Registration No. 333-______
Washington, D.C. 20549
(I.R.S. Employer
Thomas J. Murphy
Michele C. Kloeppel
St. Louis, Missouri 63101
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging"emerging growth company”company" in Rule 12b-2 of the Exchange Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
The information in this prospectus is not complete and may be changed. Arrow Financial Corporation may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Arrow Financial Corporation
2011 Employee Stock PurchaseAutomatic Dividend Reinvestment Plan
PROSPECTUS SUMMARY
This Prospectus describes the Arrow Financial Corporation Automatic Dividend Reinvestment Plan. The CompanyPlan offers existing shareholders as well as new investors a convenient and economical way to certain persons employed byacquire new or rendering services to the Company, or its direct or indirect subsidiaries, the opportunity to participate in the Plan. As of August 10, 2020, 66,547additional shares of the Company’sour Common Stock remain available for issuancewithout paying any brokerage commissions or service charges. The Plan also allows Arrow to raise capital should it determine at any time that shares to be acquired under the Plan.Plan by the Administrator on behalf of the participants will be acquired directly from Arrow instead of on the open market.
Under the Plan, all cash dividends paid on a participant's shares of Arrow Common Stock are automatically invested for such participant in additional shares of Arrow Common Stock. Participants also may make optional cash contributions to the Plan to purchase additional shares of our Common Stock.
Participation in the Plan is entirely voluntary. You may join at any time and terminate whenever you wish.
The purchase price for shares of Common Stock purchased by participants under the Plan is based on the prevailing market price of the Common Stock at the time of purchase and may be discounted from the current market price. The maximum discount for shares purchased under the Plan is 5%. The Compensation Committee of the Company’s Board of Directors determines the discount, if any, applicable from time to time to purchase under the Plan. The Compensation Committee also may set a maximum limit on the dollar amount of a participant’s periodic contributions eligible to be invested at a discount. Even if no discount applies to a particular purchase, the purchase price for shares purchased under the Plan will never be greater than the current market price of the Common Stock on the date of purchase. See Question 8 of this Prospectus for further information on the purchase price for shares under the Plan.
This Prospectus and supplemental materials provided by the Company from time to time explain the Plan and the choices available to participants. In deciding from time to time whether you will participate or continue to participate in the Plan and thereby purchase Common Stock through the Plan, you should rely only on this Prospectus, any Prospectus supplement, and the incorporated Arrow documents. Please read this prospectus carefully.
No person is authorized to give any information or to make any representation not contained in this Prospectus. You must not rely on any unauthorized representations or information. This Prospectus is an offer to sell only the shares of Common Stock offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. In deciding whether you will participate in the Plan and purchase Common StockArrow common stock through the Plan, you should rely only on this Prospectus, any Prospectus supplement, and the incorporated CompanyArrow documents. You should not assume that the information contained in this Prospectus is accurate as of any date other thandate.
INFORMATION ABOUT
ARROW FINANCIAL CORPORATION
Arrow is a two-bank holding company headquartered in Glens Falls, New York. Our principal executive office is located at 250 Glen Street, Glens Falls, New York 12801 and our telephone number is 518-745-1000. Our business is primarily owning, supervising and controlling our banking subsidiaries. Our nationally chartered banking subsidiaries are Glens Falls National Bank and Trust Company (Glens Falls National/GFNB) the datemain office of which is located in Glens Falls, New York, and Saratoga National Bank and Trust Company (Saratoga National/SNB), the main office of which is located in Saratoga Springs, New York. Active subsidiaries of Glens Falls National include Upstate Agency, LLC (an insurance agency), North Country Investment Advisers, Inc. (a registered investment adviser that provides investment advice to our proprietary mutual funds) and Arrow Properties, Inc. (a real estate investment trust, or REIT). Arrow also owns directly two subsidiary business trusts, organized in 2003 and 2004 to issue trust preferred securities (TRUPs), which are still outstanding.
Our banks serve their hometowns and the communities in Northeastern New York State through a network of banking offices. We also offer electronic banking services, including automated teller machines, point-of-sale terminals, internet banking and mobile banking. Our banks are full service commercial banks. They provide a broad range of financial products, including trust services, demand and time deposit accounts and mortgage, consumer and commercial loans. We also offer insurance products and services through our insurance agency.
Arrow Financial Corporation is a publicly traded company. The shares of Common Stock of Arrow are traded on the NasdaqGS Market under the ticker symbol AROW. Therefore, a great deal of information regarding our company is available. The following are some of the documents available to help you learn about our company:
•Our Proxy Statement filed on Schedule 14A with the Securities and Exchange Commission (“SEC”)
•Our Annual Report filed on Form 10-K with the SEC
•Our Quarterly and Current Reports filed on Forms 10-Q and 8-K with the SEC
You may read and copy any such reports, statements or other information at the SEC's public reference room at 100 F Street, N.E., in Washington, D.C. 20549. Please call the SEC at l-800-SEC-0330 for further information on the public reference room. Arrow's SEC filings are also available to the public on the SEC internet site at http://www.sec.gov.
You may also receive copies of these reports and other documents incorporated by reference in this Prospectus.Prospectus at no charge by contacting:
Investor Relations
Arrow Financial Corporation
250 Glen Street
Glens Falls, New York 12801
Tel: 518-745-1000, Ext. 4307
We also invite you to visit our web site at: www.arrowfinancial.com.
CAUTIONARY NOTE ABOUT FORWARD-LOOKINGFORWARD LOOKING STATEMENTS
The information contained in this Prospectus and in other documents incorporated by reference in this Prospectusprospectus may contain statements that are not historical in nature but rather are based on our beliefs, assumptions, expectations, estimates and projections about the future. These statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve a degree of uncertainty and attendant risk. Words such as “expects,” “believes,” “anticipates,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. Some of these statements are merely presentations of what future performance or changes in future performance would look like based on hypothetical assumptions and on simulation models. Other forward-looking statements are based on our general perceptions of market conditions and trends in business activity, both our own and in the banking industry generally, as well as current management strategies for future operations and development. We undertake no general obligation to revise or update the forward-looking statements contained in this Prospectus to reflect the occurrence of unanticipated events at any point in the future.
RISK FACTORS
An investment in our securities involves risk. Before making decisions from time to time regarding your participation in the Plan,an investment decision, you should carefully read and consider the risk factors set forth in our most recent Annual Report on Form 10-K filed with the SEC (the “Latest Form 10-K”) filed withunder the Securities and Exchange Commission (the “SEC”)heading “Risk Factors,” as well as any updated disclosure about risk factors contained in any of our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K or other filings that we have made with the SEC since the end of the fiscal year covered by the Latest Form 10-K, (the “Subsequent SEC Reports”). Our Latest Form 10-K and Subsequent SEC Reports are at all timesof which reports have been incorporated by reference in this Prospectus. Before making your decisions on participation, youYou should also refer to other information contained in or incorporated by reference in this Prospectus and any applicable Prospectus Supplement from time to time. Moreover, there are alwaysSupplement. Additional risks and uncertainties of which we are unaware or that we believe are not material at the time could also materially adversely affect our business, financial condition or results of operations. In any case, the value of our securities could decline, and you could lose all or part of your investment.
BENEFITS OF THE PLAN TO PARTICIPANTS
1. No Service Charges or Sales Commissions ‑ We pay all administrative and service charges associated with the Plan. We also pay all brokerage commissions on your purchases and sales of shares through the Plan although these payments are treated as income to you for tax purposes.
2. Full Investment of Funds ‑ The Plan permits fractional as well as full shares to be credited to your account.
3. Added Income ‑ Fractional shares, like full shares, earn dividends.
4. Simplified Record Keeping ‑ All paper work is done for you, and you receive a detailed quarterly statement.
ADMINISTRATOR
Our stock transfer agent, American Stock Transfer and Trust Company, LLC, serves as the Plan Administrator and generally oversees the Plan's operation.
American Stock Transfer and Trust Company, LLC also serves as the Plan's purchasing agent, overseeing purchases and sales of Arrow Common Stock for the Plan, and as custodian of all shares acquired and held under the Plan. American Stock Transfer and Trust Company, LLC maintains Plan accounts for individual participants and prepares and distributes to participants regular account statements.
GENERAL PLAN INFORMATIONINQUIRIES
The following, in question-and-answer form, describes the
For general information about your own Plan account, please contact:
American Stock Transfer and Trust Company, LLC:
1-888-444-0058
.
Or access your account on line at
www.astfinancial.com
The full text
Written correspondence concerning general provisions of the Plan is included as Exhibit 4.1(including whether you are eligible to the Company’s Form S-3 Registration Statement filed on June 29, 2011, with the SEC (file number 333-175236). Any participant may obtain a copy of theparticipate) or your individual Plan at no charge by submitting a request in written form to the Administrator. See Question 2.
Plan Purpose
1.What is the purpose of the Plan?
The primary purpose of the Plan is to provide certain persons employed by or rendering services to the Company or its subsidiaries with an incentive to work for the continued success of the Company by encouraging them to acquire, through the Plan, a proprietary interest in the Company in the form of the Company’s Common Stock. The Plan is also intended to help the Company retain the services of such persons and attract additional qualified personnel.
The Plan was approved by the Company’s shareholders on April 27, 2011, and became effective August 15, 2011. The Plan is the successor to the Company’s 2000 Employee Stock Purchase Plan (the “2000 Plan”), which was discontinued on such date.
Plan Administrator
2.Who is the Plan administrator and what are the administrator’s duties?
In accordance with the Plan, the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board”) will serve as the administrator of the Plan (the “Administrator”).
The Administrator has overall responsibility for the oversight and operation of the Plan. The Administrator may entrust to one or more agents selected by it certain administrative duties under the Plan, including maintenance of separate accounts for participants, distribution of account statements and other Plan materials to participants and eligible persons, and execution of Plan operations, including collection and investment of participant contributions and distribution to participants of shares held in their Plan accounts or the proceeds of sales of shares held in their accounts.
The Administrator has selected the Company’s subsidiary bank, Glens Falls National Bank and Trust Company, Glens Falls, New York (the “Administrative Agent”), to be its principal agent to assist it in administering the Plan, including performance of the tasks listed in the preceding paragraph.
All communications with the Administrator should be directed to the Administrative AgentPlan Administrator at the following address:
American Stock Transfer and Trust Company, LLC
6201 15th Avenue
Brooklyn, New York 11219
For transaction processing, mail your request to:
American Stock Transfer and Trust Company, LLC
P.O. Box 922, Wall Street Station
New York, New York 10269-0560
ENROLLING IN THE PLAN
Both existing shareholders of Arrow and persons who are not existing shareholders of Arrow are eligible to enroll as participants in the Plan. Persons in either group may enroll using paper Enrollment Forms provided by the Plan Administrator or by enrolling on-line at www.astfinancial.com. Persons enrolling on line will be asked to follow essentially the same instructions and provide the same information as persons using paper Enrollment Forms. On-line enrollees will be given the opportunity to access or download this prospectus and will be asked to acknowledge they were given that opportunity.
Existing shareholders may join as follows:
Glens Falls National BankIf you already own shares of Arrow Common Stock and Trust Company
250 Glen Street
Glens Falls, New York 12801
Attn: Human Resources Department; ESPP Administrationthe shares are registered in your name, you may join the Plan at any time by completing a paper Enrollment Form and mailing it to the address on the form, or by enrolling on-line at www.astfinancial.com. You do not need to send your stock certificates or other evidence of share ownership to the Plan Administrator in order to enroll. If you enroll, all of the shares registered in your name will participate in the Plan; provided, however, that the Plan Administrator may, in its discretion, permit partial enrollment with respect to the holdings of a Plan participant.
(Telephone number 518-415-4248)
Most participant questionsIf you own shares of Arrow Common Stock but the shares are not registered in your name (for example, if your shares are held in a brokerage or trust account and requests regardingare registered in the Plan can be answered and/broker's or fulfilled bytrustee's name), you should contact whoever holds the Administrative Agent.
The Administrative Agent has formsshares for you and direct that person to use if you wish to commence participation in the Plan, change the levelre-register some or all of your participation, sell or withdraw anyArrow shares held in your Plan account,name. You may then enroll the shares registered in your name, either by using a paper Enrollment Form or terminate your participation in the Plan.
The Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
by enrolling on-line.
ParticipationPersons who are not existing shareholders of Arrow may join as follows:
3.Who is eligible to participateYou may make your initial purchase of Arrow Common Stock at the same time that you enroll in the Plan?
The following persons are eligiblePlan. Your initial purchase of stock must be in an amount of $300 or more. If you enroll at the same time that you make your initial purchase of our stock, you may enroll either by using a paper Enrollment Form provided by our Plan Administrator or by enrolling online. If you use a paper Enrollment Form, complete and return the form to participatethe address provided on the form and simultaneously pay for your initial purchase of stock, either by (i) including with your Enrollment Form a check n the amount of your initial purchase, made payable to American Stock Transfer and Trust Company, LLC, or (ii) indicating on the Enrollment Form that you authorize American Stock Transfer and Trust Company, LLC, as purchasing agent, to debit your checking or savings account at your bank. If, in the Plan:
(i)alternative, you wish to enroll and make your initial purchase of our stock on-line, go to Regular Employeeswww.astfinancial.com. All regular employees of and follow the Companyinstructions. If you enroll and its subsidiaries who are 18 years of agebuy your initial shares on-line, you will pay for your shares by authorizing the purchasing agent to debit your checking or older and have been employed bysavings account in the Company or its subsidiaries continuously for at least one month are eligible to participate.appropriate amount.
(ii)When you enroll, your participation will automatically include any and all shares of Arrow Common Stock registered in your name at that time for the entire purchase. If you subsequently acquire additional shares of our stock (in addition to the shares you acquire through the Plan), those additional shares, if registered in your name and credited to your Plan account, will Directorsautomatically. Directors of the Company and its subsidiaries are eligible to participate be enrolled in the Plan fromwithout further action on your part.
INVESTMENT OPTIONS
Dividend Reinvestment: Once you enroll in the Plan, all cash dividends paid on your Arrow shares enrolled in the Plan (including shares acquired for you under the Plan) will be invested in additional shares of Arrow Common Stock.
Historically, Arrow's cash dividend payment dates have been on or around the 15th day of March, June, September, and December of each year (assuming dividends are being paid). The record dates for dividends are approximately 15 days prior to the payment dates. If you have questions about a record date they take office.or a payment date for a dividend, please call American Stock Transfer and Trust Company, LLC at 1-888-444-0058.
If you are contemplating enrolling shares in the Plan prior to an anticipated cash dividend for our Common Stock, your enrollment must be completed prior to the record date for that dividend in order to receive the dividend payment.
(iii) Optional Cash ContributionsAdvisory Directors:. Members of regional and community development boards or similar advisory boards established and maintained by the Company or its subsidiaries may participate If you are enrolled in the Plan.Plan, you also may acquire additional shares of our Common Stock under the Plan through optional cash contributions. Purchases of additional shares through optional cash contributions may be made on an individualized, non-recurring basis or on a pre-planned recurring basis, as explained further below. In either case, you may arrange to make such purchases by submitting the appropriate paper forms by mail or by using on-line contribution procedures. The minimum amount of any optional cash contribution is $100.
(iv) Retirees. Employees who retire from time to time under the Company’s principal retirement plan then in effect, including those who elect early retirement under the early retirement provisions of that plan, may continue to participate in the Plan, provided that they were participating at the time of their retirement.
Directors of the Company or its subsidiaries who cease to serve as directors, for any reason, after attaining the early retirement age for employeesdesignated under the Company’s principal retirement plan then in effect may continue to participate in the Plan, provided that they were participating at the time they ceased to serve as directors.
All such ex-employees or ex-directors who elect to continue their participation upon retirement may continue to participate so long as they actively participate, that is, make regular contributions to the Plan. However, if and when any such retiree participant terminates his or her participation in the Plan (i.e., discontinues making regular contributions), such participant may not resume his or her participation at a later date, unless such participant re-qualifies by virtue of once again becoming an eligible non-retiree participant (i.e., an active employee, director or advisory director).
Advisory directors of the Company and its subsidiaries who cease to serve as advisory directors may not continue to participate in the Plan beyond the date they cease to serve as such, regardless of their age, even if they were participating in the Plan at the time they ceased to serve.
Note:Carryover Participation by Participants in the Company’s 2000 Employee Stock Purchase Plan1. . Any person who was participating in the 2000 Plan at the time it was terminated and replaced by this Plan, automatically continued his or her participation in this Plan and will continue to participate in this Plan as an employee, director, advisory director or retiree, subject to the terms and conditions of this Plan, until his or her participation terminates. On such date, the plan accounts of participants under the 2000 Plan automatically became their Plan accounts under this Plan and their elections on levels of participation under the 2000 Plan automatically became their participation elections under this Plan and will remain as their participation election until subsequently changed by them. The current Plan is substantially similar in all material respects to the 2000 Plan that it supersededNon-recurring Optional Cash Contributions.
