FVCB’s board of directors may, from time to time, by action of a majority, issue shares of the authorized, undesignated preferred stock in one or more classes or series. In connection with any such issuance, the Board may by resolution determine the designation, voting rights, conversion, dividend, or other special rights or powers, and the limitations, qualifications, and restrictions of such shares of preferred stock. The existence of shares of authorized, undesignated preferred stock would enable FVCB to meet possible contingencies or opportunities in which the issuance of shares of preferred stock may be advisable, such as in the case of acquisition or financing transactions. Having shares of preferred stock available for issuance gives FVCB flexibility in that it would allow it to avoid the expense and delay of calling a meeting of shareholders at the time the contingency or opportunity arises. Any issuance of preferred stock with voting rights or which is convertible into voting shares could adversely affect the voting power of the holders of FVCB common stock.
The existence of authorized shares of preferred stock could have the effect of rendering more difficult or discouraging hostile takeover attempts or of facilitating a negotiated acquisition. Such shares, which may be convertible into shares of common stock, could be issued to shareholders or to a third party in an attempt to frustrate or render a hostile acquisition more expensive.
Certain Provisions of FVCB’s Articles of Incorporation and Bylaws.
Voting Requirements for Extraordinary Transactions. FVCB’s articles of incorporation do not contain any provisions which would require a greater or lesser than normal vote of shareholders, or any provisions which impose special approval or other requirements on corporate transactions or other matters. In general, extraordinary transactions such as mergers, acquisitions, share exchanges and amendment of the articles of incorporation, would require approval by the holders of two-thirds of the votes entitled to be cast on the matter.
Consideration of Other Constituencies. FVCB’s articles of incorporation contain a provision which requires the board of directors, when evaluating any offer of another party, to (i) make a tender or exchange offer for its equity securities, (ii) merge or consolidate with another corporation, (iii) purchase or otherwise acquire all or substantially all of its properties and assets, or (iv) engage in any transaction similar to, or having similar effects as, any of the foregoing transactions to give due consideration to all relevant factors, including, without limitation, the social and economic effects of the proposed transaction on the depositors, employees, customers, and other constituents of FVCB and its subsidiaries and of the communities in which they operate or are located, the business reputation of the other party, and the board of directors’ evaluation of the then value of FVCB in a freely negotiated sale and of FVCB’s future prospects as an independent entity. This provision, which requires the board to consider noneconomic factors, could be deemed to have an antitakeover effect.
Shareholder Action by Written Consent. Under FVCB’s bylaws and the VSCA, any action that, under any provision of the VSCA, may be taken at a meeting of the shareholders, may be taken without a meeting and without prior notice if a consent in writing, setting forth the action so taken, shall be signed by the holders of all of the outstanding shares entitled to vote on the matter.
Call of a Special Meeting of Shareholders. FVCB’s bylaws provide that special meetings of shareholders may only be called by FVCB’s board, by the chairman of the board or by FVCB’s president.
Amendment of the Bylaws. FVCB’s bylaws provide that, except where law or the articles of incorporation reserve the right for the shareholders, the bylaws may be amended or repealed, or new bylaws may be adopted by, the board of directors the affirmative vote of a majority of the board of