10% or more
of the voting power of Pinnacle or any Pinnacle Subsidiary that is
a significant subsidiary, provided that the term "Acquisition
Transaction" does not include any internal merger or consolidation,
transfer or lease of assets or voting securities involving only
Pinnacle and/or Pinnacle Subsidiaries;
2. Any Person (other than CNB or any CNB Subsidiary or any
Pinnacle Subsidiary acting in a fiduciary capacity in the ordinary
course of business or any other Person who as of the date of the
Option Agreement Beneficially Owns (the term "Beneficial Ownership"
for purposes of the Option Agreement having the meaning assigned
thereto in Section 13(d) of the Exchange Act, and the rules and
regulations thereunder) 10% or more of the outstanding shares of
Pinnacle Common Stock) shall have acquired Beneficial Ownership or
the right to acquire Beneficial Ownership, of shares of Pinnacle
Common Stock such that, upon the consummation of such acquisition,
such Person would have Beneficial Ownership, in the aggregate, of
10% or more of the then outstanding shares of Pinnacle Common Stock
or, with respect to any Person who as of the date of the Option
Agreement Beneficially Owns 10% or more of the outstanding shares
of Pinnacle Common Stock, such Person shall have acquired
Beneficial Ownership or the right to acquire Beneficial Ownership,
of shares of Pinnacle Common Stock such that, upon consummation of
such acquisition, such Person would have Beneficial Ownership, in
the aggregate, of 15% or more of the then outstanding shares of
Pinnacle Common Stock;
3. Any Person other than CNB or any CNB Subsidiary shall have
made a BONA FIDE proposal to Pinnacle or its shareholders, by
public announcement or written communication that is or becomes the
subject of public disclosure, to engage in an Acquisition
Transaction (including, without limitation, any situation in which
any Person other than CNB or any CNB Subsidiary shall have
commenced (as such term is defined in Rule 14d-2 under the Exchange
Act) or shall have filed a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to, a tender offer or exchange offer to purchase any shares
of Pinnacle Common Stock such that, upon consummation of such
offer, such Person would own or control 10% or more of the then
outstanding shares of Pinnacle Common Stock (such an offer being
referred to in the Option Agreement as a "Tender Offer" or an
"Exchange Offer", respectively));
4. After a proposal is made by a third party to Pinnacle or its
shareholders to engage in an Acquisition Transaction, or such third
party states its intention to make such a proposal if the Merger
Agreement terminates and/or the Option expires, Pinnacle
Page 7 of 11 pages
shall have breached any covenant or obligation contained in
the Merger Agreement and such breach would entitle CNB to terminate
the Merger Agreement (without regard to the cure period provided
for therein unless such cure is promptly effected without
jeopardizing consummation of the Merger) pursuant to the terms of
the Merger Agreement;
5. The holders of Pinnacle Common Stock shall not have approved
the Merger Agreement by the requisite vote at the meeting of such
stockholders held for the purpose of voting on the Merger
Agreement, or such meeting shall not have been held or shall have
been canceled prior to termination of the Merger Agreement, in each
case after it shall have been publicly announced that any Person
(other than CNB or any CNB Subsidiary) 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 Securities Act with respect to an
Exchange Offer, or (C) filed an application (or given a notice)
with, whether in draft or final form, the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") or any other
governmental authority or regulatory or administrative agency or
commission (each, a "Governmental Authority"), for approval to
engage in an Acquisition Transaction;
6. Any Person (other than CNB or any CNB Subsidiary), other
than in connection with a transaction to which CNB has given its
prior written consent, shall have filed an application or notice
with the Federal Reserve Board or other Governmental Authority (as
defined in the Option Agreement) for approval to engage in an
Acquisition Transaction; or
7. Pinnacle's Board of Directors shall have withdrawn or
modified (or publicly announced its intention to withdraw or
modify) in any manner adverse in any respect to CNB its
recommendation that the stockholders of Pinnacle approve the
transactions contemplated by the Merger Agreement, or Pinnacle or
any significant Pinnacle Subsidiary shall have authorized,
recommended, proposed (or publicly announced its intention to
authorize, recommend or propose) an agreement to engage in an
Acquisition Transaction between Pinnacle or any significant
Pinnacle Subsidiary with any person other than CNB or a CNB
Subsidiary.