4.How does an eligible person begin hisIf you wish to acquire additional shares by making a non-recurring optional cash contribution, you may do so by paper format or her participationon-line. If you do so by paper format, you should complete the paper Contribution Form found at the bottom of your statement and send it to the address noted thereon. You may pay for shares by enclosing with the form a check in the Plan?appropriate amount, made payable to American Stock Transfer and Trust Company, LLC. If you choose to make a non-recurring
optional cash contribution on-line, go to www.astfinancial.com and follow the instructions. If you use the on-line format, you submit your payment by authorizing the purchasing agent to debit your checking or savings account in the appropriate amount.
Any person who is eligible to participateAmounts submitted as non-recurring optional cash contributions will be invested in additional shares usually on the first business day after the purchasing agent's receipt thereof, or as soon as practicable thereafter as determined by the purchasing agent. See the section of the Prospectus titled “How the Plan and wishes to participate may do so by completing the prescribed participation form and returning it to the Administrative Agent.Purchases Shares; Pricing of Shares.”
See Question 2. For Employees, participation will commence as of the first day of the first month following receipt by the Administrative Agent of their participation form. For other participants, participation will commence on the earliest practicable date after the Administrative Agent’s receipt of their form.Recurring Optional Cash Contributions.
5.How doesIf you wish to purchase additional shares of our Common Stock through the Plan by making optional cash contributions on a participantmonthly basis, you may sign up to do so at any time, provided you are enrolled in the Plan. You may sign up for recurring purchases either by completing a paper form and sending it to the purchasing agent at the appropriate address, or by using on-line sign up procedures. In either case, you must arrange for regular payments of your designated optional cash contribution amount by authorizing the Plan Administrator to withdraw such amount monthly from your checking or savings account at your bank. Please allow 4 to 6 weeks after you sign up for recurring optional cash contributions for the automatic withdrawals from your bank account and the resulting purchase of shares on your behalf to begin.
If you sign up to make monthly optional cash contributions to the Plan?Plan, you may discontinue doing so or change the amount of your recurring contribution at any time, by notifying the Plan Administrator of the change in writing.
For participants who elect to make monthly optional cash contributions to the Plan, contribution amounts will be automatically withdrawn from their bank accounts only on a specific day or days each month designated by the Plan Administrator. Currently, the Plan Administrator has designated that such withdrawals will be effected on the 10th day of each month. Amounts withdrawn will be invested in additional shares of our Common Stock as soon as practicable after their withdrawal as determined by the Plan Administrator.
Participants makeNo optional cash contribution, whether submitted on a recurring (i.e., monthly) or a non-recurring basis, may be in an amount of less than $100. Optional cash contributions tosubmitted by a participant (including, if the Plan Administrator so determines, by multiple participants who are affiliates of one another) may not exceed $20,000 in any calendar month. Contributions received by the Plan Administrator that do not conform with dollar limits or rules established by the Plan Administrator for such contributions will be returned or refunded as follows:soon as possible.
(i)If your check or direct debit is returned as unpaid by your bank, the Plan Administrator will debit your Plan account in the applicable amount if the funds have not yet been invested. If however, the funds have been invested, the Plan Administrator reserves the right to sell the shares purchased with such funds. If the sale of the shares is not sufficient to satisfy the amount of the returned check or direct debit, the Plan Administrator will sell additional shares from your account as necessary to cover the unpaid amounts. In addition, the casePlan Administrator will also sell additional shares from your account to recover the current cost of the returned check or direct debit, including processing costs.
participating employees,
For further information on purchasing shares through optional cash contributions, are made through automatic regular payroll deductions.contact the Plan Administrator.
(ii) In the case of
participating directors and advisory directors, contributions are made through either or both of two payment methods: (1) automatic regular conversion of all or a portion of the directors’ or advisory directors’ fees (including retainers and fees for serving on committees of boards) otherwise payable to them in cash by the Company or its subsidiaries from time to time (“Automatic Conversion of Directors’ Fees”), or (2) automatic direct monthly withdrawals from deposit accounts maintained by such directors or advisory directors with the Company’s subsidiary banks (“Automatic Withdrawals from Deposit Accounts”).
HOW THE PLAN PURCHASES SHARES;
PRICING OF SHARES
(iii) In the case of participating retirees, contributions are made through Automatic Withdrawals from Deposit Accounts, unless the retirees also are receiving regular payments of fees from the Company or its subsidiaries from which such contributions may automatically be deducted and applied, in which case contributions may be made, at the election of the participant, through deduction and application of amounts drawn from such payments.
In certain circumstances, the Administrator in its discretion may permit participants to make regular contributions at regular intervals to the Plan in other ways.
Optional one-time cash purchases of shares are not permitted under the Plan, including by those persons who are currently participating through regular contributions.
6.What are the dollar limits on participant contributions?
The Compensation Committee establishes minimum and maximum dollar limits on participant contributions from time to time. The Compensation Committee also may establish from time to time a maximum dollar amount of contributions that are eligible to be invested at a discount, which may be a lesser amount than the overall maximum dollar limit on contributions.
Currently, for participating employees and participating retirees, the minimum monthly contribution is $5.00 and the maximum monthly contribution is $2,000. The maximum dollar amount that is eligible to be invested at a discount is currently $1,000 per month.
For participating directors and advisory directors, the current limitation on minimum and maximum contributions may vary, depending on whether the individual is contributing through Automatic Conversion of Directors’ Fees or Automatic Withdrawals from Deposit Accounts or both such methods. If a director or advisory director is contributing through Automatic Conversion of Directors’ Fees, the minimum contribution is 1% of all such fees, including retainers and committee fees, payable in cash from time to time (which may vary by month), and the maximum contribution is 100% of all such fees payable in cash from time to time. If a director or advisory director is contributing through Automatic Withdrawals from Deposit Accounts, the minimum and maximum contributions are $5.00 per month and $2,000 per month, respectively, the same limitations that apply to participating employees and participating retirees. If an individual director is contributing through both methods, the minimum and maximum limits are applied separately. For directors and advisory directors, however, the maximum dollar amount of contributions in any one month entitled to be invested at a discount is currently the same as for other participants, i.e., $1,000, including both forms of contributions (i.e., not $1,000 from fees and $1,000 from withdrawals).
These minimum and maximum levels may be changed from time to time by the Compensation Committee.
Under the Plan, neither the Administrator nor any of its agents may waive these maximum and minimum levels for any individual participants, for any reason.
Within the minimum and maximum contribution limits established from time to time, you may select your own individual level of contributions to the Plan. Participating employees select a dollar amount to be withheld from their paycheck per pay period (e.g., $20.00 per pay period). Participating directors, advisory directors and retirees who contribute through Automatic Withdrawals from Deposit Accounts select a dollar amount to be withdrawn and contributed per month (e.g., $40.00 per month). Participating directors and advisory directors who participate through conversion of directors’ fees designate a fixed percentage of such fees owed to them on an ongoing basis (e.g., 50% of fees).
You will indicate your desired level of participation, including any changes in your level of participation, on forms obtained from the Administrative Agent. See Question 2.
7.How often may I change the level of my participation? If I terminate my participation, may I resume my participation later?
You may change your level of participation in the Plan from time to time, subject to such limitations as may be established from time to time by the Compensation Committee. Currently, participants are permitted to change their level of participation not more frequently than once in any calendar quarter.
If you decrease your level of contributions to zero, you will be treated as having terminated your participation in the Plan. Participants, including retiree participants, who terminate their participation are not permitted to resume participation for one full year from the end of the calendar quarter in which they terminated participation, and then may resume participation only if on the date of resumption they qualify once again to become non-retiree participants in the Plan-i.e., they continue to serve or have resumed serving as employees, directors or advisory directors. See Question 17.
8.What is the discount for shares purchased under the Plan? What are the limits on discounted purchases?
If so determined by the Compensation Committee, participants may receive a discount from the current market price of the Common Stock for some or all of the shares acquired on their behalf under the Plan. The maximum such discount permitted under the Plan at any time is 5%. Currently, the Compensation Committee has determined that the discount under the Plan will be 5%. That is, shares purchased under the Plan with a participant’s contributions will be purchased at 95% of the current market price of the Common Stock, subject to the limits on discounted purchases discussed in the following paragraph. The current market price is defined as the average of the high and low sales prices for the Common Stock as reported on the NASDAQ Global Select Market System for the last trading date prior to the date of purchase.
The Compensation Committee may set limits from time to time on the maximum dollar amount of the contributions by any participant that will be invested at the applicable discounted purchase price. Any contributions by a participant in excess of such amount (but within the overall maximum dollar amount limitation applicable to such participant) would be invested in shares of Common Stock at 100% of the current market price, that is, on a non-discounted basis. Currently, the Compensation Committee has determined that the 5% price discount applies only to the first $1,000 of a participant’s monthly contributions to the Plan, regardless of a participant’s method of contribution and, in the case of participating directors or advisory directors, even if the participant utilizes both permitted methods of participation, i.e., automatic conversion of directors’ fees and automatic withdrawals from a deposit account.
9.How and when are shares purchased under the Plan?
On the first business day of each month, all participant contributions to the Plan received by the Administrative Agent during the preceding month, including by payroll withholdings, will be commingled and invested in shares of Common Stock. All shares of our Common Stock purchasedacquired under the Plan are purchased directly fromby the Company (not on the open market) and are credited toPlan's purchasing agent (also the Plan accounts of individual participants immediately. You will receive credit for fractional shareholdings up to three decimal places (.001)Administrator), as appropriate.American Stock Transfer and Trust Company, LLC.
Periodic statements for your Plan account will show all relevant information forArrow shares acquired on your behalf with your Plan contributions. See Question 14 regarding account statements.
10.In whose name will shares acquired under the Plan be registered?
All shares purchased under the Plan on your behalf will be delivered to the Administrative Agent and will be registered on the stock transfer books of the Company in the name of the Administrative Agent or its nominee. The shares will remain so registered for as long as the shares are held in your Plan account. If and when the shares are subsequently distributed by the Administrative Agent out of your Plan account to you or your designee(s), they will be registered in your name or that of your designee(s).
11.May I specify a co-owner of my Plan account? If so, what impact will the addition of such a co-owner have upon my rights as a participant under the Plan?
As a participant in the Plan, you may specify that your Plan account is to be a joint account. To have a joint account, you must identify on your participation form one or more co-owners of your account. These co-owners may be any members of your immediate family (e.g., spouse, children, siblings) or may be any other individuals with whom you
have a personal or business relationship. All co-owners must be natural persons. You may not have a joint account with any business entity, such as a corporation or a partnership, nor may you specify any trust as a co-owner.In addition, you may not accept payment in any form, cash or otherwise, from any co-owner(s) of your account that is applied by you, directly or indirectly, or reimburses you for the purchase of any shares of Common Stock through the Plan.
If you decide to name one or more co-owners and thus make your Plan account a joint account, you and the other co-owner(s) will have certain rights with respect to the assets in the account. For example, any decision to sell or withdraw shares from the account will have to be approved by all co-owners of the account. See Questions 15 and 16 regarding the sale or withdrawal of shares from Plan accounts. Similarly, if you have a joint account and your participation in the Plan terminates, decisions regarding the distribution of account assets upon closing of the account also will have to be approved by all co-owners. See Question 19.
On the other hand, you as the Plan participant have the sole right to determine any changes in your level of participation in the Plan or to terminate your participation in the Plan, even if your account is a joint account.
If you have previously established a Plan account in your own name but wish to make it a joint account by adding one or more co-owners, or if you have previously established a joint account but wish to put the account in your own name or to add or subtract co-owners, you may do so without discontinuing your participation in, or contributions to, the Plan. You will simply need to complete and deliver to the Administrative Agent a new participation form showing the change in ownership of your account and any other documentation required by the Administrative Agent.
Such a change in Plan account ownership will be treated as the establishment by you of a new account and a termination and closing of your old account, with the assets in your old account to be distributed as directed by you (if the old account is solely owned by you) or as directed by you and the co-owners (if the old account is a joint account). Unlike the case of a normal termination of a Plan account, however, any change in ownership of your Plan account will not require you, the participant, to stay outdividend reinvestment feature of the Plan for any designated period of time.
All joint accounts are established as joint tenancies with right of survivorship. This means that if the participant or any co-owner dies while the assets are held in the joint account, the ownership interest of the deceased in account assets automatically passes to and vests in the surviving account owner or owners (if multiple owners survive, to the multiple owners jointly).
For U.S. Federal income tax considerations of jointly owned accounts, see Question 23.
12.What is the cost to participants of participating in the Plan? Who pays brokerage commissions?
You will not be charged for the cost of opening and maintaining your Plan account. You will not be charged any brokerage commissions or fees for purchases of shares on your behalf under the Plan. You will not be charged any fees for withdrawing shares from your Plan account or for the distribution of shares to you when your account is closed.
However, if the Administrative Agent or its representatives sell any shares held in your Plan account into the market, as you may direct from time to time, while your participation continues or upon the closing of your account when your participation terminates, any brokerage commissions or transfer taxes paid in connection with the sales will be deducted from the sale proceeds before they are distributed to you and any co-owners. No administrative fees will be charged. See Questions 15 and 19, below, on sales of your shares by the Administrative Agent or its selected broker(s) or agent(s) and the consequences of closing your account.
13.How will dividends be paid on shares held in my Plan account?
All cash dividends paid on shares of Common Stock held in your Plan account will be paid to the record owner of the shares (the Administrative Agent or its nominee) and credited by the Administrative Agent to your Plan account. These dividends will then be reinvested automatically in additional shares of Common Stock under the Arrow Financial Corporation Automatic Dividend Reinvestment Plan (the “DRIP”) on the next dividend reinvestment date, which will likely precede, but will not be later than the next investment date under the Plan. The DRIP is available to the Company’s shareholders generally and provides for automatic reinvestment of the cash dividends that are paid from time to time on shares that are participating in the DRIP in additional shares of Common Stock. The reinvestment under the DRIP of cash dividends paid from time to time on the shares held in your Plan account will not, however, result in your receiving a separate account in your name under the DRIP. Rather, the new shares of
Common Stock purchased through the DRIP with the cash dividends paid on your Plan account shares will be credited automatically to your Plan account and will appear on your next Plan account statement. Even those Plan participants who also separately participate in the DRIP will not be entitled to have the new shares purchased with the cash dividends paid on their Plan account shares credited to their separate DRIP accounts.
Note: When cash dividends on your Plan shares are reinvested in additional shares of Common Stock through the DRIP, the additional shares will be purchased at the applicable DRIP purchase price, not at the discounted price, available for some or all of the shares purchased by you under the Plan.
Shares purchased through the DRIP with reinvested dividends paid on your Plan shares will be purchased at the same time and in the same manner as all other shares purchased under the DRIP. Such shares may be purchased (i) on the open market and/or (ii) directly from the CompanyArrow, as determined from time to time by Arrow, consistent with applicable securities laws. Shares acquired directly from Arrow will be acquired at a purchase price based on the Company. Currently, all shares purchased under the DRIP are purchased at prices tied to theprevailing market price for the shares, as further described below.
All other shares acquired through the Plan, including shares acquired with optional cash contributions received from Plan participants and cash contributions received from new enrollees, will be purchased on the open market. Purchases in the open market may be made on any securities exchange where our shares are traded.
Shares Purchased on the Open Market
When the purchasing agent acquires shares for the Plan in the open market, it has sole authority to determine the exact timing of the Common Stockpurchases and in accordance withselecting the DRIP. Purchases are effected as soon as practicablebroker/dealer making the purchases, which broker/dealer may be an affiliate of the purchasing agent. Neither Arrow nor any participant in the Plan has the ability to control the timing of purchases or the selection of broker/dealers.
Generally, purchases of shares on the open market begin on or shortly after the date the purchasing agent receives the funds to be invested, usually on the first business day after receipt. For reinvested dividends, the receipt date is the dividend payment date. You may obtain a copydate, which currently is on or about the 15th day of the DRIP brochure or prospectus describing in more detail how the plan operates freeMarch, June, September and December of charge from the Administrative Agent.each year (assuming dividends are being paid).
The only waypurchasing agent is not required to invest amounts received by it for investment immediately after its receipt thereof if doing so would not, in the purchasing agent's good faith judgment, be in the best interests of the participants on whose behalf such funds are to be invested. In such cases, the purchasing agent may extend its purchase of shares with funds received for investment over a period of time not to exceed thirty (30) days from receipt, if and as permitted by law. Therefore, you will not be able to receive paymentstime with precision any market purchases of shares for your account and will bear the market risk associated with short-term fluctuations in cash equalthe price of Arrow Common Stock. The stock price may go up or down before the purchasing agent completes its purchases of stock with your funds and the commingled funds of other participants. In addition, you will not earn interest on any funds sent by you or on your behalf to the cash dividends declared and paid bypurchasing agent prior to the Company from time to time on the shares of Common Stock acquired by you through the Plan is to withdraw such shares from the Plan.those funds are invested in shares.
