Our board of directors has the authority to declare dividends on its common and preferred stock, subject to statutory and regulatory requirements. Because a decision by our board of directors to declare and pay cash dividends will depend upon the future financial performance and condition of the Bank and the Registrant, no assurances can be given that dividends will in fact be paid on the common stock, or that, if dividends are paid, they will not be reduced or discounted in the future.
In the event of a liquidation, dissolution or winding up of the holding company, the holders of our common stock are entitled to share ratably in all assets remaining after payment of all liabilities.
The following description of certain provisions of our Articles of Incorporation and Bylaws, which may be considered to be anti-takeover in effect. These provisions also could delay or frustrate the removal of incumbent directors or the assumption of control by shareholders
Authorized Capital; No Preemptive Rights. The number of authorized common and preferred shares, and the granting of authority to our board of directors to determine the terms of any common or preferred stock or other securities issued, are intended to give our board of directors some flexibility to issue additional securities for proper corporate purposes, including financing, acquisitions, stock dividends, stock splits and employee incentive plans. However, these additional shares could also be used by the board of directors to deter future attempts to gain control over the holding company.
Ownership Limitation. Our Articles of Incorporation provide that, generally, no shareholder may have holdings of shares that exceed 20% of the issued and outstanding shares of common stock. However, this restriction can be waived for any shareholder or shareholders upon the resolution of at least two-thirds of the board of directors. If any shareholder acquires holdings which cause the violation of the restriction (sometimes called a substantial shareholder), the board of directors may terminate all voting rights attributable to the shares owned beneficially by the shareholder during the time that the restriction is being violated, commence litigation to require the divestiture of such amount of the shares so that alter such divestiture the shareholder would no longer be in violation of the restriction contained in Section I of this Article, or take such other action as is appropriate under the circumstances. For purposes of the provision, a shareholder's holdings are: (i) the common stock the shareholder owns of record; (ii) the common stock to which the shareholder has direct or indirect beneficial ownership and (iii) the common stock owned of record or beneficially by other shareholder(s) acting together with the shareholder as a group tor the purpose of acquiring, holding or disposing of common stock. The board of directors may use, but is not necessarily limited to, the following indicia to determine beneficial ownership: the effect of stock ownership by a person's spouse and minor children; ownership of shares held by a corporation or foundation of which a substantial shareholder is an officer or affiliate; the extent of a substantial shareholder's ownership of partnership shares; transfers pursuant to divorce; installment purchases; stock warrants, grants and options; control over the voting power of any stock; the status of a substantial shareholder as trustee, trust beneficiary or settler of a trust of which part of all of the corpus is shares of the common stock of the holding company; and stock dividends. The board's determination of the existence and membership of a shareholder group, of a shareholder's holdings and of the record are conclusive, absent proof of bad faith. This provision of our Articles of Incorporation may not be amended unless approved by the affirmative vote of at least two-thirds of the outstanding shares of common stock.
Our board of directors could use this authority to discourage future attempts to gain control over the holding company.
Acquisition Offers. Our Articles of Incorporation provide that our board of directors may, if it deems it advisable, oppose a tender or other offer for the holding company's securities, whether the offer is in cash or in the securities of a corporation or otherwise. When considering whether to oppose an offer, the board of directors may, but is not legally obligated to, considers any relevant or pertinent issue; by way of illustration, but not of limitation, the board of directors may, but shall not be legally obligated to, consider any or all of the following: