Attached files
file | filename |
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10-Q - FIRST RELIANCE BANCSHARES INC | v193527_10q.htm |
EX-31.1 - FIRST RELIANCE BANCSHARES INC | v193527_ex31-1.htm |
EX-31.2 - FIRST RELIANCE BANCSHARES INC | v193527_ex31-2.htm |
EX-32.2 - FIRST RELIANCE BANCSHARES INC | v193527_ex32-2.htm |
EX-32.1 - FIRST RELIANCE BANCSHARES INC | v193527_ex32-1.htm |
Exhibit
3.1
AMENDED
AND RESTATED
ARTICLES
OF INCORPORATION,
AS
AMENDED, AS OF APRIL 7, 2010
1.
|
The
name of the proposed corporation is First Reliance
Bancshares, Inc.
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2.
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The
initial registered office of the corporation is 2170 W. Palmetto Street Street Address |
Florence | Florence |
SC
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29501
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City | County |
State
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Zip
Code
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and the initial registered agent at such address is F. R. Saunders,
Jr.
Print
Name
I hereby consent to the appointment as
registered agent of the corporation:
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/s/
F. R. Saunders
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|||
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Agent’s
Signature
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3.
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(a)
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The
total number of shares of capital stock which the corporation is
authorized to issue is Thirty Million (30,000,000) shares, divided into
Twenty Million (20,000,000) shares of common stock, $0.01 par value, and
Ten Million (10,000,000) shares of preferred stock, no par value (the
“Preferred Stock”). The shares of common stock shall have
unlimited voting rights and shall be entitled, subject to any preferences
of any Preferred Stock then outstanding, to receive the net assets of the
Corporation upon dissolution.
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(b)
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The
Board of Directors of the corporation is authorized, subject to
limitations prescribed by law and the provisions of this Article, to
provide for the issuance of the shares of Preferred Stock in series, and
to establish from time to time the number of shares to be included in each
such series, and to fix the designation, powers, preferences, and relative
rights of the shares of each such series and the qualifications, or
restrictions thereof. The authority of the Board of Directors
with respect to each series shall include, but not be limited to,
determination of the following:
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(i)
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The
number of shares constituting that series and the distinctive designation
of that series;
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(ii)
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The
dividend rate on the shares of that series, whether dividends shall be
cumulative, and, if so, from which date or dates, and the relative rights
of priority, if any, of payments of dividends on shares of that
series;
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1
First
Reliance Bancshares, Inc.
|
||
Name of
Corporation
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(iii)
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Whether
that series shall have voting rights, in addition to the voting rights
provided by law, and, if so, the terms of such voting
rights;
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(iv)
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Whether
that series shall have conversion privileges, and, if so, the terms and
conditions of such conversion, including provisions for adjustment of the
conversion rate in such events as the Board of Directors shall
determine;
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(v)
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Whether
or not the shares of that series shall be redeemable, and, if so, the
terms and conditions of such redemption, including the date or dates upon
or after which they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions
and at different redemption rates;
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(vi)
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Whether
that series shall have a sinking fund for the redemption or purchase of
shares of that series, and, if so, the terms and amount of such sinking
fund;
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(vii)
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The
rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding-up of the corporation, and
the relative rights of priority, if any, of payment of shares of that
series; and
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(viii)
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Any
other relative rights, preferences, and limitations of that
series.
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(c)
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First
Reliance Bancshares, Inc., a corporation organized and existing under the
laws of South Carolina (the “Issuer”), in
accordance with the provisions of Section 33-6-102 of the South Carolina
Business Corporation Act of 1988, does hereby
certify:
|
|
The
board of directors of the Issuer (the “Board of
Directors”) or an applicable committee of the Board of Directors,
in accordance with the articles of incorporation and bylaws of the Issuer
and applicable law, adopted the following resolution on effective on March
2, 2009 creating a series of 15,349 shares of Preferred Stock of the
Issuer designated as “Fixed Rate Cumulative
Perpetual Preferred Stock, Series
A”.
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RESOLVED, that pursuant
to the provisions of the articles of incorporation and the bylaws of the Issuer and
applicable law, a series of Preferred Stock, no par value per share, of the
Issuer be and hereby is created, and that the designation and number of
shares of such series, and the voting and other powers, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations and restrictions thereof, of the shares of such series, are as
follows:
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2
First
Reliance Bancshares, Inc.
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Name of
Corporation
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Part
1.
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Designation and Number
of Shares. There is hereby created out of the authorized
and unissued shares of preferred stock of the Issuer a series of preferred
stock designated as the “Fixed Rate Cumulative Perpetual Preferred Stock,
Series A” (the “Designated
Preferred Stock”). The authorized number of shares of
Designated Preferred Stock shall be
15,349.
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Part
2.
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Standard
Provisions. The Standard Provisions contained in
Schedule A attached hereto are incorporated herein by reference in their
entirety and shall be deemed to be a part of this Certificate of
Designations to the same extent as if such provisions had been set forth
in full herein.
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Part
3.
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Definitions. The
following terms are used in this Certificate of Designations (including the
Standard Provisions in Schedule A hereto) as defined
below:
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(a) | “Common Stock” means the common stock, par value $0.01 per share, of the Issuer. | |
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(b)
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“Dividend Payment
Date” means February 15, May 15, August 15 and November 15 of each
year.
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(c)
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“Junior Stock”
means the Common Stock and any other class or series of stock of the
Issuer the terms of which expressly provide that it ranks junior to
Designated Preferred Stock as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of the
Issuer.
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(d)
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“Liquidation
Amount” means $1,000 per share of Designated Preferred
Stock.
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(e) | “Minimum Amount” means $3,837,250. |
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(f)
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“Parity Stock”
means any class or series of stock of the Issuer (other than Designated
Preferred Stock) the terms of which do not expressly provide that such
class or series will rank senior or junior to Designated Preferred Stock
as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of the Issuer (in each case without regard to whether dividends
accrue cumulatively or non-cumulatively).
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(g) | “Signing Date” means the Original Issue Date. |
Part.
4.
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Certain Voting
Matters. Holders of shares of Designated Preferred Stock
will be entitled to one vote for each such share on any matter on which
holders of Designated Preferred Stock are entitled to vote, including any
action by written consent.
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3
First
Reliance Bancshares, Inc.
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Name of
Corporation
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(d)
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First
Reliance Bancshares, Inc., a corporation organized and existing under the
laws of South Carolina (the “Issuer”), in
accordance with the provisions of Section 33-6-102 of the South Carolina
Business Corporation Act of 1988, does hereby
certify:
|
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The
board of directors of the Issuer (the “Board of
Directors”) or an applicable committee of the Board of Directors,
in accordance with the articles of incorporation and bylaws of the Issuer
and applicable law, adopted the following resolution on effective on March
2, 2009 creating a series of 767.00767 shares of Preferred Stock of the
Issuer designated as “Fixed Rate Cumulative
Perpetual Preferred Stock, Series
B”.
|
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RESOLVED, that pursuant
to the provisions of the articles of incorporation and the bylaws of the
Issuer and applicable law, a series of Preferred Stock, no par value per
share, of the Issuer be and hereby is created, and that the designation
and number of shares of such series, and the voting and other powers,
preferences and relative, participating, optional or other rights, and the
qualifications, limitations and restrictions thereof, of the shares of
such series, are as follows:
|
Part
1.
|
Designation and Number
of Shares. There is hereby created out of the authorized
and unissued shares of preferred stock of the Issuer a series of preferred
stock designated as the “Fixed Rate Cumulative Perpetual Preferred Stock,
Series B” (the “Designated
Preferred Stock”). The authorized number of
shares of Designated Preferred Stock shall be
767.00767.
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Part
2.
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Standard
Provisions. The Standard Provisions contained in
Schedule A attached hereto are incorporated herein by reference in their
entirety and shall be deemed to be a part of this Certificate of
Designations to the same extent as if such provisions had been set forth
in full herein.
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Part
3.
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Definitions. The
following terms are used in this Certificate of Designations (including the
Standard Provisions in Schedule A hereto) as defined
below:
|
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(a)
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“Common Stock”
means the common stock, par value $0.01 per share, of the
Issuer.
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(b)
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“Dividend Payment
Date” means February 15, May 15, August 15 and November 15 of each
year.
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(c)
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“Junior Stock”
means the Common Stock and any other class or series of stock of the
Issuer the terms of which expressly provide that it ranks junior to
Designated Preferred Stock as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of the
Issuer.
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(d)
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“Liquidation
Amount” means $1,000 per share of Designated Preferred
Stock.
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(e) | “Minimum Amount” means $191,863. |
4
First
Reliance Bancshares, Inc.
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Name of
Corporation
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(f)
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“Parity Stock”
means any class or series of stock of the Issuer (other than Designated
Preferred Stock) the terms of which do not expressly provide that such
class or series will rank senior or junior to Designated Preferred Stock
as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of the Issuer (in each case without regard to whether dividends
accrue cumulatively or non-cumulatively). Without limiting the
foregoing, Parity Stock shall include the Issuer’s UST Preferred
Stock.
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(g) | “Signing Date” means the Original Issue Date. |
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(h)
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“UST Preferred
Stock” means the Issuer’s Fixed Rate Cumulative Perpetual Preferred
Stock, Series A.
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Part.
4.
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Certain Voting
Matters. Holders of shares
of Designated Preferred Stock will be entitled to one vote for each such
share on any matter on which holders of Designated Preferred Stock are
entitled to vote, including any action by written
consent.
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(e)
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First
Reliance Bancshares, Inc., a corporation organized and existing under the
laws of South Carolina (the “Company”), in
accordance with the provisions of Section 33-6-102 of the South Carolina
Business Corporation Act of 1988, does hereby
certify:
|
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The
board of directors of the Company (the “Board of
Directors”) or an applicable committee of the Board of Directors,
in accordance with the articles of incorporation and bylaws of the Company
and applicable law, adopted the following resolution effective on March
18, 2010, as amended on March 30, 2010, creating a series of 15,000 shares
of Preferred Stock of the Company designated as “Fixed Rate Cumulative
Mandatorily Convertible Preferred Stock, Series
C”.
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RESOLVED, that pursuant
to the provisions of the articles of incorporation and the bylaws of the Company and
applicable law, a series of Preferred Stock, no par value per share, of the
Company be and hereby is created, and that the designation and number of
shares of such series, and the voting and other powers, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations and restrictions thereof, of the shares of such series, are as
follows:
|
Part
1.
|
Designation and Number
of Shares. There is hereby created out of the authorized
and unissued shares of preferred stock of the Company a series of
preferred stock designated as the “Fixed Rate Cumulative Mandatorily
Convertible Preferred Stock, Series C” (the “Series C
Preferred Stock”). The authorized number of shares of
Series C Preferred Stock shall be
15,000.
