Document:

Exhibit 4.2

 

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

 

As of September 30, 2020, Sterling Bancorp, Inc. had one class of common stock registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

The following description of our common stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our second amended and restated articles of incorporation (the “Articles”) and our amended and restated bylaws (the “Bylaws”), each of which is incorporated herein by reference as an exhibit to the Annual Report on Form 10-K filed with the Securities and Exchange Commission, of which this Exhibit 4.2 is a part. We encourage you to read our Certificate of Incorporation, our Bylaws and the applicable provisions of the Michigan Business Corporation Act (as amended, the “MBCA”) for additional information.

 

Authorized Capital Stock

 

Our authorized capital stock currently consists of 500,000,000 shares of common stock, no par value per share, and 10,000,000 shares of preferred stock. As of September 30, 2020, 49,977,209 shares of our common stock were issued and outstanding, and there were no shares of preferred stock outstanding. There are no redemption or sinking fund provisions applicable to our common stock. All outstanding shares of our common stock are fully paid and non-assessable.

 

Dividend Rights

 

Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of our common stock are entitled to receive dividends, if any, as may be declared from time to time by the Board of Directors (the “Board”) out of legally available funds.

 

Voting Rights

 

Each holder of our common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders, including the election of directors. Our Articles and Bylaws do not provide for cumulative voting rights. As a result, the holders of a majority of the shares entitled to vote in any election of directors are able to elect all of the directors standing for election, if they should so choose.

 

Liquidation Rights

 

In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in the net assets legally available for distribution to shareholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.

 

Other Rights and Preferences

 

Holders of our common stock have no preemptive, conversion or subscription rights. The rights, preferences and privileges of our common stock are subject to, and may be adversely affected by, the rights, preferences and privileges of any series of preferred stock that we may issue in the future.

 

 

Listing

 

Our common stock has been approved for listing on the NASDAQ Capital Market under the symbol “SBT.”

 

Certain Provisions of Our Articles and Bylaws and Michigan Law

 

Our Articles and Bylaws contain certain provisions that could have the effect of delaying, deterring or preventing another party from acquiring control of us, and therefore could adversely affect the market price of our common stock. These provisions and certain provisions of the MBCA, which are summarized below, may also discourage coercive takeover practices and inadequate takeover bids, and are designed, in part, to encourage persons seeking to acquire control of us to negotiate first with the Board.

 

Second Amended and Restated Articles of Incorporation and Amended and Restated Bylaws

 

Our Articles and Bylaws contain provisions that:

 

·                  permit the Board to issue up to 10 million shares of preferred stock, with any rights, preferences and privileges as they may determine (including the right to approve an acquisition or other change in control);

 

·                  provide that the authorized number of directors may be fixed only by the Board in accordance with our Bylaws;

 

·                  do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares entitled to vote in any election of directors to elect all of the directors standing for election);

 

·                  divide our Board into three staggered classes;

 

·                  provide that all vacancies and newly created directorships may be filled by the affirmative vote of at least 80% of directors then in office, even if less than a quorum;

 

·                  prohibit removal of directors without cause;

 

·                  prohibit shareholders from calling special meetings of shareholders;

 

·                  requires unanimous consent for shareholders to take action by written consent without approval of the action by our Board;

 

·                  provide that shareholders seeking to present proposals before a meeting of shareholders or to nominate candidates for election as directors at a meeting of shareholders must provide advance notice in writing and also comply with specified requirements related to the form and content of a shareholder’s notice;

 

·                  require at least 80% supermajority shareholder approval to alter, amend or repeal certain provisions of our Articles; and

 

·                  require at least 80% supermajority shareholder approval in order for shareholders to adopt, amend or repeal our Bylaws.

 

 

The provisions of our Articles and Bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they might also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions might also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that our shareholders might otherwise deem to be in their best interests.

 

Michigan Business Corporation Act

 

We may also opt-in to the provisions of Chapter 7A of the MBCA. In general, subject to certain exceptions, Chapter 7A of the MBCA prohibits a Michigan corporation from engaging in a “business combination” with an “interested shareholder” for a period of five years following the date that such shareholder became an interested shareholder, unless: (i) prior to such date, the board of directors approved the business combination; or (ii) on or subsequent to such date, the business combination is approved by at least 90% of the votes of each class of the corporation’s stock entitled to vote and by at least two-thirds of such voting stock not held by the interested shareholder or such shareholder’s affiliates. The MBCA defines a “business combination” to include certain mergers, consolidations, dispositions of assets or shares and recapitalizations. An “interested shareholder” is defined by the MBCA to include a beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the corporation. While our Board to date has not elected to opt-in to these provisions, any future decision to do so could have an anti-takeover effect.Exhibit 10.8

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (“Agreement”) is executed as of the 24th  day of  July , 2008, by Sterling Bancorp, Inc., a Michigan corporation (the “Company”), and Gary S. Judd, an individual (the “Indemnitee”).

