DESCRIPTION OF CAPITAL STOCK
As of the end of the fiscal year covered by the Annual Report on Form 10-K of Watsco, Inc., a Florida corporation (the Company), to which this Exhibit is attached, or incorporated by reference, as an exhibit, the following securities of the Company were registered under Section 12 of the Securities Exchange Act of 1934, as amended: Common stock, par value $0.50 per share (the Common stock), and Class B common stock, par value $0.50 per share (the Class B common stock). Unless the context otherwise requires, all references herein to we, our, ours, and us refer to the Company.
The following summarizes certain material terms and provisions of our Common stock, our Class B common stock and our preferred stock. This summary is qualified in its entirety by reference to the Florida Business Corporation Act (the Florida Act), and the complete text of our Amended and Restated Articles of Incorporation, as amended (the Amended and Restated Articles of Incorporation) and the complete text of our Second Amended and Restated Bylaws, as amended (the Amended and Restated Bylaws).
Overview Authorized and Outstanding Shares
Under our Amended and Restated Articles of Incorporation, we have the authority to issue:
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60,000,000 shares of Common stock;
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10,000,000 shares of Class B common stock; and
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10,000,000 shares of preferred stock, par value $0.50 per share, which are issuable in series on terms determined by our Board of Directors, of which none are currently designated.
Rights of Our Common Stock
Preemptive Rights. The holders of our Common stock do not have preemptive rights to purchase or subscribe for any stock or other securities of ours.
Voting Rights. Each outstanding share of our Common stock is entitled to one (1) vote per share.
Dividends. Holders of our Common stock are entitled to receive dividends or other distributions when and if declared by our Board of Directors. The right of our Board of Directors to declare dividends, however, is subject to any rights of the holders of other classes of our capital stock and the availability of sufficient funds under Florida law to pay dividends. In addition, our ability to pay dividends depends on certain restrictions in our credit agreement.
Liquidation Rights. In the event of the liquidation of the Company, subject to the rights, if any, of the holders of other classes of our capital stock, the holders of our Common stock are entitled to receive any of our assets available for distribution to our shareholders ratably in proportion to the number of shares held by them.
Listing. We list our Common stock on the New York Stock Exchange under the symbol WSO.
Rights of Our Class B Common Stock
Our Class B common stock is substantially identical to our Common stock except: (i) each share of Common stock is entitled to one (1) vote on all matters submitted to a vote of our shareholders, and each share of Class B common stock is entitled to ten (10) votes; (ii) shareholders of Common stock are entitled to elect 25% of our Board of Directors (rounded up to the nearest whole number), and Class B shareholders are entitled to elect the balance of the Board of Directors; (iii) cash dividends may be paid on Common stock without paying a cash dividend on Class B common stock, and no cash dividend may be paid on Class B common stock unless at least an equal per share cash dividend is paid on Common stock; and (iv) Class B common stock is convertible at any time into Common stock on a one-for-one basis at the option of the shareholder.