IfWhen the Company declares and pays a stock dividendpurchasing agent commences market purchases with reinvested dividends or a stock split, the shares distributable with respect to the shares of Common Stock held in your Plan account will be distributed to the Administrative Agent who will immediately credit the shares to your Plan account. The shares, like all other shares in your Plan account, will be registered in the name of the Administrative Agent or its nominee.
No interest will be paid to you on any cash held in your Plan accountcontributions at any time including cash contributionson any day, it aggregates all amounts received by it prior to your account or cash dividends received on shares heldthat time and not previously invested by it in your account, while such funds await investment in additional shares of Common Stock.
14.What will my account statements look like? What other information will I receive?
You will receive account statements from the Administrative Agent on a monthly basis. Your account statement will reflect all transactions in your Plan account during the 30-day period preceding the statement date. Among other things, the statement will reflect:
•All contributions by you during the period.
•shares. All purchases of shares for Plan participants occurring in any one trading day generally will be aggregated by the purchasing agent, and the purchase price per share for each purchasing participant that day will be the weighted average price of Common Stock on your behalf.
•All dividends and other distributions on shares held in your account, includingall shares purchased with cash dividends.that day on behalf of the participants.
•Any sales of shares held in your account duringNeither Arrow nor the period, andPlan Administrator is responsible for the net proceeds of sales after payment of any brokerage commissions or transfer taxes. See Question 15.
•Any withdrawals of shares from your account during the period. See Question 16.
•Total shareholdings in your account at period end.
Periodic statements also will identify the discounted purchase price paid for those shares acquired during the statement period at a discount on your behalf, as well as the current market price of such shares on the date of purchase. The difference between the two pricesopen market for shares acquired at a discount (i.e., the current market price minus the discounted purchase price) will be taxed as ordinary income to you on the date of purchase. See Question 23.
Your account statements can serve as your permanent cost record for shares acquired under the Plan, which you will need for tax purposes if you sell the shares at a later date. Please keep your statements in a safe place.participants' accounts.
Shares Purchased From Arrow
If at any time Arrow has determined that some or all of the cash dividends to be reinvested under the Plan will be invested in shares to be acquired directly from Arrow, such dividends received by the purchasing agent will be reinvested by it as soon as practicable after receipt thereof, by transfer of such funds back to Arrow, in return for Arrow's issuance of the appropriate number of shares. The price per share for all shares acquired from Arrow on any day will be the average closing price of Arrow Common Stock as reported on the NasdaqGS Market for the three (3) trading days immediately preceding the purchase, rounded to four (4) decimal places. Shares acquired under the Plan directly from Arrow may be authorized but unissued shares or treasury shares.
Stock Dividends
Arrow may declare and pay stock dividends from time to time. If you are participating in the Plan, all stock dividends paid on the Arrow shares in your Plan account will be credited directly to your Plan account on the record payment date along with any dividends paid on shares held by you in certificated or book-entry form. Transaction processing may be curtailed or suspended by the Plan Administrator during the pendency of any such transaction.
Possible Suspensions of Purchases
On occasion, purchases of Arrow shares under the Plan may be temporarily suspended for legal reasons. Neither Arrow nor the Plan Administrator shall be held accountable for any such suspension. In the event of an account suspension you will receive a notice from the Administrator under the Plan.
USE OF PROCEEDS
Arrow is unable to predict the number of shares of Common Stock that will be purchased under the Plan directly from Arrow (as opposed to on the open market) or the prices at which any such shares will be purchased from it. Arrow intends to use any proceeds derived by it from sales of its shares under the Plan for general corporate purposes. Arrow will not receive any proceeds from purchases of its shares on the open market made under the Plan by the Administrator on behalf of Plan participants.
PLAN OF DISTRIBUTION
Shares of our Common Stock purchased by the Administrator under the Plan may be purchased on the open market or directly from Arrow, consistent with the procedures and subject to the limitations described in the section of this Prospectus titled “How the Plan Purchases Shares; Pricing of Shares.” Plan participants for whose accounts such shares are acquired (including brokers or dealers) may resell such shares either in market transactions (including coverage of short positions) on any national securities exchange on which shares of our Common Stock trade or in privately negotiated transactions, without restriction under the Securities Act of 1933, as amended, except for any such participants who may also be deemed affiliates of Arrow or underwriters with respect to their purchase and sale of such shares. Our common stock is currently listed on NasdaqGS.
Subject to the number of our shares registered and available for offer and sale by us under the Plan, there is no total maximum number of shares that can be sold by us under the Plan pursuant to the reinvestment of dividends or optional cash purchases.
We pay all administrative and service charges associated with the Plan. We also pay all brokerage commissions on your purchases and sales of shares through the Plan although these commission payments will be treated as income to you for tax purposes.
Our Common Stock may not be available under the Plan in all states or jurisdictions. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any of our Common Stock or other securities in any state or any other jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction.
SHARES HELD IN PLAN ACCOUNTS
In Whose Name Are Shares Registered?
The purchasing agent normally will register in its own name, or in the name of its nominee, all shares of Arrow Common Stock purchased for and held in your Plan account. Thus, you will not normally receive stock certificates or evidence of book-entry share ownership for the shares acquired for your Plan account.
If you submit a request, however, American Stock Transfer and Trust Company, LLC will send you a stock certificate or evidence of book-entry share ownership for some or all of the shares in your account, registered in your name, without terminating the shares' participation in the Plan. You may submit a request for one or more stock certificates or evidence of book-entry share ownership in writing or on-line, at www.astfinancial.com. Shares represented by such certificates or evidence will still participate in the Plan.
You may also elect to withdraw shares held in your account from participating in the Plan as discussed in the section titled “Sale, Withdrawal or Transfer of Shares in Your Plan Account.”
No certificates or evidence for fractional shares will be issued.
Voting
You will control the voting of all Arrow shares held in your Plan account. The shares will be voted by the Plan Administrator or its nominee in accordance with your instructions. When Arrow distributes proxy materials to its shareholders, the Plan Administrator or the outside proxy agent will forward a set of the materials to you, including voting instructions for the shares you own through the Plan. You may return the proxy directly to Arrow and your Plan shares will be voted as you instruct.
Other Shareholder Rights
You will not lose any rights you have as an Arrow shareholder by participating in the Plan. If shareholders are given choices in exercising their rights, the Plan Administrator will act in accordance with your instructions in enabling you to exercise your rights for all shares in your Plan account as you choose.
Account Statements
As a beneficial ownerparticipant, you will receive regular account statements from the Plan Administrator, American Stock Transfer and Trust Company, LLC. The statements will disclose the total amount invested on your behalf in stock purchases in the preceding period, the price paid per share and number of shares purchased in each such transaction, as well as other account information.
SALE, WITHDRAWAL OR TRANSFER OF SHARES
IN YOUR PLAN ACCOUNT
Sales
You can sell some or all of the Arrow shares held in your Plan account at any time by notifying the purchasing agent, American Stock Transfer and Trust Company, LLC. The purchasing agent will effect the sale of your shares on the open market as soon as practicable after receiving your instruction. The purchasing agent will have sole authority over the precise timing of the sale and selection of the broker/dealer executing the sale. Therefore, you will not be able to time with precision sales of shares from your account and will bear the market risk associated with any short-term fluctuation in the price of Arrow Common Stock. Generally, you will not be permitted to sell shares purchased for your account by the purchasing agent using funds received from you in a personal check within fifteen (15) days of the purchasing agent's receipt of the check.
All sales of shares for Plan participants occurring in any one trading day generally will be aggregated by the purchasing agent, and the sale price for each selling participant that day will be the weighted average price of all shares sold that day for participants. You will receive the cash proceeds from any sale of your Plan account shares less any required tax withholdings directly from the purchasing agent. These cash proceeds may be held by the Plan Administrator for a period of up to ten (10) days in its discretion in order to determine that transaction proceeds have cleared.
Of course, if you wish to sell some or all of your Plan shares through a stockbroker of your choice, you may withdraw the shares from the Plan and proceed with your sale.