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Part
2.
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Standard
Provisions. The Standard Provisions contained in Schedule A
attached hereto are incorporated herein by reference in their entirety and
shall be deemed to be a part of this Certificate of Designations to the
same extent as if such provisions had been set forth in full
herein.
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5
First
Reliance Bancshares, Inc.
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Name of
Corporation
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Part
3.
|
Definitions. The
following terms are used in this Certificate of Designations as defined
below:
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(a)
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“Common Stock”
means the common stock, par value $0.01 per share, of the
Company.
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(b)
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“Dividend Payment
Date” means March 1, June 1, September 1, and December 1 of each
year beginning in year 2010.
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(c)
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“Junior Stock”
means the Common Stock and any other class or series of stock of the
Company the terms of which expressly provide that it ranks junior to
Series C Preferred Stock as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of the
Company.
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(d)
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“Liquidation
Amount” means $1,000 per share of Series C Preferred
Stock.
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(e)
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“Parity Stock”
means any class or series of stock of the Company the terms of which do
not expressly provide that such class or series will rank senior or junior
to Series C Preferred Stock as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of the Company (in each case
without regard to whether dividends accrue cumulatively or
non-cumulatively), including, without limiting the foregoing, the
Company’s Series A Preferred Stock and Series B Preferred
Stock.
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Part
4.
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Certain Voting
Matters. Holders of shares of Series C Preferred Stock
will not be entitled to vote on any matter submitted to the Company’s
shareholders except as provided by
law.
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4.
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The
existence of the corporation shall begin as of the filing date with the
Secretary of State unless a delayed date is indicated (See Section
33-1-230(b) of the 1976 South Carolina Code of Laws, as
amended)
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5.
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The
optional provisions, which the corporation elects to include in the
articles of incorporation, are as follows (See the applicable provisions
of Sections 33-2-102, 35-2-105, and 35-2-221 of the 1976 South Carolina
Code of Laws, as amended)
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6
First
Reliance Bancshares, Inc.
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Name of
Corporation
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6.
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The
name, address, and signature of each incorporator is as follows (only one
is required):
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a. | F. R. Saunders |
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Name |
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2170 W. Palmetto St.,
Florence, SC 29501
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Address | ||||
/s/ F. R.
Saunders
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Signature |
7.
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I, M. Craig Garner,
Jr.,
an attorney licensed to practice in the state of South Carolina, certify
that the corporation, to whose articles of incorporation this certificate
is attached, has complied with the requirements of Chapter 2,
Title 33 of the 1976 South Carolina Code of Laws, as amended,
relating to the articles of
incorporation.
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Date: April 12,
2001
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/s/
M. Craig Garner, Jr.
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Signature
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M.
Craig Garner, Jr.
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Type or Print Name | ||||
P. O. Box
11390
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Address
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Columbia, SC
29211
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(803)
799-9800
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Telephone
Number
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7
First
Reliance Bancshares, Inc.
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Name of
Corporation
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EXHIBIT
A
TO
ARTICLES
OF INCORPORATION
OF
FIRST
RELIANCE BANCSHARES, INC.
1.
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The
optional provisions which the corporation elects to include in the
articles of incorporation are as follows (see §33-2-102 and the applicable
comments thereto; and §§35-2-105 and 35-2-221 of the 1976
Code):
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(a)
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Purpose
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The
purpose of the corporation is to own capital stock in First Reliance Bank and
any other banks and financial institutions that it may hereafter acquire, in
whole or in part; to perform such services as may be permitted to be performed
by a bank holding company; to buy, sell, lease and operate real and personal
property; and to do all other acts permitted by law.
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(b)
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No Preemptive
Rights
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The
corporation elects not to have preemptive rights; therefore, no shareholder
shall have any preemptive right to purchase unissued shares of the
corporation.
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(c)
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No Cumulative Voting
Rights
|
The
corporation elects not to have cumulative voting; therefore, no shares of the
corporation may be voted cumulatively in the election of directors of the
corporation or for any other decision.
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(d)
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Limitation on
Liability of Directors
|
Effective
as of the earliest date on which such limitation of liability is allowed under
South Carolina law, and to the extent permitted by applicable state and federal
laws and regulations, no director of the corporation shall be personally liable
to the corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that the foregoing shall not
eliminate or limit the liability of a director (i) for any breach of the
director’s duty of loyalty to the corporation or its shareholders, (ii) for
acts or omissions not in good faith or which involve gross negligence,
intentional misconduct or a knowing violation of law, (iii) imposed for
unlawful distributions as set forth in Section 33-8-330 of the south Carolina
Business Corporation Act of 1988, as it may be amended from time to time, or any
successor thereto, or (iv) for any transaction from which the director
derived an improper personal benefit. Any repeal or modification of
the foregoing protection by the shareholders of the corporation shall not
adversely affect any right or protection of a director of the corporation
existing at the time of such repeal or modification.
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(e)
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Staggered Board of
Directors
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When the
number of directors constituting the corporation’s board of directors shall be
fixed at six or more members, in lieu of electing the whole number of directors
annually, the directors shall be divided into three classes, each class to be as
nearly equal in number as possible. The term of office of initial
directors of the first class shall expire at the first annual meeting of
shareholders after their election, that of the second class shall expire at the
second annual meeting after their election and that of the third class shall
expire at the third annual meeting after their election. At each
annual meeting after such classification, the number of directors equal to the
number of the class whose term expires at the time of such meeting shall be
elected to hold office until the third succeeding annual meeting. In
the event of any increase in the number of directors, the newly created
directorships resulting from such increase shall be apportioned among the three
classes of directors so as to maintain such classes as nearly equal in number as
possible.
8
First
Reliance Bancshares, Inc.
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||
Name of
Corporation
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SCHEDULE
A
TO
SECTION 3(c) OF THE
ARTICLES
OF INCORPORATION
OF
FIRST
RELIANCE BANCSHARES, INC.
STANDARD
PROVISIONS
Section
1. General
Matters. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred Stock.
The Designated Preferred Stock shall be perpetual, subject to the provisions of
Section 5 of these Standard Provisions that form a part of the Certificate of
Designations. The Designated Preferred Stock shall rank equally with Parity
Stock and shall rank senior to Junior Stock with respect to the payment of
dividends and the distribution of assets in the event of any dissolution,
liquidation or winding up of the Issuer.
Section
2. Standard
Definitions. As used herein with respect to Designated
Preferred Stock:
(a) “Applicable Dividend
Rate” means (i) during the period from the Original Issue Date to, but
excluding, the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 5% per annum and (ii) from and
after the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 9% per annum.
(b) “Appropriate Federal Banking
Agency” means the “appropriate Federal banking agency” with respect to
the Issuer as defined in Section 3 (q) of the Federal Deposit Insurance Act (12
U.S.C. Section 1813(q)), or any successor provision.
(c) “Business Combination”
means a merger, consolidation, statutory share exchange or similar transaction
that requires the approval of the Issuer’s stockholders.
(d) “Business Day” means
any day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.
(e) “Bylaws” means the
bylaws of the Issuer, as they may be amended from time to time.
(f) “Certificate of
Designations” means the Certificate of Designations or comparable
instrument relating to the Designated Preferred Stock, of which these Standard
Provisions form a part, as it may be amended from time to time.
(g) “Charter” means the
Issuer’s certificate or articles of incorporation, articles of association,
or similar organizational document.
(h) “Dividend Period” has
the meaning set forth in Section 3(a).
9
First
Reliance Bancshares, Inc.
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||
Name of
Corporation
|
(i) “Dividend Record Date”
has the meaning set forth in Section 3(a).
(j) “Liquidation
Preference” has the meaning set forth in Section 4(a).
(k) “Original Issue Date”
means the date on which shares of Designated Preferred Stock are first
issued.
(l) “Preferred Director”
has the meaning set forth in Section 7(b).
(m) “Preferred Stock”
means any and all series of preferred stock of the Issuer, including the
Designated Preferred Stock.
(n) “Qualified Equity
Offering” means the sale and issuance for cash by the Issuer to persons
other than the Issuer or any of its subsidiaries after the Original Issue Date
of shares of perpetual Preferred Stock, Common Stock or any combination of such
stock, that, in each case, qualify as and may be included in Tier 1 capital of
the Issuer at the time of issuance under the applicable risk-based capital
guidelines of the Issuer’s Appropriate Federal Banking Agency (other than any
such sales and issuances made pursuant to agreements or arrangements entered
into, or pursuant to financing plans which were publicly announced, on or prior
to November 17, 2008).
(o) “Standard Provisions”
mean these Standard Provisions that form a part of the Certificate of
Designations relating to the Designated Preferred Stock.
(p) “Successor Preferred
Stock” has the meaning set forth in Section 5(a).
(q) “Voting Parity Stock”
means, with regard to any matter as to which the holders of Designated Preferred
Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these
Standard Provisions that form a part of the Certificate of Designations, any and
all series of Parity Stock upon which like voting rights have been conferred and
are exercisable with respect to such matter.
Section
3. Dividends.
(a) Rate. Holders
of Designated Preferred Stock shall be entitled to receive, on each share of
Designated Preferred Stock if, as and when declared by the Board of Directors or
any duly authorized committee of the Board of Directors, but only out of assets
legally available therefor, cumulative cash dividends with respect to each
Dividend Period (as defined below) at a rate per annum equal to the Applicable
Dividend Rate on (i) the Liquidation Amount per share of Designated Preferred
Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend
Period on such share of Designated Preferred Stock, if any. Such
dividends shall begin to accrue and be cumulative from the Original Issue Date,
shall compound on each subsequent Dividend Payment Date (i.e., no dividends shall
accrue on other dividends unless and until the first Dividend Payment Date for
such other dividends has passed without such other dividends having been paid on
such date) and shall be payable quarterly in arrears on each Dividend Payment
Date, commencing with the first such Dividend Payment Date to occur at least 20
calendar days after the Original Issue Date. In the event that any
Dividend Payment Date would otherwise fall on a day that is not a Business Day,
the dividend payment due on that date will be postponed to the next day that is
a Business Day and no additional dividends will accrue as a result of that
postponement. The period from and including any Dividend Payment Date
to, but excluding, the next Dividend Payment Date is a “Dividend Period”,
provided that the initial Dividend
Period shall be the period from and including the Original Issue Date to, but
excluding, the next Dividend Payment Date.
