Document:

by-ex42_8.htm

Exhibit 4.2

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12

OF THE SECURITIES EXCHANGE ACT OF 1934

 

Our common stock is the only class of our securities that is 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 Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and our Amended and Restated Bylaws (the “Bylaws”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.2 is a part.

General

Our authorized common stock consists of 150,000,000 shares, $0.01 par value per share. As of December 31, 2020, there were 38,736,540 shares of our common stock issued and 38,618,054 shares of our common stock outstanding. The authorized but unissued shares of our common stock will be available for future issuance without stockholder approval, unless otherwise required by applicable law or the rules of any applicable securities exchange. All of our issued and outstanding shares of common stock are validly issued, fully paid and non-assessable.

Subject to the rights and preferences granted to holders of our preferred stock then outstanding, and except with respect to voting rights, conversion rights and certain distributions of our capital stock, holders of our common stock rank equally with respect to distributions and have identical rights, preferences, privileges and restrictions, including the right to attend meetings and receive any information distributed by us with respect to such meetings.

Dividends. Holders of our common stock are equally entitled to receive ratably such dividends as may be declared from time to time by our board of directors out of legally available funds. In no event will any stock dividends or stock splits or combinations of stock be declared or made on common stock unless the shares of common stock at the time outstanding are treated equally and identically, provided that, in the event of a dividend of common stock, shares of common stock shall only be entitled to receive shares of common stock. The ability of our board of directors to declare and pay dividends on our common stock is subject to the laws of the state of Delaware, applicable federal and state banking laws and regulations, and the terms of any senior securities (including preferred stock) we may then have outstanding. Our principal source of income is dividends that are declared and paid by Byline Bank on its capital stock. Therefore, our ability to pay dividends is dependent upon the receipt of dividends from Byline Bank. Our Series B preferred stock ranks senior to our common stock as to dividends and distributions upon the liquidation, dissolution or winding up of Byline.

Voting rights. Each holder of our common stock is entitled to one vote for each share of record held on all matters submitted to a vote of stockholders, except as otherwise required by law and subject to the rights and preferences of the holders of any outstanding shares of our preferred stock. Holders of our common stock are not entitled to cumulative voting in the election of directors. Directors are elected by a plurality of the votes cast.

Liquidation rights. In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in all of our assets remaining after payment of liabilities, including, but not limited to, the liquidation preference of any then outstanding preferred stock. Because we are a bank holding company, our rights and the rights of our creditors and stockholders to receive the assets of any subsidiary upon liquidation or recapitalization may be subject to prior claims of our subsidiary’s creditors, except to the extent that we may be a creditor with recognized claims against our 

			
	
 
	
 
	
 

 

Exhibit 4.2

subsidiary. Our Series B preferred stock ranks senior to our common stock as to dividends and distributions upon the liquidation, dissolution or winding up of Byline.

Preemptive and other rights. Holders of our common stock are not entitled to any preemptive, subscription or redemption rights, and no sinking fund will be applicable to our common stock.

Authorized but Unissued Capital Stock

The Delaware General Corporation Law (the “DGCL”) does not generally require stockholder approval for the issuance of authorized shares. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions. However, the listing requirements of the NYSE, which would apply so long as the common stock remains listed on the NYSE, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of common stock.

One of the effects of the existence of unissued and unreserved common stock or preferred stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive our stockholders of opportunities they may believe are in their best interests or in which they may receive a premium for their common stock over the market price of the common stock.

Anti-Takeover Provisions in our Certificate of Incorporation and Bylaws

Business Combination Statute. We have elected to opt out of Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, subject to certain exceptions.

Federal banking law. The ability of a third party to acquire our stock is also limited under applicable U.S. banking laws, including regulatory approval requirements. The BHC Act requires any “bank holding company” to obtain the approval of the Federal Reserve before acquiring, directly or indirectly, more than 5% of our outstanding common stock. Any “company” (as defined in the BHC Act) other than a bank holding company is required to obtain the approval of the Federal Reserve before acquiring “control” of us. “Control” generally means (i) the ownership or control of 25% or more of a class of voting securities, (ii) the ability to elect a majority of the directors or (iii) the ability otherwise to exercise a controlling influence over management and policies. A person, other than an individual or a qualified family partnership, that controls us for purposes of the BHC Act is subject to regulation and supervision as a bank holding company under the BHC Act. In addition, under the Change in Bank Control Act of 1978, as amended, and the Federal Reserve’s regulations thereunder, any person, either individually or acting through or in concert with one or more persons, is required to provide notice to the Federal Reserve prior to acquiring, directly or indirectly, 10% or more of our outstanding common stock (or any other class of our voting securities).

Requirements for advance notification of stockholder nominations and proposals. Our Bylaws establish advance notice procedures with respect to stockholder proposals and nomination of candidates for election as directors. These procedures provide that notice of such stockholder proposal must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain certain information required to be provided by our Bylaws.