Withdrawals
You may withdraw some of your Arrow shares from participation in the Plan, without terminating your participation with respect to the rest of your Arrow shares, by sending a request for withdrawal to the purchasing agent, American Stock Transfer and Trust Company, LLC, specifying the number of shares you wish to withdraw. You may request such withdrawal in writing or on-line at www.astfinancial.com
Withdrawn shares will not continue to participate in the Plan after the effective date of withdrawal, while the remaining shares in your account will continue to participate. If the shares withdrawn from participation are held in your Plan account, you will receive one or more certificates (or evidence of book-entry share ownership) representing such shares from the purchasing agent, registered in your name. If you request withdrawal from participation of all of your shares that are participating in the Plan, your request will be treated as a notice of termination of your participation in the Plan. Withdrawals may be subject to procedures adopted by the Plan Administrator.
You also may elect upon termination to leave your shares in your Plan account indefinitely; if so, subsequent cash dividends will be sent directly to you and subsequent stock dividends on shares in your Plan account will be credited to your account.
Gifts
You may also use the Plan to make gifts of shares held in your Plan account to anyone you choose, whether or not the intended recipient (donee) is a current participant in the Plan or wishes to become a participant.
1. If your donee already participates in the Plan, you may either transfer the shares directly from your account to the donee's account or make an optional cash contribution to the donee's account in an amount equal to the current market value of the shares in your account that you have identified as constituting the gift.
2. If your donee does not currently participate in the Plan but wishes to open an account, you may either transfer the shares directly from your account into a new account established for the donee or make an initial cash contribution to the donee's new account equal to the current market value of the gifted shares.
3. If your donee is not a participant and does not wish to become one, you may transfer any number of shares out of your Plan account to the donee.
4. If you wish to transfer shares from your account to a Plan account of your donee, or to your donee directly, you must transfer a whole number of shares unless you transfer your entire Plan account.
In order to transfer the ownership of all or a part of the whole shares of Arrow Common Stock held in your Plan account, you will receive all materials regularly distributed bymust mail to the purchasing agent, American Stock Transfer and Trust Company, to its shareholders. This includes noticesLLC, a transfer request form along with a properly signed stock power and proxy materials for meetingscertificates or other evidence of Company shareholders, annual reports to shareholders, and other periodic communications. You also will have the authority to direct the Administrative Agent on how to votestock ownership of the shares held inyou wish to transfer. The stock power form can be obtained from the purchasing agent, a bank, or a stock broker. You must have your account and, to the extent that Company shareholders may have other rights, how those rights should be exercisedsignature guaranteed by the Administrative Agent with respect to the shares in your account.
Sale and Withdrawal of Shares
15.May I sell shares held in my Plan account?
Yes. You may elect, without terminating your participationa financial institution participating in the Plan, to haveMedallion Guarantee program. The Medallion Guarantee program insures that the Administrative Agent sell someindividual signing the stock power or all of the whole shares heldcertificate is, in your account. Currently, you may elect such sales not more than twice in any calendar year. Written requests for sales of shares should be sent tofact, the Administrative Agent. See Question 2.
The Administrative Agent conducts market sales of shares for Plan account holders on a regularly scheduled basis, as set by the Compensation Committee. Currently, such sales are conducted on the 20th day of each month (or if such is not a trading day, on the next trading day thereafter), and cover all sale requests received by the Administrative Agent on or before 12:00 noon, local time, on the 15th day of the month. Promptly after the sale of your shares, the Administrative Agent will send you a check in the amount of the proceeds, less applicable brokerage commissions or transfer taxes, if any. No administrative fees are charged for this service.
Note: If your account is a joint account, any sale of shares held in the account must be authorized by you and all co-owners of the account. The written request for sale delivered to the Administrative Agent on the prescribed form must be executed by you and all co-owners. Unless otherwise indicated on the request form, the proceeds of the sale of any shares held in a joint account will be made payable to you and the co-owner or co-owners of the account jointly.
Note: If you are a Company insider or affiliate, there are special restrictions on your ability to sell Plan shares. See Question 21.
16.May I withdraw shares from my Plan account?
Yes. You may elect, without terminating your participation in the Plan, to withdraw some or all of the whole shares held in your account. Under current Plan rules, you may elect such withdrawals not more than twice in any calendar year. Written requests for withdrawals of shares should be sent to the Administrative Agent. See Question 2. If you are a Company insider or affiliate, there are special restrictions on your ability to withdraw Plan shares. See Question 21.
The Administrative Agent will send to you one or more certificates evidencing the withdrawn shares within 30 days of receipt of your request. The withdrawn shares will be registered in any name(s) you may specify. If you do not specify, the shares will be registered in your nameowner as it appears on the recordsstock certificate, stock power or other evidence of stock ownership.
The purchasing agent will send the Plan (assuming you are the sole ownerrecipients of the Plan account).gifts a notice of such transfer.
If your request to transfer shares out of your account is received during the 3 business days prior to a jointdividend record date, the processing of your request may be held until your account any withdrawal of shares from the account mustis credited with reinvested dividends. This holding period could be authorized by you and all co-owners of the account. The written request for withdrawal delivered to the Administrative Agent on the prescribed form must be executed by you and all co-owners. Unless otherwise indicated on the request form, the withdrawn shares will be registered in the names of you and the co-owner or co-owners of the account jointly.as long as 4 weeks.
After you withdraw shares from the Plan, any dividends or other distributions on the withdrawn shares will be mailed by the Company or its paying agent directly to you and/or the other persons in whose name the shares may have been registered. Dividends on withdrawn shares will not be reinvested automatically in additional shares of Common Stock, unless you separately elect to participate in the Company’s DRIP with respect to such shares.No Commissions
Plan participants pay no brokerage commissions or fees for any purchases or sales of stock for their Plan accounts, although they are subject to taxation on the value of such commissions or fees paid on their behalf by Arrow. Participants are not charged any fees for distributions of shares or stock certificates or evidence of book-entry share ownership to them out of their Plan accounts. All expenses of the Plan are borne by Arrow.
Termination of Participation in Plan
17.How do I terminate my participation in the Plan? What happens if my participation terminates?Terminating Your Account
You may voluntarily terminate your participation in the Plan at any time, and thereby terminate your Plan account, by giving notice to the Plan Administrator, American Stock Transfer and Trust Company, LLC. You may give notice by paper format, i.e., by written notice sent to the Administrative Agent.Plan Administrator, or on-line, at www.astfinancial.com. Termination will be effective onupon the datePlan Administrator's receipt of your notice. Arrow also may terminate your account at any time by notice mailed to you selectand the purchasing agent. If your request to terminate participation in the notice, which may notPlan is received at least 2 business days prior to any dividend payment date, your account will be earlier thanterminated and that dividend will be paid to you in cash. If your request to terminate participation in the 5thplan is received during the 3 business day after thedays prior to any dividend payment date, of your notice of termination.that dividend will be invested. However, all subsequent dividends will be paid to you in cash.
Any reductionWhat Happens to Your Shares?
Upon termination, certificates (or evidence of your contributions under the Plan to zero will also constitute a termination of your participation in the Plan, whichbook-entry share ownership) for full Arrow shares will be deemed effectiveissued in your name. If you choose, however, the shares will be sold by the purchasing agent, American Stock Transfer and Trust Company, LLC, and the proceeds sent to you. Sales generally will be aggregated with other sales occurring that day for other Plan participants, with all participants to receive the same weighted average price for all shares sold that day. Fractional shares will be automatically converted to cash, based on the firstcurrent market price of Arrow Common Stock, and the proceeds remitted to you.
You also may elect upon termination to leave your shares in your Plan account indefinitely; if so, subsequent investment datecash dividends will be sent directly to you and subsequent stock dividends on whichshares in your Plan contributions would otherwise have been invested onaccount will be credited to your behalf butaccount.
What if You Sell All Your Arrow Shares that are not invested as a result of your reduction of contributions to zero.in Your Account?
If you voluntarilyare a Plan participant but dispose of all Arrow shares registered in your name that are not held in your account, the Plan Administrator may, at its option, terminate your participation,account and distribute to you may not re-enter the Plan until at least one full year has elapsed after the end of the calendar quarterall shares then held in which the termination becomes effective,your account. Otherwise, your account will continue and then may resume participation only if you are then serving as an employee, director or advisory director.
Note: Retired employees or directors who continue to participate in the Plan after their retirement (i.e., retiree participants) may not reduce their contributions to zero (or otherwise terminate their participation) and then resume their contributions (participation) at a later date unless theydividends subsequently re-qualify for participation by once again becoming an active employee, director or advisory director.
