EX-4.4 10 exhibit44.htm EX-4.4 exhibit44
 
 
Exhibit 4.4
DESCRIPTION OF USCB FINANCIAL HOLDINGS, INC.’S
 
SECURITIES
As of December 31, 2021, USCB
 
Financial Holdings, Inc. (the “Company”)
 
has one class of securities registered
 
under
Section 12
 
of the
 
Securities Exchange
 
Act of
 
1934, as
 
amended, namely
 
its Class
 
A common
 
stock, $1.00
 
par value per
 
share
(“Class A Common
 
Stock”). The following
 
summary of the Class
 
A Common Stock
 
is based on
 
and qualified by
 
the Company’s
Articles
 
of Incorporation
 
(the “Articles
 
of Incorporation”),
 
the Company’s
 
Amended and
 
Restated Bylaws
 
(the “Bylaws”)
 
and
the
 
Side Letter
 
Agreement
 
(the
 
“Side
 
Letter
 
Agreement”)
 
by
 
and
 
between
 
the
 
Company
 
and the
 
Large Investors (as
 
defined
herein). For a complete description
 
of the terms and provisions of
 
the Company’s
 
equity securities, including its
 
common stock,
refer to
 
the Articles
 
of Incorporation,
 
the Bylaws
 
and the
 
Side Letter
 
Agreement, all
 
of which are filed as exhibits to
 
this Annual
Report on Form 10-K.
General
The Articles of
 
Incorporation authorize a
 
total of
 
68,600,000 shares of capital
 
stock, $1.00 par
 
value per
 
share, consisting of (a)
53,000,000 shares of
 
common stock, 45,000,000
 
of which
 
are designated Class
 
A Common Stock
 
and 8,000,000
 
of which are
designated Class B Non-Voting Common Stock,
 
par value $1.00
 
per share (“Class B
 
Common Stock” and together with the
 
Class
A Common Stock, the “Common Stock”), and (b) 15,600,000
 
shares of preferred stock, $1.00 par value per share.
Voting Rights
The Class A Common Stock has voting rights, and Class B Common Stock does not have voting rights
 
except in limited
circumstances. Holders
 
of Class
 
A Common
 
Stock are
 
entitled to
 
one vote
 
per share
 
on all
 
matters on
 
which the
 
holders are
entitled to vote, except in the case of amendments to the Articles of Incorporation where such amendment relates solely to
 
Class
B
 
Common
 
Stock
 
or
 
any
 
other
 
series
 
of
 
the
 
Company’s
 
preferred
 
stock.
 
The
 
Company
 
does
 
not
 
have
 
any cumulative
votes
 
in
 
the
 
election
 
of
 
directors.
 
Under
 
the
 
Bylaws,
 
unless
 
otherwise
 
provided
 
by
 
law
 
or
 
the
 
Articles
 
of Incorporation,
the
 
holders of
 
a majority
 
of shares
 
issued, outstanding,
 
and entitled
 
to vote,
 
present in
 
person or
 
by proxy, will
 
constitute
 
a
quorum
 
to
 
transact
 
business,
 
including
 
the
 
election
 
of
 
directors,
 
except
 
that
 
when
 
a specified
 
item
 
of business is required
to be voted on by one or
 
more designated classes or series
 
of capital stock, a majority of the shares of each such
 
class or
 
series
will
 
constitute a
 
quorum. Once
 
a quorum
 
is present,
 
except as
 
otherwise provided
 
by law,
 
the Articles of Incorporation,
 
the
Bylaws or
 
in respect of the
 
election of directors,
 
all matters to be
 
voted on by the
 
Company’s shareholders must
 
be approved
by a majority of shares constituting a quorum, and where a separate vote by class or series is required, a majority of the
 
votes
represented
 
by the shares of the shareholders
 
of such
 
class or series present in person
 
or by proxy and entitled to
 
vote shall be
the act of such
 
class or series. The affirmative
 
vote of the holders representing
 
66 2/3% of the then outstanding shares
 
of Class
A Common Stock is required to
 
amend, alter or repeal, or adopt any provision as part of the
 
Articles of Incorporation that is
inconsistent with the purpose and intent
 
of certain designated provisions of the Articles
 
of
 
Incorporation
 
and
 
the
 
Bylaws
including,
 
among
 
others,
 
perpetual
 
term,
 
management
 
of
 
the
 
Company, indemnification,
 
transfer restrictions, board powers
and number
 
of directors.
The holders of Class B Common Stock
 
have
 
limited voting rights. In
 
addition to any voting rights that may
 
be required under
Florida
 
law,
 
the
 
consent of
 
holders
 
of Class
 
B
 
Common
 
Stock
 
representing a
 
majority
 
of the
 
shares of
 
Class
 
B Common
Stock present in person
 
or by proxy and entitled
 
to vote, voting as a separate
 
class, is required to (a)
 
amend the Articles of
Incorporation in
 
a manner
 
that would significantly and
 
adversely affect
 
the rights of the
 
holders of the Class
 
B Common
 
Stock in
a manner
 
that
 
is
 
different
 
from
 
the effect
 
of such
 
amendment
 
on the
 
Class
 
A
 
Common
 
Stock or
 
(b) liquidate, dissolve or wind-
up the Company.
Dividends
Holders of Common Stock are
 
entitled to receive such dividends
 
as may from time to time be declared by the Company’s Board
of Directors (the
 
“Board”) out of funds
 
legally available
 
for such purposes. The
 
Company can
 
pay dividends on its Common Stock
only if it has paid or provided for
 
the payment of all dividends, if any, to which
 
holders of its then outstanding preferred stock, are
entitled. The Company’s ability to
 
pay dividends is also subject to applicable
 
federal and state
 
banking laws.
Liquidation
In the event of
 
the liquidation, dissolution
 
or winding-up of the Company,
 
holders of both Class A Common
 
Stock and Class B
Common Stock are entitled to
 
share equally and ratably in our
 
assets, if any,
 
remaining after the payment of all
 
the Company’s
debts
 
and liabilities, and the
 
satisfaction of the liquidation
 
preferences of the holders
 
of any then outstanding classes
 
or series of
preferred stock.
 
 
Preemptive Rights,
 
Redemption or
 
Other Rights
Pursuant to the Articles
 
of Incorporation and the Bylaws, holders of Common
 
Stock do not have preemptive rights
 
or other
rights to purchase,
 
subscribe for or take
 
any part of any shares
 
of the Company’s
 
capital stock. The Large
 
Investors (as defined
herein), however, have certain contractual
 
preemptive rights pursuant to the Side Letter Agreement. In addition, the
 
Company
does
 
not
 
have
 
any
 
sinking
 
fund
 
or
 
redemption
 
provisions
 
in
 
the
 
Articles
 
of
 
Incorporation
 
or
 
the
 
Bylaws applicable to its
Common Stock.
Conversion
The
 
Class
 
A
 
Common
 
Stock
 
does
 
not
 
have
 
any
 
conversion
 
rights.
 
Pursuant
 
to
 
the
 
Articles
 
of
 
Incorporation,
 
the
Company’s shares of Class
 
B Common
 
Stock may only be transferred (a) to an affiliate
 
of
 
the holder of Class B Common
 
Stock,
(b) to the Company,
 
(c) pursuant to a widespread public
 
distribution of the Common Stock
 
(including a transfer to an underwriter
 
for
the purpose of conducting a widespread public distribution or pursuant to Rule 144 under the Securities Act),
(d) if no transferee or group of associated transferees would receive 2% or more of any class of capital stock entitled to vote
generally in the election of
 
directors of the Company or (e) to
 
a transferee that would
 
control more than 50% of the
 
capital stock
entitled
 
to
 
vote
 
generally
 
in
 
the
 
election
 
of
 
directors
 
of
 
the
 
Company
 
without
 
any
 
transfer
 
from
 
the
 
transferor.
Immediately following
 
a transfer
 
of the
 
type described
 
in (c),
 
(d) or
 
(e) in
 
the preceding
 
sentence, each
 
share of
 
Class B
Common Stock so transferred is
 
automatically
 
converted into one share of Class
 
A Common
 
Stock (subject to adjustment as
provided in the Articles of Incorporation). The Company must at
 
all times reserve and keep available out of its authorized and
unissued
 
shares of
 
Class A
 
Common Stock
 
such number
 
of shares
 
of Class
 
A Common Stock
 
that
 
may be
 
issuable upon
conversion of all of the outstanding
 
shares of Class
 
B Common Stock.
Stockholder
 
Meetings
Except as otherwise provided by law,
 
the Board, or any one or more
 
shareholders owning, in the aggregate,
 
not less than
ten percent of the issued and
 
outstanding Class A Common Stock,
 
may call a special meeting of
 
shareholders
 
at any time for
any purpose not inconsistent with
 
the Articles
 
of Incorporation or the Bylaws.
Director Removal
Subject to the rights of holders of any class
 
or series of preferred stock with
 
respect to the election of directors, a director may
be removed from office by the affirmative
 
vote of holders of shares of capital stock issued and outstanding and entitled
 
to vote in
an election of directors representing
 
at least a majority of the
 
votes entitled to be cast thereon,
 
and then,
 
only for cause.
Anti-takeover Effects
Certain provisions of the Articles
 
of Incorporation, the Bylaws,
 
Florida and U.S. banking laws to
 
which the Company is subject
may have anti-takeover effects
 
and may delay, defer, or prevent a tender
 
offer or takeover attempt that
 
a shareholder might consider
to be
 
in such
 
shareholder’s best
 
interest, including
 
those attempts
 
that might
 
result in a
 
premium over the market
 
price
 
for the
shares held by
 
shareholders, and may make
 
removal of management
 
more difficult.
 
The Articles
 
of Incorporation and Bylaws
include provisions that:
•
 
empower the Board, without shareholder approval, to
 
issue preferred stock, the terms
 
of which, including voting
power, are to
 
be set by the
 
Board;
•
 
provide that directors
 
may be removed from office
 
only for cause and only upon
 
a majority vote of the shares
of capital stock entitled
 
to vote in an election
 
of directors;
•
 
prohibit holders of Class
 
A Common Stock from
 
taking action by written consent in
 
lieu of a
 
shareholder meeting;
•
 
require holders of at least 10%
 
of the Company’s Class
 
A Common Stock in order
 
to call a special
 
meeting;
•
 
do not provide for cumulative voting in elections of
 
Company
 
directors;
•
 
provide that the Board has the
 
authority to amend the Bylaws;
•
 
require shareholders that
 
wish to bring business
 
before annual or
 
special meetings of
 
shareholders, or to
 
nominate
candidates for
 
election as directors
 
at an annual
 
meeting of shareholders,
 
to provide timely
 
notice of their
 
intent in
writing and satisfy disclosure requirements;
 
and
•
 
enable the Board
 
to increase, between
 
annual
 
meetings, the number
 
of persons serving
 
as directors
 
and to fill
 
the
vacancies created as a result of the increase
 
until the next meeting of shareholders by a
 
majority vote of the directors
present at a meeting of directors.
Additionally,
 
the Articles of Incorporation
 
prohibit any direct or
 
indirect transfer of stock
 
or options to acquire
 
stock to any
person
 
who,
 
as a
 
result
 
of the
 
transfer,
 
would own
 
4.95% or
 
more
 
of the
 
Company’s
 
capital
 
stock, as
 
long as
 
the
 
 
Company continues to have “deferred
 
tax assets,” subject to limited
 
exceptions as provided in the Articles
 
of Incorporation. Also,
certain provisions of
 
Florida law may delay,
 
discourage,
 
or prevent an attempted acquisition
 
or change
 
in control. Furthermore,
banking laws impose notice, approval, and ongoing regulatory requirements on any shareholder or other party that seeks to
acquire direct or indirect “control”
 
of a bank holding company,
 
which includes the Change in Bank
 
Control Act and the Bank
Holding Company Act.
Preferred Stock
The Board is authorized, without
 