10
First
Reliance Bancshares, Inc.
|
||
Name of
Corporation
|
Dividends
that are payable on Designated Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months. The amount of dividends payable on Designated Preferred Stock
on any date prior to the end of a Dividend Period, and for the initial Dividend
Period, shall be computed on the basis of a 360-day year consisting of twelve
30-day months, and actual days elapsed over a 30-day month.
Dividends
that are payable on Designated Preferred Stock on any Dividend Payment Date will
be payable to holders of record of Designated Preferred Stock as they appear on
the stock register of the Issuer on the applicable record date, which shall be
the 15th calendar day immediately preceding such Dividend Payment Date or such
other record date fixed by the Board of Directors or any duly authorized
committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a “Dividend Record
Date”). Any such day that is a Dividend Record Date shall be a
Dividend Record Date whether or not such day is a Business Day.
Holders
of Designated Preferred Stock shall not be entitled to any dividends, whether
payable in cash, securities or other property, other than dividends (if any)
declared and payable on Designated Preferred Stock as specified in this Section
3 (subject to the other provisions of the Certificate of
Designations).
(b) Priority of
Dividends. So long as any share of Designated Preferred Stock
remains
outstanding, no dividend or distribution shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than dividends payable solely
in shares of Common Stock) or Parity Stock, subject to the immediately following
paragraph in the case of Parity Stock, and no Common Stock, Junior Stock or
Parity Stock shall be, directly or indirectly, purchased, redeemed or otherwise
acquired for consideration by the Issuer or any of its subsidiaries unless all
accrued and unpaid dividends for all past Dividend Periods, including the latest
completed Dividend Period (including, if applicable as provided in Section 3(a)
above, dividends on such amount), on all outstanding shares of Designated
Preferred Stock have been or are contemporaneously declared and paid in full (or
have been declared and a sum sufficient for the payment thereof has been set
aside for the benefit of the holders of shares of Designated Preferred Stock on
the applicable record date). The foregoing limitation shall not apply
to (i) redemptions, purchases or other acquisitions of shares of Common Stock or
other Junior Stock in connection with the administration of any employee benefit
plan in the ordinary course of business and consistent with past practice; (ii)
the acquisition by the Issuer or any of its subsidiaries of record ownership in
Junior Stock or Parity Stock for the beneficial ownership of any other persons
(other than the Issuer or any of its subsidiaries), including as trustees or
custodians; and (iii) the exchange or conversion of Junior Stock for or into
other Junior Stock or of Parity Stock for or into other Parity Stock (with the
same or lesser aggregate liquidation amount) or Junior Stock, in each case,
solely to the extent required pursuant to binding contractual agreements entered
into prior to the Signing Date or any subsequent agreement for the accelerated
exercise, settlement or exchange thereof for Common Stock.
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When
dividends are not paid (or declared and a sum sufficient for payment thereof set
aside for the benefit of the holders thereof on the applicable record date) on
any Dividend Payment Date (or, in the case of Parity Stock having dividend
payment dates different from the Dividend Payment Dates, on a dividend payment
date falling within a Dividend Period related to such Dividend Payment Date) in
full upon Designated Preferred Stock and any shares of Parity Stock, all
dividends declared on Designated Preferred Stock and all such Parity Stock and
payable on such Dividend Payment Date (or, in the case of Parity Stock having
dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment
Date) shall be declared pro
rata so that the respective amounts of such dividends declared shall bear
the same ratio to each other as all accrued and unpaid dividends per share on
the shares of Designated Preferred Stock (including, if applicable as provided
in Section 3(a) above, dividends on such amount) and all Parity Stock payable on
such Dividend Payment Date (or, in the case of Parity Stock having dividend
payment dates different from the Dividend Payment Dates, on a dividend payment
date falling within the Dividend Period related to such Dividend Payment Date)
(subject to their having been declared by the Board of Directors or a duly
authorized committee of the Board of Directors out of legally available funds
and including, in the case of Parity Stock that bears cumulative dividends, all
accrued but unpaid dividends) bear to each other. If the Board of
Directors or a duly authorized committee of the Board of Directors determines
not to pay any dividend or a full dividend on a Dividend Payment Date, the
Issuer will provide written notice to the holders of Designated Preferred Stock
prior to such Dividend Payment Date.
Subject
to the foregoing, and not otherwise, such dividends (payable in cash, securities
or other property) as may be determined by the Board of Directors or any duly
authorized committee of the Board of Directors may be declared and paid on any
securities, including Common Stock and other Junior Stock, from time to time out
of any funds legally available for such payment, and holders of Designated
Preferred Stock shall not be entitled to participate in any such
dividends.
Section
4. Liquidation
Rights.
(a) Voluntary or Involuntary
Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of the Issuer, whether voluntary or involuntary,
holders of Designated Preferred Stock shall be entitled to receive for each
share of Designated Preferred Stock, out of the assets of the Issuer or proceeds
thereof (whether capital or surplus) available for distribution to stockholders
of the Issuer, subject to the rights of any creditors of the Issuer, before any
distribution of such assets or proceeds is made to or set aside for the holders
of Common Stock and any other stock of the Issuer ranking junior to Designated
Preferred Stock as to such distribution, payment in full in an amount equal to
the sum of (i) the Liquidation Amount per share and (ii) the amount of any
accrued and unpaid dividends (including, if applicable as provided in Section
3(a) above, dividends on such amount), whether or not declared, to the date of
payment (such amounts collectively, the “Liquidation
Preference”).
(b) Partial
Payment. If in any distribution described in Section 4(a)
above the assets of the Issuer or proceeds thereof are not sufficient to pay in
full the amounts payable with respect to all outstanding shares of Designated
Preferred Stock and the corresponding amounts payable with respect of any other
stock of the Issuer ranking equally with Designated Preferred Stock as to such
distribution, holders of Designated Preferred Stock and the holders of such
other stock shall share ratably in any such distribution in proportion to the
full respective distributions to which they are entitled.
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(c) Residual
Distributions. If the Liquidation Preference has been paid in
full to all holders of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Issuer ranking equally with
Designated Preferred Stock as to such distribution has been paid in full, the
holders of other stock of the Issuer shall be entitled to receive all remaining
assets of the Issuer (or proceeds thereof) according to their respective rights
and preferences.
(d) Merger, Consolidation and
Sale of Assets Not Liquidation. For purposes of this Section
4, the merger or consolidation of the Issuer with any other corporation or other
entity, including a merger or consolidation in which the holders of Designated
Preferred Stock receive cash, securities or other property for their shares, or
the sale, lease or exchange (for cash, securities or other property) of all or
substantially all of the assets of the Issuer, shall not constitute a
liquidation, dissolution or winding up of the Issuer.
Section
5. Redemption.
(a) Optional
Redemption. Except as provided below, the Designated Preferred
Stock may not
be redeemed prior to the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date. On or after the first Dividend
Payment Date falling on or after the third anniversary of the Original Issue
Date, the Issuer, at its option, subject to the approval of the Appropriate
Federal Banking Agency, may redeem, in whole or in part, at any time and from
time to time, out of funds legally available therefor, the shares of Designated
Preferred Stock at the time outstanding, upon notice given as provided in
Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any
accrued and unpaid dividends (including, if applicable as provided in Section
3(a) above, dividends on such amount) (regardless of whether any dividends are
actually declared) to, but excluding, the date fixed for
redemption.
Notwithstanding
the foregoing, prior to the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Issuer, at its option, subject
to the approval of the Appropriate Federal Banking Agency, may redeem, in whole
or in part, at any time and from time to time, the shares of Designated
Preferred Stock at the time outstanding, upon notice given as provided in
Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any
accrued and unpaid dividends (including, if applicable as provided in Section
3(a) above, dividends on such amount) (regardless of whether any dividends are
actually declared) to, but excluding, the date fixed for redemption; provided that (x) the Issuer
(or any successor by Business Combination) has received aggregate gross proceeds
of not less than the Minimum Amount (plus the “Minimum Amount” as defined in the
relevant certificate of designations for each other outstanding series of
preferred stock of such successor that was originally issued to the United
States Department of the Treasury (the “Successor Preferred
Stock”) in connection with the Troubled Asset Relief Program Capital
Purchase Program) from one or more Qualified Equity Offerings (including
Qualified Equity Offerings of such successor), and (y) the aggregate redemption
price of the Designated Preferred Stock (and any Successor Preferred Stock)
redeemed pursuant to this paragraph may not exceed the aggregate net cash
proceeds received by the Issuer (or any successor by Business Combination) from
such Qualified Equity Offerings (including Qualified Equity Offerings of such
successor).
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The
redemption price for any shares of Designated Preferred Stock shall be payable
on the redemption date to the holder of such shares against surrender of the
certificate(s) evidencing such shares to the Issuer or its agent. Any declared
but unpaid dividends payable on a redemption date that occurs subsequent to the
Dividend Record Date for a Dividend Period shall not be paid to the holder
entitled to receive the redemption price on the redemption date, but rather
shall be paid to the holder of record of the redeemed shares on such Dividend
Record Date relating to the Dividend Payment Date as provided in Section 3
above.
(b) No Sinking
Fund. The Designated Preferred Stock will not be subject to
any mandatory redemption, sinking fund or other similar provisions. Holders of
Designated Preferred Stock will have no right to require redemption or
repurchase of any shares of Designated Preferred Stock.
(c) Notice of
Redemption. Notice of every redemption of shares of Designated
Preferred Stock shall be given by first class mail, postage prepaid, addressed
to the holders of record of the shares to be redeemed at their respective last
addresses appearing on the books of the Issuer. Such mailing shall be
at least 30 days and not more than 60 days before the date fixed for redemption.
Any notice mailed as provided in this Subsection shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice, but
failure duly to give such notice by mail, or any defect in such notice or in the
mailing thereof, to any holder of shares of Designated Preferred Stock
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Designated Preferred Stock.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Company or any other
similar facility, notice of redemption may be given to the holders of Designated
Preferred Stock at such time and in any manner permitted by such facility. Each
notice of redemption given to a holder shall state: (1) the redemption date; (2)
the number of shares of Designated Preferred Stock to be redeemed and, if less
than all the shares held by such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (3) the redemption price; and (4) the
place or places where certificates for such shares are to be surrendered for
payment of the redemption price.
(d) Partial
Redemption. In case of any redemption of part of the shares of
Designated Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected either pro
rata or in such other manner as the Board of Directors or a duly
authorized committee thereof may determine to be fair and
equitable. Subject to the provisions hereof, the Board of Directors
or a duly authorized committee thereof shall have full power and authority to
prescribe the terms and conditions upon which shares of Designated Preferred
Stock shall be redeemed from time to time. If fewer than all the
shares represented by any certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without charge to the holder
thereof.