When your participation in the Plan terminates, your Plan account is closed andpaid on the shares in your account will be (1) distributed to you and any co-owners, or (2) sold upon your request, with the sale proceeds distributed to you and any co-owners, or (3) transferred into an accountinvested in your name in the Company’s DRIP, as you choose. You may indicate your choice among options (1), (2) and (3) on an account distribution form obtained from the Administrative Agent. If your account is a joint account, the choice of an option for distribution of your account assets must be approved by all co-owner(s) of the account. See Question 19.additional shares.
What if You Terminate Your Participation in the Plan but Later Desire to Re-Enroll in the Plan?
Generally, a participant who previously ceased Plan participation may resume participation at any time by following the procedures set forth in the section titled “Enrolling in the Plan.” However, Arrow and the Plan Administrator each reserves the right to reject any request to resume participation from a previous Plan participant on the basis of excessive enrollments and terminations by such former participant or its affiliates.
RESPONSIBILITIES OF THE PLAN ADMINISTRATOR AND ARROW
The Plan Administrator's responsibilities include, without limitation, administration of the Plan; keeping records of all Plan accounts; sending periodic statements of Plan activities to each participant; and the performance of other duties relating to the Plan. The Plan Administrator also acts as the purchasing agent under the Plan. If the Plan Administrator resigns or otherwise ceases to act as Plan Administrator, Arrow will appoint a new plan administrator to administer the Plan.
Arrow and American Stock Transfer and Trust Company, LLC, as the Plan Administrator, purchasing agent and custodian, are not liable for any act or failure to act on their part, if the act or failure to act was not knowingly wrongful. Arrow and American Stock Transfer and Trust Company, LLC also are not liable (1) for failing to terminate a participant's account when the participant dies, if they do not know of the death, (2) for the price at which shares are purchased or sold for a participant's account, or (3) for the timing of purchases or sales for a participant's account.
Neither Arrow nor the Plan Administrator will have any duties, responsibilities or liabilities other than those expressly set forth in the Plan or imposed by applicable law. Since the Plan Administrator is responsible for administering the Plan, Arrow specifically disclaims any responsibility for administration of the Plan. None of Arrow's directors, officers or employees will have any personal liability under the Plan.
Neither Arrow nor American Stock Transfer and Trust Company, LLC is able to guarantee you wisha profit or protect you against a loss on the shares you purchase under the Plan.
Although the Plan contemplates the continuation of quarterly cash dividend payments by Arrow, the payment of cash dividends is at the discretion of Arrow's Board of Directors, and is subject to limitations set forth in applicable laws and regulations and, possibly, debt agreements to which Arrow is a party. In deciding upon dividends, the Board considers current and expected future earnings, the financial condition of Arrow and other factors. If cash dividends are suspended for any period of time, the Plan, at Arrow's determination, mayalso be suspended and optional cash contributions will not be accepted or invested.
Arrow reserves the right to suspend, change or terminate the Plan at any time. Arrow and the Plan Administrator each reserve the right to suspend or terminate your participation in the Plan at any time. In either case, you should contact the Administrative Agent to obtain the appropriate forms. See Question 2.will be notified in writing. Your pre-existing Plan account will not be negatively affected by such action.
18.What happens when I retire from the Company or my service with the Company terminates?
U.S. FEDERAL INCOME TAX INFORMATION
If (i) you retire as an employee or cease to serve as
The following is a director at or after attainingsummary of the age designated as the early retirement agegeneral U.S. Federal income tax consequences for employees under the Company’s principal retirement plan, and (ii) you areindividuals participating in the PlanPlan. This summary is not a comprehensive summary of all the U.S. Federal income tax considerations that may be relevant to a participant in the Plan. This summary is based on the laws in effect at the time of such retirement or cessationthe preparation of service,this document. Such laws may be changed before the taxable events described actually occur. Therefore, you may electare urged to continue to participate in the Plan thereafter as a “retiree participant,” at the same or a different level of participation, by so notifying the Company and filling out an appropriate form. The early retirement age for employees currently designated under the Company’s principal retirement plan is 55 with 10 years of service. All retiree participants are subject to the same terms and conditions as other participants in the Plan, except that retiree participants who terminate their participation will not be permitted to resume participating in the Plan, even after expiration of the mandatory waiting period (one full year after the end of the calendar quarter in which the termination of participation occurred), unless at such time they once again qualify to participate as an active employee, director or advisory director.
Ifconsult your employment or your service as a director terminates before you reach the designated early retirement age, you will not be able to continue as a retiree participant in the Plan after such termination. In such case, your participation in the Plan will terminate on the same date that your employment or service terminates, and your account will be closed as soon as practicable thereafter.
For those advisory directors who are participating in the Plan when their service as an advisory director terminates, such termination of service will automatically result in simultaneous termination of their participation in the Plan, regardless of their age at the time.
If your participation in the Plan should terminate involuntarily (e.g., upon termination of employment or service prior to attaining early retirement age), you will have the same three options available to you for distribution of your Plan account assets as would be available if you were to voluntarily terminate your participation. The three options are described in Question 19 below. You may indicate your choice among these options on an account distribution form obtained from the Administrative Agent. If the account is a joint account, the choice of an option for distribution of your account assets must be approved by all co-owner(s) of the account.tax advisor
regarding the consequences of participation in the Plan. No information is provided with respect to state, local or foreign tax consequences of participation in the Plan.
Reinvested Dividends
In the case of shares (including any fractional share) purchased by the Plan Administrator in open market transactions using cash dividends received by the Plan Administrator with respect to your Plan shares, you will be treated, for Federal income tax purposes, as having received a distribution equal to the amount of such cash dividends, plus the amount of any brokerage fees paid by us in connection with those purchases.
In the case of shares (including any fractional share) purchased by the Plan Administrator directly from Arrow using cash dividends received by the Plan Administrator with respect to your Plan shares, you will be treated, for Federal income tax purposes, as having received a distribution equal tothe fair market value of such shares on the date of purchase. Generally, this will be identical or similar to the amount of cash dividends that you would have received on such shares if you were not participating in the Plan.
If you participate in the optional cash contribution feature of the Plan under which the Plan Administrator buys shares on the open market with recurring or non-recurring cash contributions received directly from you or on your behalf, you will not be treated, for Federal income tax purposes, as having received any distribution from us with respect to the shares purchased for your account, other than with respect to the amount of brokerage fees paid by Arrow on your behalf in connection with those purchases.
Any other distributions of cash or property received by you under the Plan with respect to shares held in your Plan account will be taxable as dividends to the extent of our current or accumulated earnings and profits. To the extent the distributions are in excess of our current or accumulated earnings and profits, the excess portion will be treated first as a tax-free return of capital, reducing the tax basis in your shares, and to the extent in excess of your tax basis will be taxable as gain realized from the sale of your shares. In addition, if we designate part or all of our distributions as capital gain dividends, those designated amounts will be treated by you as long-term capital gains.
Plan Costs and Fees
As noted above, brokerage commissions, if any, incurred by Arrow on your behalf and on the behalf of other Plan participants in connection with the purchases or sales by the Plan Administrator of shares on the open market, will be reported as additional taxable income to you and the other Plan participants on a pro rata basis, based on each individual participant's pro rata share of the brokerage commissions for net purchases or sales on any given day.
Contribution or Withdrawal of Shares
You will not realize gain or loss for U.S. Federal income tax purposes upon your election to participate in the Plan. In addition, (i) your record transfer of any shares owned by you to American Stock Transfer and Trust Company, LLC, as custodian of the Plan, at any time, (ii) your election to terminate participation in the Plan of some or all of the shares previously participating (assuming you do not elect to have the Plan custodian sell any such shares), or (iii) your election to have the Plan custodian distribute stock certificates (or evidence of book-entry share ownership) to you representing some or all of your shares that are participating in the Plan, will not, in any such case, result in your realization of any gain or loss for U.S. Federal income tax purposes.
Sale of Plan Shares; Tax Basis, Holding Period
Generally, you will realize gain or loss upon the sale of your shares (including the receipt of cash for fractional shares) held in your Plan account. Your tax basis in any shares acquired on your behalf through the Plan, either with reinvested dividends or through optional cash contributions, will generally equal the total amount of distributions you are treated as having received for Federal income tax purposes as described above with respect to such shares. The holding period for determining whether you have long-term or short-term capital gain or loss upon a subsequent sale of shares purchased under the Plan commences on the date following the date the shares are purchased on your behalf.