shareholder approval
 
and subject to any limitations prescribed
 
by law, the
 
Articles of
Incorporation and the Bylaws,
 
at any time or from
 
time to time to (a) provide for the
 
issuance of the shares of preferred stock in
one or more classes
 
or series, (b) determine the
 
designation for any such classes or series of preferred
 
stock, (c) establish the
number
 
of
 
shares
 
to
 
be
 
included
 
in
 
any
 
such
 
class
 
or
 
series,
 
and
 
(d)
 
determine
 
the
 
terms,
 
powers,
 
preferences,
qualifications, limitations, restrictions
 
and relative, participating,
 
optional or other
 
special rights of the
 
shares of such
 
class or
series of preferred stock, which include rights such as those with respect to dividends, liquidation preference, conversion,
redemption, and/or voting.
Any issuance of preferred stock with voting rights
 
or which is convertible into voting
 
shares could adversely affect the voting
power of the holders of Class
 
A Common Stock.
 
Any of aforementioned actions could have
 
an anti-takeover
 
effect.
Side
 
Letter
 
Agreement
Pursuant to
 
the Side
 
Letter Agreement
 
between the
 
Company,
 
Priam Capital
 
Fund II,
 
LP (“Priam”),
 
Patriot Financial
Partners II,
 
L.P.
 
(“Patriot Financial”) and Patriot Financial
 
Partners Parallel
 
II, L.P.
 
(“Patriot Financial
 
Partners,” together with
Patriot Financial and Priam, the “Large
 
Investors”), the Company is required
 
to maintain its Board at no less than five
 
nor more
than
 
seven directors,
 
and to cause
 
one person nominated
 
by
 
each Large Investor
 
to be elected
 
or appointed to
 
the Board,
including filling
 
any vacancy
 
(the “Board
 
Representative”), subject to satisfaction
 
of all
 
legal and
 
governance requirements
regarding such Board Representative’s
 
service as a director.
 
Such Board Representative rights last as
 
long as each Large
Investor beneficially owns shares of the Common
 
Stock representing
 
50% or more of the common stock of the
 
Bank (as defined
below) purchased by the
 
Large Investor in the recapitalization of U.S. Century
 
Bank, the Company’s wholly
 
owned Florida
state-chartered bank subsidiary (the
 
“Bank”),
 
in 2015 (the “2015 Recapitalization”),
 
as adjusted from time to time as a
 
result
 
of
changes in capitalization. Pursuant
 
to the Side Letter Agreement,
 
the Large Investors
 
have the power
 
to
 
designate
 
a
 
Board
observer
 
to
 
attend
 
meetings
 
in
 
a
 
nonvoting
 
capacity
 
in
 
the
 
event
 
any
 
applicable
 
Board Representative is
 
unable to
 
attend
such
 
meetings or
 
if the
 
Large Investor
 
does not
 
have a
 
Board Representative
 
on the Board on the date of
 
any meeting.
The Side Letter Agreement provides
 
each Large Investor with matching stock rights
 
for
 
so long as each Large Investor
beneficially owns shares of Common Stock
 
representing 50% or more of the common
 
stock of the
 
Bank purchased by the Large
Investor
 
in the 2015
 
Recapitalization,
 
as
 
adjusted from time
 
to time as
 
a result of
 
changes in capitalization.
 
The matching
stock rights
 
permit each Large Investor to purchase new equity
 
securities
 
offered by the Company for the
 
same price
 
and on
the same
 
terms
 
as
 
such securities
 
are
 
proposed to
 
be offered
 
to
 
others,
 
subject
 
to specified
 
exceptions, procedural
requirements
 
and compliance with applicable
 
bank regulatory ownership requirements
 
as further
 
described in the Side Letter
Agreement. The Side Letter Agreement
 
also provides customary information
 
rights to the
 
Large Investors.
Listing
Our Class A common stock
 
is listed on The Nasdaq
 
Global
 
Market under ticker symbol
 
“USCB”.
Transfer Agent
 
and Registrar
The transfer agent and registrar
 
for our Common Stock is Computershare Trust Company,
 
N.A.