(e) Effectiveness of
Redemption. If notice of redemption has been duly given and if
on or before the redemption date specified in the notice all funds necessary for
the redemption have been deposited by the Issuer, in trust for the pro rata benefit of the
holders of the shares called for redemption, with a bank or trust company doing
business in the Borough of Manhattan, The City of New York, and having a capital
and surplus of at least $500 million and selected by the Board of Directors, so
as to be and continue to be available solely therefor, then, notwithstanding
that any certificate for any share so called for redemption has not been
surrendered for cancellation, on and after the redemption date dividends shall
cease to accrue on all shares so called for redemption, all shares so called for
redemption shall no longer be deemed outstanding and all rights with respect to
such shares shall forthwith on such redemption date cease and terminate, except
only the right of the holders thereof to receive the amount payable on such
redemption from such bank or trust company, without interest. Any
funds unclaimed at the end of three years from the redemption date shall, to the
extent permitted by law, be released to the Issuer, after which time the holders
of the shares so called for redemption shall look only to the Issuer for payment
of the redemption price of such shares.
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(f) Status of Redeemed
Shares. Shares of Designated Preferred Stock that are
redeemed,
repurchased or otherwise acquired by the Issuer shall revert to authorized but
unissued shares of Preferred Stock (provided that any such
cancelled shares of Designated Preferred Stock may be reissued only as shares of
any series of Preferred Stock other than Designated Preferred
Stock).
Section
6. Conversion. Holders
of Designated Preferred Stock shares shall have no right to exchange or convert
such shares into any other securities.
Section
7. Voting
Rights.
(a) General. The
holders of Designated Preferred Stock shall not have any voting rights except as
set forth below or as otherwise from time to time required by law.
(b) Preferred Stock
Directors. Whenever, at any time or times, dividends payable
on the shares of Designated Preferred Stock have not been paid for an aggregate
of six quarterly Dividend Periods or more, whether or not consecutive, the
authorized number of directors of the Issuer shall automatically be increased by
two and the holders of the Designated Preferred Stock shall have the right, with
holders of shares of any one or more other classes or series of Voting Parity
Stock outstanding at the time, voting together as a class, to elect two
directors (hereinafter the “Preferred
Directors” and
each a “Preferred
Director”) to
fill such newly created directorships at the Issuer’s next annual meeting of
stockholders (or at a special meeting called for that purpose prior to such next
annual meeting) and at each subsequent annual meeting of stockholders until all
accrued and unpaid dividends for all past Dividend Periods, including the latest
completed Dividend Period (including, if applicable as provided in Section 3(a)
above, dividends on such amount), on all outstanding shares of Designated
Preferred Stock have been declared and paid in full at which time such right
shall terminate with respect to the Designated Preferred Stock, except as herein
or by law expressly provided, subject to revesting in the event of each and
every subsequent default of the character above mentioned; provided that it shall be a
qualification for election for any Preferred Director that the election of such
Preferred Director shall not cause the Issuer to violate any corporate
governance requirements of any securities exchange or other trading facility on
which securities of the Issuer may then be listed or traded that listed or
traded companies must have a majority of independent directors. Upon
any termination of the right of the holders of shares of Designated Preferred
Stock and Voting Parity Stock as a class to vote for directors as provided
above, the Preferred Directors shall cease to be qualified as directors, the
term of office of all Preferred Directors then in office shall terminate
immediately and the authorized number of directors shall be reduced by the
number of Preferred Directors elected pursuant hereto. Any Preferred
Director may be removed at any time, with or without cause, and any vacancy
created thereby may be filled, only by the affirmative vote of the holders a
majority of the shares of Designated Preferred Stock at the time outstanding
voting separately as a class together with the holders of shares of Voting
Parity Stock, to the extent the voting rights of such holders described above
are then exercisable. If the office of any Preferred Director becomes
vacant for any reason other than removal from office as aforesaid, the remaining
Preferred Director may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred.
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(c) Class Voting Rights as to
Particular Matters. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of
stockholders required by law or by the Charter, the vote or consent of the
holders of at least 66 2/3% of the shares of Designated Preferred Stock at the
time outstanding, voting as a separate class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:
(i) Authorization of Senior
Stock. Any amendment or alteration of the Certificate of
Designations for the Designated Preferred Stock or the Charter to authorize or
create or increase the authorized amount of, or any issuance of, any shares of,
or any securities convertible into or exchangeable or exercisable for shares of,
any class or series of capital stock of the Issuer ranking senior to Designated
Preferred Stock with respect to either or both the payment of dividends and/or
the distribution of assets on any liquidation, dissolution or winding up of the
Issuer;
(ii) Amendment of Designated
Preferred Stock. Any amendment, alteration or repeal of any
provision of the Certificate of Designations for the Designated Preferred Stock
or the Charter (including, unless no vote on such merger or consolidation is
required by Section 7(c)(iii) below, any amendment, alteration or repeal by
means of a merger, consolidation or otherwise) so as to adversely affect the
rights, preferences, privileges or voting powers of the Designated Preferred
Stock; or
(iii) Share Exchanges,
Reclassifications, Mergers and Consolidations. Any
consummation of a binding share exchange or reclassification involving the
Designated Preferred Stock, or of a merger or consolidation of the Issuer with
another corporation or other entity, unless in each case (x) the shares of
Designated Preferred Stock remain outstanding or, in the case of any such merger
or consolidation with respect to which the Issuer is not the surviving or
resulting entity, are converted into or exchanged for preference securities of
the surviving or resulting entity or its ultimate parent, and (y) such shares
remaining outstanding or such preference securities, as the case may be, have
such rights, preferences, privileges and voting powers, and limitations and
restrictions thereof, taken as a whole, as are not materially less favorable to
the holders thereof than the rights, preferences, privileges and voting powers,
and limitations and restrictions thereof, of Designated Preferred Stock
immediately prior to such consummation, taken as a whole;
provided, however, that for all
purposes of this Section 7(c), any increase in the amount of the authorized
Preferred Stock, including any increase in the authorized amount of Designated
Preferred Stock necessary to satisfy preemptive or similar rights granted by the
Issuer to other persons prior to the Signing Date, or the creation and issuance,
or an increase in the authorized or issued amount, whether pursuant to
preemptive or similar rights or otherwise, of any other series of Preferred
Stock, or any securities convertible into or exchangeable or exercisable for any
other series of Preferred Stock, ranking equally with and/or junior to
Designated Preferred Stock with respect to the payment of dividends (whether
such dividends are cumulative or non-cumulative) and the distribution of assets
upon liquidation, dissolution or winding up of the Issuer will not be deemed to
adversely affect the rights, preferences, privileges or voting powers, and shall
not require the affirmative vote or consent of, the holders of outstanding
shares of the Designated Preferred Stock.
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(d) Changes after Provision for
Redemption. No vote or consent of the holders of Designated
Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior
to the time when any such vote or consent would otherwise be required pursuant
to such Section, all outstanding shares of the Designated Preferred Stock shall
have been redeemed, or shall have been called for redemption upon proper notice
and sufficient funds shall have been deposited in trust for such redemption, in
each case pursuant to Section 5 above.
(e) Procedures for Voting and
Consents. The rules and procedures for calling and conducting
any meeting of the holders of Designated Preferred Stock (including, without
limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules of the Board of Directors or any duly
authorized committee of the Board of Directors, in its discretion, may adopt
from time to time, which rules and procedures shall conform to the requirements
of the Charter, the Bylaws, and applicable law and the rules of any national
securities exchange or other trading facility on which Designated Preferred
Stock is listed or traded at the time.
Section
8. Record
Holders. To the fullest extent permitted by applicable law,
the Issuer and the transfer agent for Designated Preferred Stock may deem and
treat the record holder of any share of Designated Preferred Stock as the true
and lawful owner thereof for all purposes, and neither the Issuer nor such
transfer agent shall be affected by any notice to the contrary.
Section
9. Notices. All
notices or communications in respect of Designated Preferred Stock shall be
sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in
this Certificate of Designations, in the Charter or Bylaws or by applicable
law. Notwithstanding the foregoing, if shares of Designated Preferred
Stock are issued in book-entry form through The Depository Trust Company or any
similar facility, such notices may be given to the holders of Designated
Preferred Stock in any manner permitted by such facility.
Section
10. No
Preemptive Rights. No share of Designated Preferred Stock
shall have any rights of preemption whatsoever as to any securities of the
Issuer, or any warrants, rights or options issued or granted with respect
thereto, regardless of how such securities, or such warrants, rights or options,
may be designated, issued or granted.
Section
11. Replacement
Certificates. The Issuer shall replace any mutilated
certificate at the holder’s expense upon surrender of that certificate to the
Issuer. The Issuer shall replace certificates that become destroyed,
stolen or lost at the holder’s expense upon delivery to the Issuer of reasonably
satisfactory evidence that the certificate has been destroyed, stolen or lost,
together with any indemnity that may be reasonably required by the
Issuer.
Section
12. Other
Rights. The shares of Designated Preferred Stock shall not
have any rights, preferences, privileges or voting powers or relative,
participating, optional or other special rights, or qualifications, limitations
or restrictions thereof, other than as set forth herein or in the Charter or as
provided by applicable law.
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SCHEDULE
A
TO
SECTION 3(d) OF THE
ARTICLES
OF INCORPORATION
OF
FIRST
RELIANCE BANCSHARES, INC.
STANDARD
PROVISIONS
Section
1. General
Matters. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred
Stock. The Designated Preferred Stock shall be perpetual, subject to
the provisions of Section 5 of these Standard Provisions that form a part of the
Certificate of Designations. The Designated Preferred Stock shall
rank equally with Parity Stock and shall rank senior to Junior Stock with
respect to the payment of dividends and the distribution of assets in the event
of any dissolution, liquidation or winding up of the Issuer.
Section
2. Standard
Definitions. As used herein with respect to Designated
Preferred Stock:
(a) “Appropriate Federal Banking
Agency” means the “appropriate Federal banking agency”
with respect to the Issuer as defined in Section 3 (q) of the Federal Deposit
Insurance Act (12 U.S.C. Section 1813(q)), or any successor
provision.
(b) “Business Combination”
means a merger, consolidation, statutory share exchange
or similar transaction that requires the approval of the Issuer’s
stockholders.
(c) “Business Day” means
any day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.
(d) “Bylaws” means the
bylaws of the Issuer, as they may be amended from time to time.
(e) “Certificate of
Designations” means the Certificate of Designations or comparable
instrument relating to the Designated Preferred Stock, of which these Standard
Provisions form a part, as it may be amended from time to time.
(f) “Charter” means the
Issuer’s certificate or articles of incorporation, articles of association, or
similar organizational document.
(g) “Dividend Period” has
the meaning set forth in Section 3(a).