As provided in the Option Agreement, in the event that CNB is entitled
to and wishes to exercise the Option, it must send to Pinnacle a
written notice (the date of which is referred to in the Option
Agreement as the "Notice Date") specifying (1) the total number of
shares of Pinnacle Common Stock which CNB intends to purchase pursuant
to such exercise, (2) the aggregate purchase price as provided in the
Option Agreement, and (3) a period of time (not less than three
business days, nor more than 30 business days) running from the Notice
Date and a place at which the closing of such purchase shall take
place; PROVIDED, HOWEVER, that if prior notification to or approval of
the Federal Reserve Board or any other Governmental Authority is
required in connection with such purchase, CNB will promptly file and
expeditiously process the required notice or application for approval.
Page 8 of 11 pages
Under the Bank Holding Company Act of 1956 (the "BHC Act"), CNB may not
directly or indirectly acquire more than 5% of the outstanding shares
of any class of voting securities of Pinnacle without application to
and prior approval from the Federal Reserve Board.
If Pinnacle enters into certain agreements relating to the
consolidation or merger of Pinnacle or the sale of substantially all of
its assets or deposits, Pinnacle is required to make proper provision
so that the Option will, upon consummation of such transaction, be
converted into, or exchanged for, an option (the "Substitute Option"),
at CNB's election, in the Acquiring Corporation (as defined in the
Option Agreement) or in any Person that controls the Acquiring
Corporation. The Substitute Option generally will have the same terms
and conditions as the Option; PROVIDED, HOWEVER, that to the extent
terms and conditions of the Substitute Option cannot legally be
identical to those of the Option, they will in no event be less
advantageous to CNB.
In certain circumstances related to the exercise of the Option, the
time period specified in the Option Agreement will be extended (1) to
the extent necessary to obtain all regulatory approvals and for the
expiration of all statutory waiting periods, and (2) to the extent
necessary to avoid liability under Section 16(b) of the Exchange Act by
reason of such exercise; PROVIDED, HOWEVER, that in no event shall any
closing date occur more than six months after the related Notice Date.
The Option may be assigned by CNB in certain circumstances, subject to
the terms and conditions described in the Option Agreement.
In addition, any shares of Pinnacle Common Stock purchased upon the
exercise of the Option may be resold by CNB pursuant to registration
rights under the Option Agreement.
Upon the occurrence of a Purchase Event that occurs prior to an
Exercise Termination Event, (i) at the request of CNB, Pinnacle has
agreed to repurchase the Option from CNB at a price (the "Option
Repurchase Price") equal to the amount by which (A) the market/offer
price (as defined below) exceeds (B) the Option Price, multiplied by
the number of shares for which the Option may then be exercised, and
(ii) at the request of the owner of any shares that have been issued
upon exercise of the Option (the "Option Shares") delivered within 30
days of a Purchase Event, Pinnacle has agreed to repurchase such number
of the Option Shares from the owner thereof as the owner shall
designate at a price (the "Option Share Repurchase Price") equal to the
market/offer price multiplied by the number of Option Shares so
designated. The term "market/offer price" shall mean the highest of
(i) the price per share of Pinnacle Common Stock at which a tender
offer or exchange offer therefor has been made after the date of the
Option Agreement and on or prior to the date of request for repurchase,
(ii) the price per share of Pinnacle Common Stock paid or to be paid by
any third party pursuant to an agreement with Pinnacle, (iii) the
highest closing price for shares of Pinnacle Common Stock within the 90-
day period ending on the date of the request for repurchase as reported
on The Nasdaq Stock Market's National Market, or (iv) in the event of
a sale of all or substantially all of Pinnacle assets, the sum of the
price paid in such sale for such assets and the current market value of
the remaining assets of Pinnacle as determined
Page 9 of 11
by a nationally-recognized independent investment banking firm
mutually selected by CNB or the owner of the Option Shares, as the
case may be, on the one hand, and Pinnacle on the other hand, divided by
the number of shares of Pinnacle Common Stock outstanding at the time of
such sale.
Copies of the Option Agreement and the Merger Agreement are filed as
exhibits to the Form 8-K dated October 20, 1997, as filed by Pinnacle
with the Securities and Exchange Commission and are incorporated herein
by reference. The foregoing summary is not intended to be complete and
is qualified in its entirety by reference to such exhibits.
C. PURCHASES OF PINNACLE COMMON STOCK
Prior to the date hereof, CNB has not purchased any shares of Pinnacle
either in the open market or in privately negotiations transactions.
Other than as described above or in item 5 below, CNB does not have any
plans or proposals which relate to or would result in any of the
matters listed in item 4(a)-(j) of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The Option. As a result of execution of the Option
Agreement and the granting of the Option thereunder, pursuant to
Rule 13d-3(d)(1)(i) under the Exchange Act, CNB is deemed to own
beneficially 2,000,000 shares of Pinnacle Common Stock,
constituting approximately 16.2% of the shares of Pinnacle Common
Stock issued and outstanding as of October 14, 1997. CNB expressly
disclaims any beneficial ownership of the 2,000,000 shares of
Pinnacle Common Stock which are obtainable by CNB upon exercise of
the Option because the Option is exercisable only in the
circumstances set forth in the Option Agreement, which is described
in Item 4 hereof, none of which has occurred as of the date hereof
and only then with regulatory approval (if, as a consequence, CNB
would own more than 5% of the outstanding shares of Pinnacle Common
Stock).
(b) If CNB were to exercise the Option, it would have sole power
to vote and, subject to the terms of the Option Agreement, sole
power to direct the disposition of, the shares of Pinnacle Common
Stock covered thereby.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Page 10 of 11 pages
Except for the Option Agreement and the Merger Agreement described in
Item 4 above, there are no contracts, arrangements, understandings or
relationships between the reporting person and any person with respect
to any securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following documents are incorporated by reference in this
Schedule 13D:
(1) Agreement and Plan of Merger, dated as of October 14, 1997,
by and between CNB Bancshares, Inc. and Pinnacle Financial
Services, Inc. (incorporated by reference to Exhibit 2 to the
Current Report on Form 8-K dated October 20, 1997, as filed by
Pinnacle Financial Services, Inc. with the Securities and Exchange
Commission).
(2) Stock Option Agreement, dated as of October 14, 1997, by and
between CNB Bancshares, Inc. and Pinnacle Financial Services, Inc.
(incorporated by reference to Exhibit 99.1 to the Current Report on
Form 8-K dated October 20, 1997, as filed by Pinnacle Financial
Services, Inc. with the Securities and Exchange Commission).
SIGNATURES
-----------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true complete and correct.
Dated: October 22, 1997 CNB BANCSHARES, INC.
By: /s/ John R. Spruill
----------------------------------
Name: John R. Spruill
Title: Chief Financial Officer
Page 11 of 11 PAGES
EXHIBIT INDEX
Exhibit No. Exhibit Description and Method of Filing
------------- -----------------------------------------
2 Agreement and Plan of Merger, dated as of
October 14, 1997, by and between CNB Bancshares,
Inc. and Pinnacle Financial Services, Inc.
(incorporated by reference to Exhibit 2 to the
Current Report on Form 8-K dated October 20, 1997,
as filed by Pinnacle Financial Services, Inc. with
the Securities and Exchange Commission).
99.1 Stock Option Agreement, dated as of October 14,
1997, by and between CNB Bancshares, Inc. and
Pinnacle Financial Services, Inc. (incorporated by
reference to Exhibit 99.1 to the Current Report on
Form 8-K dated October 20, 1997, as filed by
Pinnacle Financial Services, Inc. with the
Securities and Exchange Commission).