 

WHEREAS, pursuant to a Stock Purchase Agreement entered into as of April 3, 2008, by and between the Company and Indemnitee, Indemnitee has agreed to purchase a certain number of the Company’s Voting Common Shares, no par value per share, on certain terms and conditions set forth therein (the “Purchase”); and

 

WHEREAS, Indemnitee is willing to consummate the Purchase and to serve as an officer, director and employee of the Company, only in the event that the Company executes this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set forth herein, the Company agrees in favor of the Indemnitee as follows:

 

1.                                      Indemnification.

 

(a)                                 The Company will indemnify and hold harmless the Indemnitee to the fullest extent authorized by Michigan and federal law against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with the Indemnitee serving as an employee, officer and director of the Company and such indemnification will inure to the benefit of his heirs, executors and administrators; provided, however, that, except as provided in subsection (b) of this Section 1, the Company will indemnify the Indemnitee seeking indemnification in connection with a proceeding (or part thereof) initiated by the Indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Company or was within the scope of Indemnitee’s employment with the Company. The right to indemnification conferred in this Section 1 will be a contract right and will include the right to be paid by the Company the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if Michigan or federal law require, the payment of such expenses incurred by the Indemnitee in his capacity as an employee, officer or director (and not in any other capacity in which service was or is rendered by such person while an employee, officer or director, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding will be made only upon delivery to the Company of an undertaking, by or on behalf of such employee, officer or director, to repay all amounts so advanced if it is ultimately determined that such employee, officer or director is not entitled to be indemnified under this Section 1 or otherwise.

 

 

(b)                                 If a claim under subsection (a) of this Section 1 is not paid in full by the Company within thirty (30) days after a written claim has been received by the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim and, if successful in whole or in part, the Indemnitee will also be entitled to be paid the expense of prosecuting such claim. It will be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, is required, has been tendered to the Company) that the Indemnitee has not met the standards of conduct which make it permissible under Michigan and/or federal law for the Company to indemnify the Indemnitee for the amount claimed, but the burden of proving such defense will be on the Company. Neither the failure of the Company (including its Board, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the Indemnitee is proper in the circumstances because he has met the applicable standard of conduct set forth in Michigan and/or federal law, nor an actual determination by the Company (including its Board, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, will be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct.

 

(c)                                  The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section 1 will not apply to any action, suit or proceeding for which indemnification or payment of expenses is not consistent with or permitted by laws and regulations applicable to federally insured depository institutions, including but not limited to, regulations of the Office of Thrift Supervision and the Federal Deposit Insurance Corporation.

 

(d)                                 The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section 1 will not be exclusive of any other right which the Indemnitee may have or hereafter acquire under any statute, provision of the Company’s Certificate of Incorporation, as hereinafter amended or further restated, the Company’s Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

 

(e)                                  If this Agreement or any portion hereof is invalidated on any ground by any court of competent jurisdiction, then the Company will nevertheless indemnify the Indemnitee as to expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including a grand jury proceeding and an action by the Company, to the fullest extent permitted by any applicable portion of this Agreement that has not been invalidated or by any other applicable law.

 

(f)                                   The foregoing provisions of this Section 1 shall continue to apply to the Indemnitee after he has ceased to be an employee, officer and/or director of the Company or has ceased to serve at the Company’s request as set forth above.

 

2

 

2.                                      Miscellaneous.

 

(a)                                 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Michigan, without regard to principles of conflicts of law.

 

(b)                                 This Agreement may not be assigned by either party hereto without the consent of the other party hereto. This Agreement shall be binding upon and shall inure to the benefit of the Company and the Indemnitee and their respective heirs, executors, legal representatives, successors and assigns.

 

(c)                                  This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same agreement.

 

(d)                                 Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is finally determined by a court of competent jurisdiction to be unenforceable or invalid under applicable law, such provision will be effective only to the extent of its enforceability or validity, without affecting the enforceability or validity of the remainder of this Agreement, and the parties agree that such court shall have jurisdiction to reform this Agreement to the maximum extent permitted by law, and the parties agree to abide by the court’s determination. In the event that any such provision of this Agreement cannot be reformed, such provision will be deemed severed from this Agreement, but every other provision of this Agreement shall remain in full force and effect.

 

(e)                                  This Agreement may only be amended in a writing signed by the Company and the Indemnitee.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
 
    	
STERLING   BANCORP, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Tom Lopp
    
	
 
    	
Name:
    	
Tom Lopp
    
	
 
    	
Title:
    	
V.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Gary S. Judd
    
	
 
    	
Gary S. Judd
    

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00315-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00315-of-00352.parquet"}]]