(h) “Dividend Record Date”
has the meaning set forth in Section 3(a).
(i) “Liquidation
Preference” has the meaning set forth in Section 4(a).
(j) “Original Issue Date”
means the date on which shares of Designated Preferred Stock are first
issued.
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(k) “Preferred Director”
has the meaning set forth in Section 7(b).
(l) “Preferred Stock”
means any and all series of preferred stock of the Issuer, including the
Designated Preferred Stock.
(m) “Qualified Equity
Offering” means the sale and issuance for cash by the Issuer to persons
other than the Issuer or any of its subsidiaries after the Original Issue Date
of shares of perpetual Preferred Stock, Common Stock or any combination of such
stock, that, in each case, qualify as and may be included in Tier 1 capital of
the Issuer at the time of issuance under the applicable risk-based capital
guidelines of the Issuer’s Appropriate Federal Banking Agency (other than any
such sales and issuances made pursuant to agreements or arrangements entered
into, or pursuant to financing plans which were publicly announced, on or prior
to November 17, 2008).
(n) “Standard Provisions”
mean these Standard Provisions that form a part of the Certificate of
Designations relating to the Designated Preferred Stock.
(o) “Successor Preferred
Stock” has the meaning set forth in Section 5(a).
(p) “Voting Parity Stock”
means, with regard to any matter as to which the holders of Designated Preferred
Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these
Standard Provisions that form a part of the Certificate of Designations, any and
all series of Parity Stock upon which like voting rights have been conferred and
are exercisable with respect to such matter.
Section
3. Dividends.
(a) Rate. Holders
of Designated Preferred Stock shall be entitled to receive, on each share of
Designated Preferred Stock if, as and when declared by the Board of Directors or
any duly authorized committee of the Board of Directors, but only out of assets
legally available therefor, cumulative cash dividends with respect to each
Dividend Period (as defined below) at a per annum rate of 9.0% on (i) the
Liquidation Amount per share of Designated Preferred Stock and (ii) the amount
of accrued and unpaid dividends for any prior Dividend Period on such share of
Designated Preferred Stock, if any. Such dividends shall begin to accrue and be
cumulative from the Original Issue Date, shall compound on each subsequent
Dividend Payment Date (i.e., no dividends shall
accrue on other dividends unless and until the first Dividend Payment Date for
such other dividends has passed without such other dividends having been paid on
such date) and shall be payable quarterly in arrears on each Dividend Payment
Date, commencing with the first such Dividend Payment Date to occur at least 20
calendar days after the Original Issue Date. In the event that any
Dividend Payment Date would otherwise fall on a day that is not a Business Day,
the dividend payment due on that date will be postponed to the next day that is
a Business Day and no additional dividends will accrue as a result of that
postponement. The period from and including any Dividend Payment Date
to, but excluding, the next Dividend Payment Date is a “Dividend Period”,
provided that the initial Dividend Period shall be the period from and including
the Original Issue Date to, but excluding, the next Dividend Payment
Date.
Dividends
that are payable on Designated Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months. The amount of dividends payable on Designated Preferred Stock
on any date prior to the end of a Dividend Period, and for the initial Dividend
Period, shall be computed on the basis of a 360-day year consisting of twelve
30-day months, and actual days elapsed over a 30-day month.
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Dividends
that are payable on Designated Preferred Stock on any Dividend Payment Date will
be payable to holders of record of Designated Preferred Stock as they appear on
the stock register of the Issuer on the applicable record date, which shall be
the 15th calendar day immediately preceding such Dividend Payment Date or such
other record date fixed by the Board of Directors or any duly authorized
committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a “Dividend Record
Date”). Any such day that is a Dividend Record Date shall be a
Dividend Record Date whether or not such day is a Business Day.
Holders
of Designated Preferred Stock shall not be entitled to any dividends, whether
payable in cash, securities or other property, other than dividends (if any)
declared and payable on Designated Preferred Stock as specified in this Section
3 (subject to the other provisions of the Certificate of
Designations).
(b) Priority of
Dividends. So long as any share of Designated Preferred Stock
remains outstanding, no dividend or distribution shall be declared or paid on
the Common Stock or any other shares of Junior Stock (other than dividends
payable solely in shares of Common Stock) or Parity Stock, subject to the
immediately following paragraph in the case of Parity Stock, and no Common
Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased,
redeemed or otherwise acquired for consideration by the Issuer or any of its
subsidiaries unless all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if
applicable as provided in Section 3(a) above, dividends on such amount), on all
outstanding shares of Designated Preferred Stock have been or are
contemporaneously declared and paid in full (or have been declared and a sum
sufficient for the payment thereof has been set aside for the benefit of the
holders of shares of Designated Preferred Stock on the applicable record
date). The foregoing limitation shall not apply to (i) redemptions,
purchases or other acquisitions of shares of Common Stock or other Junior Stock
in connection with the administration of any employee benefit plan in the
ordinary course of business and consistent with past practice; (ii) the
acquisition by the Issuer or any of its subsidiaries of record ownership in
Junior Stock or Parity Stock for the beneficial ownership of any other persons
(other than the Issuer or any of its subsidiaries), including as trustees or
custodians; and (iii) the exchange or conversion of Junior Stock for or into
other Junior Stock or of Parity Stock for or into other Parity Stock (with the
same or lesser aggregate liquidation amount) or Junior Stock, in each case,
solely to the extent required pursuant to binding contractual agreements entered
into prior to the Signing Date or any subsequent agreement for the accelerated
exercise, settlement or exchange thereof for Common Stock.
When
dividends are not paid (or declared and a sum sufficient for payment thereof set
aside for the benefit of the holders thereof on the applicable record date) on
any Dividend Payment Date (or, in the case of Parity Stock having dividend
payment dates different from the Dividend Payment Dates, on a dividend payment
date falling within a Dividend Period related to such Dividend Payment Date) in
full upon Designated Preferred Stock and any shares of Parity Stock, all
dividends declared on Designated Preferred Stock and all such Parity Stock and
payable on such Dividend Payment Date (or, in the case of Parity Stock having
dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment
Date) shall be declared pro
rata so that the respective amounts of such dividends declared shall bear
the same ratio to each other as all accrued and unpaid dividends per share on
the shares of Designated Preferred Stock (including, if applicable as provided
in Section 3(a) above, dividends on such amount) and all Parity Stock payable on
such Dividend Payment Date (or, in the case of Parity Stock having dividend
payment dates different from the Dividend Payment Dates, on a dividend payment
date falling within the Dividend Period related to such Dividend Payment Date)
(subject to their having been declared by the Board of Directors or a duly
authorized committee of the Board of Directors out of legally available funds
and including, in the case of Parity Stock that bears cumulative dividends, all
accrued but unpaid dividends) bear to each other. If the Board of
Directors or a duly authorized committee of the Board of Directors determines
not to pay any dividend or a full dividend on a Dividend Payment Date, the
Issuer will provide written notice to the holders of Designated Preferred Stock
prior to such Dividend Payment Date.
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Subject
to the foregoing, and not otherwise, such dividends (payable in cash, securities
or other property) as may be determined by the Board of Directors or any duly
authorized committee of the Board of Directors may be declared and paid on any
securities, including Common Stock and other Junior Stock, from time to time out
of any funds legally available for such payment, and holders of Designated
Preferred Stock shall not be entitled to participate in any such
dividends.
Section
4. Liquidation
Rights.
(a) Voluntary or Involuntary
Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of the Issuer, whether voluntary or involuntary,
holders of Designated Preferred Stock shall be entitled to receive for each
share of Designated Preferred Stock, out of the assets of the Issuer or proceeds
thereof (whether capital or surplus) available for distribution to stockholders
of the Issuer, subject to the rights of any creditors of the Issuer, before any
distribution of such assets or proceeds is made to or set aside for the holders
of Common Stock and any other stock of the Issuer ranking junior to Designated
Preferred Stock as to such distribution, payment in full in an amount equal to
the sum of (i) the Liquidation Amount per share and (ii) the amount of any
accrued and unpaid dividends (including, if applicable as provided in Section
3(a) above, dividends on such amount), whether or not declared, to the date of
payment (such amounts collectively, the “Liquidation
Preference”).
(b) Partial
Payment. If in any distribution described in Section 4(a)
above the assets of the Issuer or proceeds thereof are not sufficient to pay in
full the amounts payable with respect to all outstanding shares of Designated
Preferred Stock and the corresponding amounts payable with respect of any other
stock of the Issuer ranking equally with Designated Preferred Stock as to such
distribution, holders of Designated Preferred Stock and the holders of such
other stock shall share ratably in any such distribution in proportion to the
full respective distributions to which they are entitled.
(c) Residual
Distributions. If the Liquidation Preference has been paid in
full to all holders of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Issuer ranking equally with
Designated Preferred Stock as to such distribution has been paid in full, the
holders of other stock of the Issuer shall be entitled to receive all remaining
assets of the Issuer (or proceeds thereof) according to their respective rights
and preferences.
(d) Merger, Consolidation and
Sale of Assets Not Liquidation. For purposes of this Section
4, the merger or consolidation of the Issuer with any other corporation or other
entity, including a merger or consolidation in which the holders of Designated
Preferred Stock receive cash, securities or other property for their shares, or
the sale, lease or exchange (for cash, securities or other property) of all or
substantially all of the assets of the Issuer, shall not constitute a
liquidation, dissolution or winding up of the Issuer.
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Section
5. Redemption.
(a) Optional
Redemption. Except as provided below, the Designated Preferred
Stock may not be redeemed prior to the later of (i) first Dividend Payment Date
falling on or after the third anniversary of the Original Issue Date; and (ii)
the date on which all outstanding shares of UST Preferred Stock have been
redeemed, repurchased or otherwise acquired by the Issuer. On or after the first
Dividend Payment Date falling on or after the third anniversary of the Original
Issue Date, the Issuer, at its option, subject to the approval of the
Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, out of funds legally available therefor, the shares of
Designated Preferred Stock at the time outstanding, upon notice given as
provided in Section 5(c) below, at a redemption price equal to the sum of (i)
the Liquidation Amount per share and (ii) except as otherwise provided below,
any accrued and unpaid dividends (including, if applicable as provided in
Section 3(a) above, dividends on such amount) (regardless of whether any
dividends are actually declared) to, but excluding, the date fixed for
redemption.
