Description of Securities
DESCRIPTION OF THE REGISTRANTS SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
As of December 3, 2019, Hennessy Advisors, Inc. (the Company) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, common stock, no par value per share (Common Stock).
DESCRIPTION OF COMMON STOCK
The following is a description of the rights of Common Stock and related provisions of the Companys Amended and Restated Articles of Incorporation (the Articles) and Fifth Amended and Restated Bylaws (the Bylaws) and applicable California law. This description is qualified in its entirety by, and should be read in conjunction with, the Articles, Bylaws and applicable California law.
The Company is authorized to issue up to 22,500,000 shares of Common Stock.
Fully Paid and Nonassessable
All of the outstanding shares of Common Stock are fully paid and nonassessable.
The holders of shares of Common Stock are entitled to one vote per share on all matters to be voted on by such holders. Holders of shares of Common Stock are not entitled to cumulative voting rights.
Subject to preferences to which holders of any preferred stock the Company may issue may be entitled, the holders of shares of Common Stock are entitled to receive such dividends, if any, as may be declared from time to time by the Companys Board of Directors, in its discretion, from funds legally available therefor.
Right to Receive Liquidation Distributions
In the event of a liquidation, dissolution, or winding up of the Company, holders of shares of Common Stock would be entitled to share in the Companys assets remaining after the payment of liabilities and the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock. The rights, preferences and privileges of the holders of shares of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that the Company may issue in the future.
No Preemptive or Similar Rights
Common Stock has no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to shares of Common Stock.
Anti-Takeover Provisions of the Bylaws and California Law
Provisions of the Bylaws may delay or discourage transactions involving an actual or potential change in control of the Company or change in its management, including transactions in which shareholders might otherwise receive a premium for their shares, or transactions that its shareholders might otherwise deem to be in their best interests. Among other things, the Bylaws:
provide that, except for a vacancy caused by the removal of a director as provided in the Bylaws, a vacancy on the Companys Board of Directors may be filled by a person selected by a majority of the remaining directors then in office, whether or not less than a quorum, or by a sole remaining director; and
provide that shareholders seeking to present proposals before a meeting of shareholders or to nominate candidates for election as directors at a meeting of shareholders must provide advance notice in writing in a timely manner.
In addition, as a California corporation, the Company is subject to the provisions of Section 1203 of the California General Corporation Law, which requires the Company to provide a fairness opinion to its shareholders in connection with their consideration of certain proposed interested party reorganization transactions.
The Companys Common Stock is listed on The NASDAQ Stock Market LLC under the trading symbol HNNA.