Description of Riverview Financial Corporations Common Stock
Unless otherwise indicated or unless the context requires otherwise, all references to Riverview, the Company, we, us, our or similar references mean Riverview Financial Corporation.
Description of Our Common Stock
General. Under our articles of incorporation, we are authorized to issue up to 20,000,000 shares of common stock, no par value per share (Voting Common Stock), 3,000,000 shares of preferred stock, no par value per share (Preferred Stock), and 1,348,809 shares of non-voting common stock, no par value per share (Non-Voting Common Stock). All outstanding shares of common stock, whether voting or non-voting, have equal rights in terms of dividends, liquidation, preferences and all other features. All of our outstanding shares of common stock are duly authorized, fully paid and nonassessable.
Voting Rights. Generally, the holders of our Voting Common Stock exclusively possess all voting power in the Company, subject to the authority of the board of directors to offer voting rights to the holders of Preferred Stock. Holders of Voting Common Stock are entitled to one vote per share on all matters presented to shareholders. The Non-Voting Common Stock has no voting rights, except as may be required by law under certain circumstances. Shareholders are not entitled to cumulate their votes in the election of directors.
Preemptive Rights. There are no preemptive rights with respect to the Voting Common Stock of Riverview Financial. The holders of Non-Voting Common Stock are generally not entitled to any preemptive or preferential right to purchase or subscribe for any capital stock, obligations, warrants or other securities or rights of the Corporation, except for any such rights that may be granted by way of separate contract or agreement to one or more holders of Non-Voting Common Stock. Pursuant to an agreement between the Company and the current holder of our Non-Voting Common Stock, the current holder of our Non-Voting Common Stock has the right, so long as it maintains certain stock ownership levels, to purchase additional shares of our capital stock in order to maintain its percentage ownership in our capital stock, in the event we make any public or nonpublic offering or sale of any equity security or convertible or exchangeable debt or hybrid security.
Conversion Rights. The Non-Voting Common Stock is convertible, on a one-for-one basis, into shares of Voting Common Stock, either upon request of the holder of the Non-Voting Common Stock or of Riverview, provided that the holder and its affiliates will not, as a result, own or control a greater percentage of any class of voting securities of Riverview than is permitted by Riverviews regulators and its board of directors.
Each share of Non-Voting Common Stock automatically converts into one share of Voting Common Stock if transferred: to Riverview; as part of a widely distributed public offering of common stock; as part of an offering that is not a widely distributed public offering of common stock but is one in which no one transferee (or group of associated transferees) acquires the rights to receive 2% or more of any class of the outstanding voting securities of Riverview (including pursuant to a related series of transfers); as part of a transfer of common stock to an underwriter for the purpose of conducting a widely distributed public offering; to a transferee that controls more than 50% of the voting securities of Riverview without giving effect to such transfer; or as part of a transaction approved by the Board of Governors of the Federal Reserve System.
The one-for-one conversion ratio of the Non-Voting Common Stock into Voting Common Stock is subject to adjustment due to any division, combination or consolidated, reclassification, reverse stock split or similar transactions increasing or reducing the outstanding common stock. The conversion ratio will be equitably adjusted if the common stock is changed into the same or a different number of shares of any other class or classes of stock, or upon a capital reorganization or merger (other than a subdivision, combination, reclassification or exchange of shares as provided above) so that the holders of Non-Voting Common Stock are able to receive upon conversion the same interest they would have received had they converted into Voting Common Stock prior to such event having occurred.
Dividends. Holders of both Voting Common Stock and Non-Voting Common Stock are entitled to receive dividends when, as and if declared by the Companys board of directors out of funds legally available therefor, subject to the rights of any shares of Preferred Stock at the time outstanding. Both federal and state laws impose restrictions on the ability of Riverview and its subsidiary, Riverview Bank, to pay dividends.
Liquidation. In the event of dissolution, liquidation or winding up of Riverview, holders of the Voting Common Stock and Non-Voting Common stock will be entitled to share ratably in any assets remaining after the satisfaction in full of the prior rights of creditors, including holders of any then outstanding indebtedness, and subject to the aggregate liquidation preference and participation rights of any Preferred Stock then outstanding.