Notwithstanding
the foregoing, prior to the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Issuer, at its option, subject
to the approval of the Appropriate Federal Banking Agency and subject to the
requirement that all outstanding shares of UST Preferred Stock shall previously
have been redeemed, repurchased or otherwise acquired by the Issuer, may redeem,
in whole or in part, at any time and from time to time, the shares of Designated
Preferred Stock at the time outstanding, upon notice given as provided in
Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any
accrued and unpaid dividends (including, if applicable as provided in Section
3(a) above, dividends on such amount) (regardless of whether any dividends are
actually declared) to, but excluding, the date fixed for redemption; provided that (x) the Issuer
(or any successor by Business Combination) has received aggregate gross proceeds
of not less than the Minimum Amount (plus the “Minimum Amount” as defined in the
relevant certificate of designations for each other outstanding series of
preferred stock of such successor that was originally issued to the United
States Department of the Treasury (the “Successor Preferred
Stock”) in connection with the Troubled Asset Relief Program Capital
Purchase Program) from one or more Qualified Equity Offerings (including
Qualified Equity Offerings of such successor), and (y) the aggregate redemption
price of the Designated Preferred Stock (and any Successor Preferred Stock)
redeemed pursuant to this paragraph may not exceed the aggregate net cash
proceeds received by the Issuer (or any successor by Business Combination) from
such Qualified Equity Offerings (including Qualified Equity Offerings of such
successor).
The
redemption price for any shares of Designated Preferred Stock shall be payable
on the redemption date to the holder of such shares against surrender of the
certificate(s) evidencing such shares to the Issuer or its agent. Any declared
but unpaid dividends payable on a redemption date that occurs subsequent to the
Dividend Record Date for a Dividend Period shall not be paid to the holder
entitled to receive the redemption price on the redemption date, but rather
shall be paid to the holder of record of the redeemed shares on such Dividend
Record Date relating to the Dividend Payment Date as provided in Section 3
above.
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(b) No Sinking
Fund. The Designated Preferred Stock will not be subject to
any mandatory redemption, sinking fund or other similar provisions. Holders of
Designated Preferred Stock will have no right to require redemption or
repurchase of any shares of Designated Preferred Stock.
(c) Notice of
Redemption. Notice of every redemption of shares of Designated
Preferred Stock shall be given by first class mail, postage prepaid, addressed
to the holders of record of the shares to be redeemed at their respective last
addresses appearing on the books of the Issuer. Such mailing shall be at least
30 days and not more than 60 days before the date fixed for
redemption. Any notice mailed as provided in this Subsection shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice, but failure duly to give such notice by mail, or any
defect in such notice or in the mailing thereof, to any holder of shares of
Designated Preferred Stock designated for redemption shall not affect the
validity of the proceedings for the redemption of any other shares of Designated
Preferred Stock. Notwithstanding the foregoing, if shares of Designated
Preferred Stock are issued in book-entry form through The Depository Trust
Company or any other similar facility, notice of redemption may be given to the
holders of Designated Preferred Stock at such time and in any manner permitted
by such facility. Each notice of redemption given to a holder shall state: (1)
the redemption date; (2) the number of shares of Designated Preferred Stock to
be redeemed and, if less than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (3) the
redemption price; and (4) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price.
(d) Partial
Redemption. In case of any redemption of part of the shares of
Designated Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected either pro
rata or in such other manner as the Board of Directors or a duly
authorized committee thereof may determine to be fair and equitable. Subject to
the provisions hereof, the Board of Directors or a duly authorized committee
thereof shall have full power and authority to prescribe the terms and
conditions upon which shares of Designated Preferred Stock shall be redeemed
from time to time. If fewer than all the shares represented by any
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without charge to the holder thereof.
(e) Effectiveness of
Redemption. If notice of redemption has been duly given and if
on or before the redemption date specified in the notice all funds necessary for
the redemption have been deposited by the Issuer, in trust for the pro rata benefit of the
holders of the shares called for redemption, with a bank or trust company doing
business in the Borough of Manhattan, The City of New York, and having a capital
and surplus of at least $500 million and selected by the Board of Directors, so
as to be and continue to be available solely therefor, then, notwithstanding
that any certificate for any share so called for redemption has not been
surrendered for cancellation, on and after the redemption date dividends shall
cease to accrue on all shares so called for redemption, all shares so called for
redemption shall no longer be deemed outstanding and all rights with respect to
such shares shall forthwith on such redemption date cease and terminate, except
only the right of the holders thereof to receive the amount payable on such
redemption from such bank or trust company, without interest. Any
funds unclaimed at the end of three years from the redemption date shall, to the
extent permitted by law, be released to the Issuer, after which time the holders
of the shares so called for redemption shall look only to the Issuer for payment
of the redemption price of such shares.
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(f) Status of Redeemed
Shares. Shares of Designated Preferred Stock that are
redeemed, repurchased or otherwise acquired by the Issuer shall revert to
authorized but unissued shares of Preferred Stock (provided that any such
cancelled shares of Designated Preferred Stock may be reissued only as shares of
any series of Preferred Stock other than Designated Preferred
Stock).
Section
6. Conversion. Holders
of Designated Preferred Stock shares shall have no right to exchange or convert
such shares into any other securities.
Section
7. Voting
Rights.
(a) General. The
holders of Designated Preferred Stock shall not have any voting rights except as
set forth below or as otherwise from time to time required by law.
(b) Preferred Stock
Directors. Whenever, at any time or times, dividends payable
on the shares of Designated Preferred Stock have not been paid for an aggregate
of six quarterly Dividend Periods or more, whether or not consecutive, the
authorized number of directors of the Issuer shall automatically be increased by
two and the holders of the Designated Preferred Stock shall have the right, with
holders of shares of any one or more other classes or series of Voting Parity
Stock outstanding at the time, voting together as a class, to elect two
directors (hereinafter the “Preferred
Directors” and
each a “Preferred
Director”) to
fill such newly created directorships at the Issuer’s next annual meeting of
stockholders (or at a special meeting called for that purpose prior to such next
annual meeting) and at each subsequent annual meeting of stockholders until all
accrued and unpaid dividends for all past Dividend Periods, including the latest
completed Dividend Period (including, if applicable as provided in Section 3(a)
above, dividends on such amount), on all outstanding shares of Designated
Preferred Stock have been declared and paid in full at which time such right
shall terminate with respect to the Designated Preferred Stock, except as herein
or by law expressly provided, subject to revesting in the event of each and
every subsequent default of the character above mentioned; provided that it shall be a
qualification for election for any Preferred Director that the election of such
Preferred Director shall not cause the Issuer to violate any corporate
governance requirements of any securities exchange or other trading facility on
which securities of the Issuer may then be listed or traded that listed or
traded companies must have a majority of independent directors. Upon
any termination of the right of the holders of shares of Designated Preferred
Stock and Voting Parity Stock as a class to vote for directors as provided
above, the Preferred Directors shall cease to be qualified as directors, the
term of office of all Preferred Directors then in office shall terminate
immediately and the authorized number of directors shall be reduced by the
number of Preferred Directors elected pursuant hereto. Any Preferred Director
may be removed at any time, with or without cause, and any vacancy created
thereby may be filled, only by the affirmative vote of the holders a majority of
the shares of Designated Preferred Stock at the time outstanding voting
separately as a class together with the holders of shares of Voting Parity
Stock, to the extent the voting rights of such holders described above are then
exercisable. If the office of any Preferred Director becomes vacant
for any reason other than removal from office as aforesaid, the remaining
Preferred Director may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred.
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(c) Class Voting Rights as to
Particular Matters. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of
stockholders required by law or by the Charter, the vote or consent of the
holders of at least 66 2/3% of the shares of Designated Preferred Stock at the
time outstanding, voting as a separate class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:
(i) Authorization of Senior
Stock. Any amendment or alteration of the Certificate of
Designations for the Designated Preferred Stock or the Charter to authorize or
create or increase the authorized amount of, or any issuance of, any shares of,
or any securities convertible into or exchangeable or exercisable for shares of,
any class or series of capital stock of the Issuer ranking senior to Designated
Preferred Stock with respect to either or both the payment of dividends and/or
the distribution of assets on any liquidation, dissolution or winding up of the
Issuer;
(ii) Amendment of Designated
Preferred Stock. Any amendment, alteration or repeal of any
provision of the Certificate of Designations for the Designated Preferred Stock
or the Charter (including, unless no vote on such merger or consolidation is
required by Section 7(c)(iii) below, any amendment, alteration or repeal by
means of a merger, consolidation or otherwise) so as to adversely affect the
rights, preferences, privileges or voting powers of the Designated Preferred
Stock; or
(iii) Share Exchanges,
Reclassifications, Mergers and Consolidations. Any
consummation of a binding share exchange or reclassification involving the
Designated Preferred Stock, or of a merger or consolidation of the Issuer with
another corporation or other entity, unless in each case (x) the shares of
Designated Preferred Stock remain outstanding or, in the case of any such merger
or consolidation with respect to which the Issuer is not the surviving or
resulting entity, are converted into or exchanged for preference securities of
the surviving or resulting entity or its ultimate parent, and (y) such shares
remaining outstanding or such preference securities, as the case may be, have
such rights, preferences, privileges and voting powers, and limitations and
restrictions thereof, taken as a whole, as are not materially less favorable to
the holders thereof than the rights, preferences, privileges and voting powers,
and limitations and restrictions thereof, of Designated Preferred Stock
immediately prior to such consummation, taken as a whole;
provided, however, that for all
purposes of this Section 7(c), any increase in the amount of the authorized
Preferred Stock, including any increase in the authorized amount of Designated
Preferred Stock necessary to satisfy preemptive or similar rights granted by the
Issuer to other persons prior to the Signing Date, or the creation and issuance,
or an increase in the authorized or issued amount, whether pursuant to
preemptive or similar rights or otherwise, of any other series of Preferred
Stock, or any securities convertible into or exchangeable or exercisable for any
other series of Preferred Stock, ranking equally with and/or junior to
Designated Preferred Stock with respect to the payment of dividends (whether
such dividends are cumulative or non-cumulative) and the distribution of assets
upon liquidation, dissolution or winding up of the Issuer will not be deemed to
adversely affect the rights, preferences, privileges or voting powers, and shall
not require the affirmative vote or consent of, the holders of outstanding
shares of the Designated Preferred Stock.
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(d) Changes after Provision for
Redemption. No vote or consent of the holders of Designated
Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior
to the time when any such vote or consent would otherwise be required pursuant
to such Section, all outstanding shares of the Designated Preferred Stock shall
have been redeemed, or shall have been called for redemption upon proper notice
and sufficient funds shall have been deposited in trust for such redemption, in
each case pursuant to Section 5 above.
(e) Procedures for Voting and
Consents. The rules and procedures for calling and conducting
any meeting of the holders of Designated Preferred Stock (including, without
limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules of the Board of Directors or any duly
authorized committee of the Board of Directors, in its discretion, may adopt
from time to time, which rules and procedures shall conform to the requirements
of the Charter, the Bylaws, and applicable law and the rules of any national
securities exchange or other trading facility on which Designated Preferred
Stock is listed or traded at the time.
