Description of Registrants Common Stock
DESCRIPTION OF REGISTERED SECURITIES
Farmers & Merchants Bancorp, Inc. (the “Registrant”) is a corporation organized under the laws of the State of Ohio and a financial holding company registered under the Bank Holding Company Act of 1956, as amended. The Registrant’s common shares are registered with the Securities and Exchange Commission under Section 12(b) of the Securities Exchange Act of 1934 pursuant to a registration statement on Form 8-A.
Set forth below is a description of the Registrant’s common shares. This description is qualified in its entirety by reference to the Registrant’s Amended Articles of Incorporation (the “Articles”), its Amended Code of Regulations (the “Code”), and the relevant provisions of Ohio law.
At all meetings of the Registrant’s shareholders, 33 1/3% of the shares entitled to vote, represented either in person or by proxy, shall constitute a quorum for the transaction of business. Except in the election of members of the Registrant’s board of directors (the “Board” and “Directors” as applicable) where the Shares may be voted cumulatively, the holders of the Shares are entitled at all times to one vote for each Share. Except with respect to the election of Directors, and as otherwise provided by the Articles or the Code, or by applicable law, a majority of votes cast at any meeting at which a quorum is present shall determine the outcome of any motion.
Directors are elected by a plurality of the votes cast, which means that the nominees receiving the largest number of votes FOR will be elected. The laws of Ohio and the Registrant’s Articles permit cumulative voting in the election of Directors if a shareholder submits the appropriate written notice to the Registrant not less than 48 hours before the time fixed for holding a meeting of shareholders for the purpose of electing Directors, and the appropriate announcement of the giving of such notice is made upon the convening of the meeting. Cumulative voting rights allow shareholders to multiply the number of shares owned by them times the number of Directors to be elected to calculate their total respective voting power and to cast such votes for one nominee or to allocate such votes among nominees as they deem appropriate.
Shareholders possess the preemptive right to subscribe for additional shares of the Registrant if and when offered for sale thereby. The Ohio General Corporation Law provides that shareholders having preemptive rights shall have the right, during a reasonable time and on reasonable terms fixed by the Directors, to purchase additional shares of the Registrant in proportion to their respective holdings, subject to a limited number of exceptions.
In the event of any liquidation, dissolution or winding up of the Registrant, the remaining assets of the Registrant, after the payment of all debts and necessary expenses, will be distributed among the holders of the Shares pro rata in accordance with their respective holdings.
Conversion, redemption and sinking fund rights; shares nonassessable
There are no conversion terms, sinking fund provisions or redemption rights associated with the Registrant’s Shares. When authorized by the affirmative vote of a majority of the Board, without any action or approval of shareholders, the Registrant may from time to time redeem or repurchase shares for such prices and upon such terms and conditions as the Directors may determine. Upon receipt of consideration by the Registrant as fixed by its Board, each Share issued is then fully paid and nonassessable.
Payment of dividends
The holders of the Registrant's Shares, are entitled to the payment of dividends when, as and if the Board may in its discretion periodically declare, which dividends may be paid out of funds legally available for dividends and distributions under applicable laws and regulations.
Special meetings of shareholders may be called in accordance with the Ohio General Corporation Law by any of the following:
Shareholder vote required to approve business combinations with Interested Persons
Article Sixth of the Articles provides that certain business combination transactions between the Registrant and a party that owns more than 10% of the Registrant’s outstanding shares of common stock require the affirmative vote of the holders of at least a majority of the Registrant’s outstanding Shares other than those beneficially owned by the counterparty to the proposed transaction. The foregoing shareholder vote requirements do not apply to any proposed transaction:
The provisions contained in Article Sixth of the Articles could have the effect of delaying, deferring or preventing a change in control of the Registrant.
Restrictions on Alienation
No restrictions on alienation of the Shares are imposed by the Registrant's Articles or Code.
Amendments to Articles and Code
Article Ninth of the Articles provides that any amendment may be made by the affirmative vote of the holders of 66 2/3% of the total number of shares voted, provided however, that the total number of shares voted in favor of the amendment represents at least a majority of the total voting power of the Registrant. In addition, any amendment that is inconsistent with, or would have the effect of altering or repealing the provisions of Article Sixth of the Registrant’s Articles requires the affirmative vote of the holders of Shares that would be required to approve a transaction under the provisions thereof.
Under the provisions of Ohio law and the Code, the Code may be altered, amended, added to or repealed by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Registrant.
Removal of Directors
Under the Ohio General Corporation Law, if the shareholders have the right to vote cumulatively in the election of directors, then, all the directors or any individual director may be removed from office, without assigning any cause, by the vote of the holders of a majority of the voting power entitling them to elect directors in place of those to be removed, except that, unless all the directors are removed, no individual director shall be removed if the votes of a sufficient number of shares are cast against the director's removal that, if cumulatively voted at an election of all the directors, or all the directors of a particular class, as the case may be, would be sufficient to elect at least one director.