			
	
 
	
 
	
 

 

Exhibit 4.2

Limits on written consents. Our Certificate of Incorporation provides that any action to be taken by the stockholders that the stockholders are required or permitted to take must be effected at a duly called annual or special meeting of stockholders. Our stockholders are not permitted to take action by written consent.

Limits on special meetings. Subject to the rights of the holders of any series of preferred stock, special meetings of the stockholders may be called only by (i) our board of directors, (ii) the Chairperson of the board of directors, (iii) our Chief Executive Officer, (iv) our President or (v) our Executive Vice President.

Amending our Certificate of Incorporation and Bylaws

Our Certificate of Incorporation may be amended or altered in any manner provided by the DGCL. Our Bylaws may be adopted, amended, altered or repealed by stockholders only upon the affirmative vote of holders of a majority of the shares of our common stock present in person or represented by proxy at the meeting and entitled to vote thereon. Additionally, our Certificate of Incorporation provides that our Bylaws may be amended, altered or repealed by our board of directors by a majority vote.

Sole and Exclusive Forum

Our Bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our Certificate of Incorporation or our Bylaws or (iv) any action asserting a claim that is governed by the internal affairs doctrine. Any person purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to this provision of our Bylaws. This choice of forum provision may have the effect of discouraging lawsuits against us and our directors, officers, employees and agents. However, the exclusive forum clause described above shall not apply to suits brought to enforce a duty or liability created by federal law, including the Exchange Act and the Securities Act, for which the federal courts have exclusive jurisdiction. To the extent the exclusive forum provision restricts the courts in which our stockholders may bring claims arising under the Securities Act, there is uncertainty as to whether a court would enforce such provision.  Our stockholders will not be deemed to have waived compliance with the federal securities laws and the rules and regulations thereunder.

Indemnification and Limitation of Liability

Our Bylaws provide generally that we will indemnify and hold harmless, to the full extent permitted by law, our directors, officers, employees and agents, as well as other persons who have served as our directors, officers, employees or agents and other persons who serve or have served at our request at another corporation, limited liability company, public limited company, partnership, joint venture, trust, employee benefit plan, fund or other enterprise in connection with any actual or threatened action, suit or proceeding, subject to limited exceptions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Finally, our ability to provide indemnification to our directors and officers is limited by federal banking laws and regulations.

			
	
 
	
 
	
 

 

Exhibit 4.2

Our Certificate of Incorporation limits, to the full extent permitted by law, the personal liability of our directors in actions brought on our behalf or on behalf of our stockholders for monetary damages as a result of a director’s breach of fiduciary duty while acting in a capacity as a director. Our Certificate of Incorporation does not eliminate or limit our right or the right of our stockholders to seek injunctive or other equitable relief not involving monetary damages. 

Listing

Our common stock is listed on the NYSE under the symbol “BY”.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.by-ex1010_86.htm

EXHIBIT 10.10

Byline Bancorp, INC.
2017 OMNIBUS INCENTIVE COMPENSATION PLAN

RESTRICTED SHARE AWARD AGREEMENT
(PERFORMANCE-BASED VESTING)

This Restricted Share Award Agreement (this “Award Agreement”) evidences a performance-based award of restricted shares (the “Restricted Shares” or “Shares”) by Byline Bancorp, Inc., a Delaware corporation (“Byline”), under the Byline Bancorp, Inc. 2017 Omnibus Incentive Compensation Plan (as amended, supplemented or modified, from time to time, the “Plan”).  Capitalized terms used but not defined in this Award Agreement have the meanings given to them in the Plan.

	
Name of Grantee:
	
_______________ (the “Grantee”).

	
Grant Date:
	
_______________ (the “Grant Date”).

	
Number of Restricted Shares:
	
_______________. 1 

	
Target Number of Restricted Shares: 
	
_______________ (the “Target Number of Shares”).  

	
Earning Restricted Shares: 
	
The actual number of Shares, if any, which are earned under this Award (the “Earned Shares”) shall be determined by the Committee based upon the achievement of the Performance Goals during the Performance Period described below. 

The “Performance Goals” and “Performance Period” established by the Committee in connection with this Award are: 

•The Performance Period under this agreement will start on January 1, 2020, and will end on December 31, 2022.

•The number of shares which may be earned under the award is dependent upon Byline’s return on average assets over the three-year period ending December 31, 2022, measured against a peer group consisting of publicly-traded bank holding companies ranging in asset size from 50% to 200% of Byline’s total assets.  

•Under the award, 25% of the shares will be earned at threshold performance, 100% will be earned at target and 50th percentile performance, and up to 150% of the shares with above target and 75th percentile performance.  

 

 

	
Vesting Date:
	
Any earned shares will vest on the third anniversary of the grant date.

Earned Shares will only vest if the Grantee is, and has been, continuously employed by Byline from the Grant Date through the applicable Vesting Date, and any unvested Shares will be forfeited upon any termination of Employment.  

Notwithstanding the foregoing: 

 

A.  On a termination of Employment due to death, disability or retirement  prior to completion of the three-year Performance Period, any outstanding unvested Shares will be prorated at the end of the performance period, as of the date of such termination and 

B. Upon a Change in Control, any outstanding, unvested Restricted Shares will be treated in accordance with the Plan.

 

C.  All other terminations, unvested shares will be forfeited.

	
Non-Transferability of the Restricted Shares:
	
Prior to vesting, the Restricted Shares may not be sold, exchanged, transferred, assigned, pledged, hypothecated, fractionalized, hedged or otherwise disposed of (including through the use of any cash-settled instrument) in any manner other than by will or by the laws of descent and distribution, and any attempt to sell, exchange, transfer, assign, pledge, hypothecate, fractionalize, hedge or otherwise dispose of the Shares delivered in respect of the Restricted Shares in violation of this Award Agreement shall be void and of no effect and Byline shall have the right to disregard the same on its books and records and advise the registrar and transfer agent of the Shares to place a stop order against the transfer of such Shares. 

	
Privileges of Share Ownership:
	
Subject to the Non-Transferability of the Restricted Shares, effective upon the Grant Date, the Grantee will have all rights of a shareholder of Byline with respect to the Restricted Shares, including voting rights and the right to receive all dividends at the times and in the manner paid to shareholders generally.  Notwithstanding the foregoing, all ordinary cash dividends or other ordinary distributions paid upon any Restricted Share will be retained by the Company and will be paid to the Grantee (without interest) when the Restricted Shares vest and will revert back to Byline if the Restricted Share upon which such dividends or other distributions were paid reverts back to Byline.  

	
	 

	
1
	
 To reflect the maximum number of Shares that can be earned under the Award.

 

 

	
Issuance and Delivery:
	
Unless otherwise determined by the Committee, delivery of the Restricted Shares will be by book-entry credit to an account maintained by the registrar and transfer agent of the Shares with the applicable restrictions on transferability imposed on such Restricted Shares by this Award Agreement. Upon the vesting of the Restricted Shares in accordance with this Award Agreement, Byline will instruct the transfer agent to electronically transfer the Grantee’s Shares to a brokerage or other account on the Grantee’s behalf (or make such other arrangements for the delivery of the Shares as Byline reasonably determines).

	
Section 83(b) Election:
	
The Grantee hereby acknowledges that the Grantee has been informed that, with respect to the grant of the Restricted Shares, if the Grantee is filing a U.S. federal income tax return for the year in which the grant of Restricted Shares occurs, the Grantee may file an election (the “Election”) with the U.S. Internal Revenue Service, within 30 days of the Grant Date, electing pursuant to Section 83(b) of the Code to be taxed currently on the Fair Market Value of the Restricted Shares on the Grant Date.  This will result in recognition of taxable income to the Grantee on the Grant Date, equal to the Fair Market Value of the Restricted Shares on such date.  Absent an Election, taxable income will be measured and recognized by the Grantee at the time the Restricted Shares vest. The Grantee is hereby encouraged to seek the advice of the Grantee’s own tax consultants in connection with the Restricted Shares and the advisability of filing the Election. THE GRANTEE UNDERSTANDS THAT ANY TAXES PAID AS A RESULT OF THE FILING OF THE ELECTION MIGHT NOT BE RECOVERED IF THE RESTRICTED SHARES ARE FORFEITED TO BYLINE. THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO TIMELY FILE THE ELECTION, EVEN IF THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON THE GRANTEE’S BEHALF. THE GRANTEE MUST NOTIFY THE COMPANY WITHIN 10 BUSINESS DAYS OF FILING ANY ELECTION.  For purposes of this Award Agreement, “business day” means any day on which the New York Stock Exchange is open for regular session trading.

	
Agreement to Protect Company Interests:
	
As a condition of  the grant of this Award and any payments made hereunder, prior to the Grant Date or within 30 days thereafter, the Grantee shall have entered into an Agreement to Protect Company Interests (or similar agreement) with Byline containing confidentiality, non-solicitation and other covenants as may be prescribed by the Committee.

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All Other Terms:
	
As set forth in the Plan.

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The Plan is incorporated herein by reference.  Except as otherwise set forth in the Award Agreement, the Award Agreement and the Plan constitute the entire agreement and understanding of the parties with respect to the Restricted Shares.  Except as expressly provided herein, in the event that any provision of the Award Agreement is inconsistent with the Plan, the terms of the Plan will control.  Except as expressly provided herein, in the event that any provision of this Award Agreement is inconsistent with any employment agreement between the Grantee and Byline (“Employment Agreement”), the terms of the Employment Agreement will control.  By accepting this Award, the Grantee agrees to be subject to the terms and conditions of the Plan.

This Award Agreement may be executed in counterparts, which together will constitute one and the same original.

 

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IN WITNESS WHEREOF, the parties have caused this Award Agreement to be duly executed and effective as of the Grant Date.

BYLINE BANCORP, INC.

By:
Name:
Title:

[NAME OF GRANTEE]

 

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SC1:4498221.2

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