Section
8. Record
Holders. To the fullest extent permitted by applicable law,
the Issuer and the transfer agent for Designated Preferred Stock may deem and
treat the record holder of any share of Designated Preferred Stock as the true
and lawful owner thereof for all purposes, and neither the Issuer nor such
transfer agent shall be affected by any notice to the contrary.
Section
9. Notices. All
notices or communications in respect of Designated Preferred Stock shall be
sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in
this Certificate of Designations, in the Charter or Bylaws or by applicable law.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Company or any similar
facility, such notices may be given to the holders of Designated Preferred Stock
in any manner permitted by such facility.
Section
10. No
Preemptive Rights. No share of Designated Preferred Stock
shall have any rights of preemption whatsoever as to any securities of the
Issuer, or any warrants, rights or options issued or granted with respect
thereto, regardless of how such securities, or such warrants, rights or options,
may be designated, issued or granted.
Section
11. Replacement
Certificates. The Issuer shall replace any mutilated
certificate at the holder’s expense upon surrender of that certificate to the
Issuer. The Issuer shall replace certificates that become destroyed,
stolen or lost at the holder’s expense upon delivery to the Issuer of reasonably
satisfactory evidence that the certificate has been destroyed, stolen or lost,
together with any indemnity that may be reasonably required by the
Issuer.
Section 12. Other
Rights. The shares of Designated Preferred Stock shall not
have any rights, preferences, privileges or voting powers or relative,
participating, optional or other special rights, or qualifications, limitations
or restrictions thereof, other than as set forth herein or in the Charter or as
provided by applicable law.
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SCHEDULE
A
TO
SECTION 3(e) OF THE
ARTICLES
OF INCORPORATION
OF
FIRST
RELIANCE BANCSHARES, INC.
STANDARD
PROVISIONS
Section
1. General
Matters. Each share of Series C Preferred Stock shall be
identical in all respects to every other share of Series C Preferred Stock. The
Series C Preferred Stock shall rank equally with Parity Stock and shall rank
senior to Junior Stock with respect to the payment of dividends and the
distribution of assets in the event of any dissolution, liquidation or winding
up of the Company.
Section 2. Standard
Definitions. As used herein with respect to Series C Preferred
Stock:
(a)
“Business Day”
means any day except Saturday, Sunday and any day on which banking institutions
in the State of New York generally are authorized or required by law or other
governmental actions to close.
(b) “Bylaws” means the
bylaws of the Company, as they may be amended from time to time.
(c) “Cap” has the meaning
set forth in Section 5(a)(i), as may be adjusted from time to time in accordance
with Sections 5(e) or 5(f).
(d) “Certificate of
Designations” means the Certificate of Designations of which these
Standard Provisions form a part, as it may be amended from time to
time.
(e) “Charter” means the
Company’s articles of incorporation, as amended.
(f) “Conversion Price” has
the meaning set for in Section 5(a)(i).
(g) “Dividend Period” has
the meaning set forth in Section 3(a).
(h) “Dividend Record Date”
has the meaning set forth in Section 3(a).
(i) “Liquidation
Preference” has the meaning set forth in Section 4(a).
(j) “Mandatory Conversion
Date” means July 31, 2013.
(k) “Original Issue Date”
means the date on which shares of Series C Preferred Stock are first
issued.
(l) “Preferred Stock”
means any and all series of preferred stock of the Company, including the Series
C Preferred Stock.
(m)
“Standard
Provisions” mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Series C Preferred
Stock.
(n) “Voting Parity Stock”
means, with regard to any matter as to which the holders of Series C Preferred
Stock are entitled to vote as required by law, any and all series of Parity
Stock upon which like voting rights have been conferred and are exercisable with
respect to such matter.
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Section 3. Dividends.
(a) Rate. Holders
of Series C Preferred Stock shall be entitled to receive, on each share of
Series C Preferred Stock if, as and when declared by the Board of Directors or
any duly authorized committee of the Board of Directors, but only out of assets
legally available therefor, cumulative cash dividends with respect to each
Dividend Period (as defined below) at a per annum rate of 7.0% on (i) the
Liquidation Amount per share of Series C Preferred Stock and (ii) the amount of
accrued and unpaid dividends for any prior Dividend Period on such share of
Series C Preferred Stock, if any. Such dividends shall begin to accrue and be
cumulative from the Original Issue Date, shall compound on each subsequent
Dividend Payment Date (i.e., no dividends shall
accrue on other dividends unless and until the first Dividend Payment Date for
such other dividends has passed without such other dividends having been paid on
such date) and shall be payable quarterly in arrears on each Dividend Payment
Date. In the event that any Dividend Payment Date would otherwise
fall on a day that is not a Business Day, the dividend payment due on that date
will be postponed to the next day that is a Business Day and no additional
dividends will accrue as a result of that postponement. The period
from and including any Dividend Payment Date to, but excluding, the next
Dividend Payment Date is a “Dividend Period”,
provided that the initial Dividend Period shall be the period from and including
the Original Issue Date to, but excluding, the next Dividend Payment
Date.
Dividends
that are payable on Series C Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months. The amount of dividends payable on Series C Preferred Stock
on any date prior to the end of a Dividend Period, and for the initial Dividend
Period, shall be computed on the basis of a 360-day year consisting of twelve
30-day months, and actual days elapsed over a 30-day month.
Dividends
that are payable on Series C Preferred Stock on any Dividend Payment Date will
be payable to holders of record of Series C Preferred Stock as they appear on
the stock register of the Company on the applicable record date, which shall be
the 15th calendar day immediately preceding such Dividend Payment Date or such
other record date fixed by the Board of Directors or any duly authorized
committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a “Dividend Record
Date”). Any such day that is a Dividend Record Date shall be a
Dividend Record Date whether or not such day is a Business Day.
Holders
of Series C Preferred Stock shall not be entitled to any dividends, whether
payable in cash, securities or other property, other than dividends (if any)
declared and payable on Series C Preferred Stock as specified in this Section 3
(subject to the other provisions of the Certificate of
Designations).
(b) Priority of
Dividends. So long as any share of Series C Preferred Stock
remains outstanding, no dividend or distribution shall be declared or paid on
the Common Stock or any other shares of Junior Stock (other than dividends
payable solely in shares of Common Stock) or Parity Stock, subject to the
immediately following paragraph in the case of Parity Stock.
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When dividends are not paid (or
declared and a sum sufficient for payment thereof set aside for the benefit of
the holders thereof on the applicable record date) on any Dividend Payment Date
(or, in the case of Parity Stock having dividend payment dates different from
the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period related to such Dividend Payment Date) in full upon Series C Preferred
Stock and any shares of Parity Stock, all dividends declared on Series C
Preferred Stock and all such Parity Stock and payable on such Dividend Payment
Date (or, in the case of Parity Stock having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling within the
Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the
respective amounts of such dividends declared shall bear the same ratio to each
other as all accrued and unpaid dividends per share on the shares of Series C
Preferred Stock (including, if applicable as provided in Section 3(a) above,
dividends on such amount) and all Parity Stock payable on such Dividend Payment
Date (or, in the case of Parity Stock having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling within the
Dividend Period related to such Dividend Payment Date) (subject to their having
been declared by the Board of Directors or a duly authorized committee of the
Board of Directors out of legally available funds and including, in the case of
Parity Stock that bears cumulative dividends, all accrued but unpaid dividends)
bear to each other.
Subject
to the foregoing, and not otherwise, such dividends (payable in cash, securities
or other property) as may be determined by the Board of Directors or any duly
authorized committee of the Board of Directors may be declared and paid on any
securities, including Common Stock and other Junior Stock, from time to time out
of any funds legally available for such payment, and holders of Series C
Preferred Stock shall not be entitled to participate in any such
dividends.
Section 4. Liquidation
Rights.
(a) Voluntary or Involuntary
Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of the Company, whether voluntary or involuntary,
holders of Series C Preferred Stock shall be entitled to receive for each share
of Series C Preferred Stock, out of the assets of the Company or proceeds
thereof (whether capital or surplus) available for distribution to stockholders
of the Company, subject to the rights of any creditors of the Company, before
any distribution of such assets or proceeds is made to or set aside for the
holders of Common Stock and any other stock of the Company ranking junior to
Series C Preferred Stock as to such distribution, payment in full in an amount
equal to the sum of (i) the Liquidation Amount per share and (ii) the amount of
any accrued and unpaid dividends (including, if applicable as provided in
Section 3(a) above, dividends on such amount), whether or not declared, to the
date of payment (such amounts collectively, the “Liquidation
Preference”).
(b) Partial
Payment. If in any distribution described in Section 4(a)
above the assets of the Company or proceeds thereof are not sufficient to pay in
full the amounts payable with respect to all outstanding shares of Series C
Preferred Stock and the corresponding amounts payable with respect of any other
stock of the Company ranking equally with Series C Preferred Stock as to such
distribution, holders of Series C Preferred Stock and the holders of such other
stock shall share ratably in any such distribution in proportion to the full
respective distributions to which they are entitled.
(c) Residual
Distributions. If the Liquidation Preference has been paid in
full to all holders of Series C Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Company ranking equally with
Series C Preferred Stock as to such distribution has been paid in full, the
holders of other stock of the Company shall be entitled to receive all remaining
assets of the Company (or proceeds thereof) according to their respective rights
and preferences.
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(d) Merger, Consolidation and
Sale of Assets Not Liquidation. For purposes of this Section
4, the merger or consolidation of the Company with any other corporation or
other entity, including a merger or consolidation in which the holders of Series
C Preferred Stock receive cash, securities or other property for their shares,
or the sale, lease or exchange (for cash, securities or other property) of all
or substantially all of the assets of the Company, shall not constitute a
liquidation, dissolution or winding up of the Company.
Section 5. Conversion.
(a) Conversion
Rights.
(i) Subject
to and upon compliance with the provisions of this Section 5, a holder of the
Series C Preferred Stock shall have the right, at such holder’s option, at any
time or from time to time prior to the Mandatory Conversion Date, to convert
(the “Conversion”) all or a portion of such shares into the number of fully paid
and non-assessable shares of Common Stock obtained by multiplying the number of
shares of Series C Preferred Stock being converted by the Liquidation Preference
and dividing such product by the Conversion Price (each of the number of shares
and the Conversion Price as such may have been adjusted pursuant to Paragraphs
5(e) through (i) below), by surrendering the Series C Preferred Stock to be
converted in the manner provided in paragraph (b) of this
Section 5. The “Conversion Price” shall be the lesser of (A)
$6.50 (the “Cap,” as may be adjusted in accordance with Sections 5(e) or (f)) or
(B) the tangible common equity per share as of the calendar quarter ending on or
before the conversion date.
(ii) Mandatory and Automatic
Conversion. Subject to the terms and conditions of this
Section 5, all outstanding shares of Series C Preferred Stock shall be
converted automatically into the number of shares of Common Stock into which
such shares of Series C Preferred Stock are convertible pursuant to
subsection 5(a)(i), without any action by the holders of such shares and
whether or not the certificates representing such shares or any other documents
are surrendered to the Company or its transfer agent on the Mandatory Conversion
Date.
(b) Manner of
Conversion.
(i) In
order to exercise the conversion right, the holder of each share of Series C
Preferred Stock to be converted shall surrender to the Company the
certificate(s) representing such share(s), duly endorsed or assigned to the
Company or in blank, accompanied by an executed conversion notice provided by
the Company. Unless the shares of Common Stock issuable on conversion
are to be issued in the same name as the name in which such Series C Preferred
Stock is registered, each share of Series C Preferred Stock surrendered for
conversion shall be accompanied by instruments of transfer, in form satisfactory
to the Company, duly executed by the holder or such holder’s duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Company demonstrating that such taxes
have been paid).
(ii) As
promptly as practicable after the surrender of certificates of Series C
Preferred Stock as aforesaid, the Company shall issue and shall deliver at such
office to such holder, or on such holder’s written order, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such Series C Preferred Stock in accordance with the provisions of
this Section 5 and any fractional interest in respect of a share of Common Stock
arising upon such conversion shall be settled as provided in paragraph (c) of
this Section 5.
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(iii) Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the date on which certificates for the Series C Preferred Stock
have been surrendered and such notice received by the Company as aforesaid, and
the person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby at
such time on such date, and such conversion shall be at the Conversion Price
unless the stock transfer books of the Company shall be closed on that date, in
which event such conversion shall have been deemed to have been effected and
such person or persons shall be deemed to have become the holder or holders of
record at the close of business on the next succeeding day on which such stock
transfer books are open, but such conversion shall be at the Conversion Price in
effect on the date on which such shares shall have been surrendered and such
notice received by the Company.
(c) Fractional
Shares. No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the Series C
Preferred Stock. Instead of any fractional interest in a share of
Common Stock that would otherwise be deliverable upon the conversion of Series C
Preferred Stock, the Company shall pay to the holder of such Series C Preferred
Stock an amount in cash based upon the applicable Conversion
Price. If more than one share of Series C Preferred Stock shall be
surrendered for conversion at one time by a holder of Series C Preferred Stock,
the number of full shares of Common Stock issuable upon conversion thereof shall
be computed on the basis of the aggregate number of shares of Series C Preferred
Stock surrendered.
(d) Transfer Taxes Upon
Conversion. The holder of the Series C Preferred Stock shall
pay any and all issuance and other taxes that may be payable in respect of any
issuance or delivery of Common Stock upon conversion of the Series C Preferred
Stock and any tax that may be payable in respect of any transfer involved in the
issuance and delivery of shares of Common Stock in a name other than that in
which the Series C Preferred Stock so converted shall have been
registered. No issuance or delivery of the Common Stock shall be made
unless and until the person or entity requesting such issuance shall have paid
to the Company the amount of any such tax or shall have established, to the
satisfaction of the Company, that such tax had been paid.
(e) Adjustment for Stock Splits
and Combinations. If the Company shall effect a subdivision of
the outstanding Common Stock, the Cap shall be proportionately
decreased. If the Company shall combine the outstanding shares of
Common Stock, the Cap shall be proportionately increased. Any
adjustment under this paragraph shall become effective at the close of business
on the date the subdivision or combination becomes effective.
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(f) Adjustment for Certain
Dividends and Distributions. If the Company shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in additional
shares of Common Stock, the Cap shall be decreased as of the time of such
issuance or, in the event such a record date shall have been fixed, as of the
close of business on such record date, by multiplying the Cap then in effect by
a fraction,
(i) the
numerator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date, and
(ii) the
denominator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or
distribution;provided, however, if such
record date shall have been fixed and such dividend shall not be fully paid or
if such distribution shall not be fully made on the date fixed therefor, the Cap
shall be recomputed accordingly as of the close of business on such record date,
and thereafter the Cap shall be adjusted pursuant to this subsection (f) as
of the time of actual payment of such dividends or distributions; and provided further,
however, that
no such adjustment shall be made if the holders of the Series C Preferred Stock
simultaneously receive a dividend or other distribution of shares of Common
Stock in a number equal to the number of shares of Common Stock as they would
have received if all outstanding shares of the Series C Preferred stock had been
converted into Common Stock as of the record date for such event.
(g) Adjustments for Other
Dividends and Distributions. If the Company shall make or
issue to holders of Common Stock, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Company other than shares of Common Stock, then,
and in each such event, provision shall be made so that the holders of the
Series C Preferred Stock shall receive upon conversion thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Company that they would have received had such Series C
Preferred Stock been converted into Common Stock on the date of such event and
had they thereafter, during the period from the date of such event retained such
securities receivable by them as aforesaid during such period, provided, however, that no such
adjustment shall be made if the holders of the Series C Preferred Stock
simultaneously receive a dividend or other distribution of such securities in an
amount equal to the amount of such securities as they would have received if all
outstanding shares of the Series C Preferred Stock had been converted into
Common Stock as of the record date for such event.
(h) Adjustment for
Reclassification, Exchange or Substitution. If the Common
Stock shall be changed into the same or a different number of shares of any
class or classes of stock, whether by capital reorganization, reclassification,
or otherwise (other than a subdivision or combination of shares or stock
dividend provided for above, or a reorganization, merger, consolidation, or sale
of assets provided for below), the holders of the Series C Preferred Stock shall
have the right thereafter to convert such shares into the kind and amount of
shares of stock and other securities and property receivable upon such
reorganization, reclassification, or other change, as would be received by
holders of the number of shares of Common Stock into which such shares of the
Series C Preferred Stock might have been converted immediately prior to such
reorganization, reclassification, or change.
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(i) Adjustment for Merger or
Reorganization, etc. In case of any consolidation or merger of the
Company with or into another corporation or the sale of all or substantially all
of the assets of the Company to another corporation, each share of Series C
Preferred Stock shall thereafter be convertible (or shall be converted into a
security which shall be convertible) into the kind and amount of shares of stock
or other securities or property to which a holder of the number of shares of
Common Stock of the Company issuable upon conversion of such share would have
been entitled upon such consolidation, merger or sale; and, in such case,
appropriate adjustment (as determined in good faith by the Board of Directors)
shall be made in the application of the provisions in this Section 5 with
respect to the rights and interest thereafter of the holders of Series C
Preferred Stock, to the end that the provisions set forth in this Section 5
(including provisions with respect to changes in and other adjustments of the
Conversion Price applicable to such series) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other
property thereafter issuable upon the conversion of the Series C Preferred
Stock.
(j) Certificate as to
Adjustments. Upon the occurrence of each adjustment or
readjustment of the Cap, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof. The
Company shall, upon the written request at any time of any holder of Series C
Preferred Stock, furnish or cause to be furnished to such holder a certificate
setting forth (i) such adjustments and readjustments, (ii) the Cap applicable to
such series then in effect, and (iii) the number of shares of Common Stock and
the amount, if any, of other property that then would be received upon the
conversion.
(k) Notice of Record
Date. If:
(i) the
Company shall declare a dividend (or any other distribution) on its Common Stock
payable in Common Stock or other securities of the Company;
(ii) the
Company shall subdivide or combine its outstanding shares of Common Stock;
or
(iii) there
shall be any reclassification of the Common Stock (other than a subdivision or
combination of its outstanding shares of Common Stock or a stock dividend or
stock distribution thereon), consolidation or merger of the Company into or with
another Company, sale of all or substantially all of the assets of the Company,
or involuntary or voluntary dissolution, liquidation or winding up of the
Company; then the Company shall cause to be filed at its principal office or at
the office of the transfer agent of the Series C Preferred Stock, and shall
cause to be mailed to the holders of Series C Preferred Stock at their last
addresses as shown on the records of the Company or such transfer agent, at
least ten days prior to the date specified in (A) below or twenty days before
the date specified in (B) below, a notice stating:
(A) the
record date of such dividend, distribution, subdivision or combination, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, subdivision or combination
are to be determined, or
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(B) the
date on which such reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, dissolution
or winding up.
(l) Multiple
Adjustments. The Cap will be adjusted for each action or
transaction that would require adjustment of the Cap pursuant this Section
5.
(m) Reservation of Shares of
Common Stock. The Company shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock for the purpose of effecting conversion of
the Series C Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series C Preferred
Stock not theretofore converted. Before taking any action that would
cause an adjustment in the Cap such that Common Stock issuable upon the
conversion of Series C Preferred Stock would be issued below par value of the
Common Stock, the Company shall take any corporate action that may, in the
opinion of its counsel, be reasonably necessary in order that the Company may
validly and legally issue fully-paid and nonassessable shares of Common Stock at
such adjusted Conversion Price.
Section
6. Voting
Rights. The holders of Series C Preferred Stock shall not have
any voting rights except as required by law.
Section
7. Record
Holders. To the fullest extent permitted by applicable law,
the Company and the transfer agent for Series C Preferred Stock may deem and
treat the record holder of any share of Series C Preferred Stock as the true and
lawful owner thereof for all purposes, and neither the Company nor such transfer
agent shall be affected by any notice to the contrary.
Section
8. Notices. All
notices or communications in respect of Series C Preferred Stock shall be
sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in
this Certificate of Designations, in the Charter or Bylaws or by applicable
law. Notwithstanding the foregoing, if shares of Series C Preferred
Stock are issued in book-entry form through The Depository Trust Company or any
similar facility, such notices may be given to the holders of Series C Preferred
Stock in any manner permitted by such facility.
Section
9. Replacement
Certificates. The Company shall replace any mutilated
certificate at the holder’s expense upon surrender of that certificate to the
Company. The Company shall replace certificates that become
destroyed, stolen or lost at the holder’s expense upon delivery to the Company
of reasonably satisfactory evidence that the certificate has been destroyed,
stolen or lost, together with any indemnity that may be reasonably required by
the Company.
Section 10. Other
Rights. The shares of Series C Preferred Stock shall not have
any rights, preferences, privileges or voting powers or relative, participating,
optional or other special rights, or qualifications, limitations or restrictions
thereof, other than as set forth herein or in the Charter or as provided by
applicable law.
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