Backup Withholding
In general, dividends on your shares (including any discounts treated as dividends) and proceeds from the sale of your shares held in the Plan generally will be subject to backup withholding at the applicable rate specified by the IRS, unless you provide a properly completed IRS Form W-9 (if you are a U.S. person) to the Plan Administrator or otherwise establish an exemption. If you have not provided an IRS Form W-9 to the Plan Administrator, you may obtain one from the Plan Administrator. A non-U.S. person may have to comply with certification procedures to establish that he or she is not a United States person in order to avoid backup withholding. Any amount withheld as backup withholding will be allowable as a refund or credit against your U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.
Closing of Account and Distribution of Assets
19.What happens when my account is closed? How are account assets distributed?AVAILABLE INFORMATION
When your participation in the Plan terminates and your account is closed, the assets in the account will be distributed in one of three ways, as selected by you in writing on an account distribution form obtained from the Administrative Agent. The three options are as follows:Arrow Filings
(1) Distribution of Shares. If you select this option,Arrow files annual, quarterly and special reports, proxy statements and other information with the Administrative AgentSEC. You may read and copy any such reports, statements or its representative or agent will (i) deliverother information at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at l-800-SEC-0330 for further information on the public reference room. Arrow's SEC filings are also available to you orthe public on your behalf one or more stock certificates for all of the whole shares of Common Stock in your Plan account, and (ii) sell on your behalf any fraction of a share in your Plan account and remit to you the net proceeds.SEC internet site at http://www.sec.gov.
(2) Sale of Shares and Distribution of Proceeds. If you select this option, the Administrative Agent or its representatives or agents will sell on your behalf all of the whole shares and any fraction of a share in your account and remit to you a check in the amount of the net proceeds. If you are a Company insider or affiliate, there are special restrictions on your ability to sell Plan shares. See Question 21.Incorporated Documents
(3) Transfer of AccountArrow is permitted to Automatic Dividend Reinvestment Plan. If“incorporate by reference” into this Prospectus certain information Arrow files with the SEC. This means we disclose important information to you select this option,by referring you to various other documents filed by us with the Administrative Agent will transfer all of the whole shares and any fraction of a share in your Plan account to an account in your nameSEC, both documents filed in the Company’s DRIP. If you already have a DRIP account in your name, the shares willpast and documents to be transferred to that account; otherwise, a new account will be opened in your name.
Note: If you do not submit a properly executed or completed account distribution form to the Administrative Agent on a timely basis, the account assets will be distributed in accordance with option (1), above.
If the Administrative Agent or its brokers or agents sell any whole or fractional shares in your account in connection with closing your account, the sale will occur in connection with the Administrative Agent’s next regularly scheduled sale of shares for accountholders. Currently, such sales are scheduled to occur every month on the 20th day of the month (or if such is not a trading day, on the next trading day thereafter), and cover all sale requests received by the Administrative Agent on or before 12:00 noon, local time, on the 15th day of the month. After the sale, the Administrative Agent will promptly send you a checkfiled in the amount of the proceeds from the sale, less applicable brokerage commissions and transfer taxes, if any.
If your accountfuture. The information incorporated by reference is a joint account, the account distribution form submitted to the Administrative Agent specifying how the account assets should be distributed must be executed by you and each co-owner of the account. Regardless of the option selected, the assets distributed out of a joint account will be in the name of you and the co-owner or co-owners of the account jointly, unless the distribution form specifies otherwise. Thus, if shares areconsidered to be distributed (Option 1), the shares will be registered in the name of you and all co-owners jointly, unless your form specifies otherwise. Similarly, if the account shares are to be sold and the proceeds distributed (Option 2), the check will be made payable to you and the co-owner or co-owners jointly, unless otherwise specified on the form. Under Option 3 (transfer of account shares to the Company’s DRIP), the shares will be deposited in a joint account under the DRIP in the names of you and all other co-owners, unless the form specifies otherwise.
20.What happens to your Plan account when you die?
If your account is solely owned, you may designate a person or persons as beneficiary to receive your account assets in the event of your death. The beneficiary may be selected by you in writing on a prescribed form obtained from the Administrative Agent. If you fail to designate effectively a beneficiary, your estate will be deemed to be the beneficiary of your account assets. See Question 11 for the effect of death on ownership of assets held in a joint account.
If your account is jointly owned, your account assets (i.e,. the shares in your account) will be distributed to your co-owner(s) in the event of your death. If there is more than one co-owner, the shares will be registered in the names of the surviving co-owners jointly, unless you have specified some other form of ownership in your account distribution form.
Resales of Shares Acquired Under the Plan
21.If I am a Company insider or affiliate, are there any special restrictions on my ability to participate in the Plan, change the level of my participation, or sell my Plan shares?
If you are a Company insider subject to Section 16 of the Exchange Act (i.e., you are a director or executive officer of the Company), you may be subject to special restrictions and procedures applicable to your participation in the Plan. You should contact the Administrative Agent to coordinate your participation in the Plan including enrolling in the Plan, modifying your level of participation in the Plan, selling shares from your Plan account, withdrawing shares from your Plan account and terminating your participation in the Plan.
Additionally, if you are an “affiliate” of the Company within the meaning of the securities laws (i.e., a controlling person), you will also be subject to limitations on your resale of shares of Common Stock. The issue of who qualifies as an “affiliate” of the Company and what restrictions apply to resales by affiliates is discussed in Question 22, below.
If you are not an “affiliate” of the Company and have not been an “affiliate” in the preceding three months, either you or the Administrative Agent or its brokers or agents acting on your behalf may resell any shares acquired on your behalf under the Plan without registration under the Securities Act or reliance upon any special exemption from registration. In other words, as a non-affiliate, you generally will not be subject to any restrictions under the registration provisions of the Federal securities laws on the resale of your Plan shares.
22.Who are Company “affiliates” and what resale restrictions will apply to them?
The term “affiliates” is defined under the Federal securities laws to include individuals who directly or indirectly, through one or more intermediaries, control the Company, such as by participating in or controlling the Company’s management. Due to the broad meaning given the term “affiliates” under these laws, any director or executive officer of the Company may assume that he or she is an affiliate of the Company and should consult with counsel before selling shares acquired by such person under the Plan.
Affiliates of the Company may resell shares of Common Stock received by them under the Plan only (i) in transactions registered under the Securities Act, (ii) in reliance upon and in compliance with applicable provisions of Rule 144 under the Securities Act, which exempts from registration some resales of securities, or (iii) in reliance upon some other exemption from the registration requirements of the Securities Act. The Company has neither any obligation nor any present intention to prepare and file a special registration statement under the Securities Act for resales by affiliates of shares received by them under the Plan, and such a registration statement would be necessary before an affiliate could resell shares in a registered transaction. Whether Rule 144 or some other exemption from the registration requirements of the Securities Act is available for a resale of shares by an affiliate is a complicated question that depends upon the particular circumstances in each individual case.
Most affiliates of the Company also are Company insiders subject to Section 16 of the Exchange Act. See Question 21, above.
U.S. Federal Income Tax Consideration
23.What are the Federal tax consequences of my participation in the Plan?
Generally, you as a Plan participant will be required to recognize and report, as income, the amount by which the purchase price for shares purchased on your behalf under the Plan is less than the market price for those shares on the date of each purchase. For example, if the applicable discount for purchases under the Plan is 5% and you purchase two shares when the market price is $20.00 per share (i.e., you pay $19.00 per share), you will receive shares having a total market value of $40.00 for a total purchase price of $38.00. The difference, a total of $2.00, will be taxable income to you at the time the shares are acquired for your account, and will be subject to applicable withholding taxes if you are an employee. The taxable income will be recognized by you, the participant, even if the shares acquired with your contributions are placed in a joint account under the Plan.
The tax basis of accountholders in shares purchased for their accounts under the Plan will be equal to the purchase price paid for such shares plus the amount of income recognized by the participant in connection with the purchase. Thus, in the example above, your tax basis in the two shares purchased would be $20.00 per share, that is, the sum of the purchase price ($19.00 per share) plus the discount ($1.00 per share, which is recognized as taxable income).
The holding period for shares purchased on behalf of an accountholder under the Plan will begin on the date the Administrative Agent purchases those shares and enters them in the holder’s Plan account. This date will be identified on account statements. As an accountholder, your holding period is not affected by the date the shares may be distributed to you and any co-owners by the Administrative Agent out of your Plan account.
Upon any resale by accountholders or by the Administrative Agent or its brokers or agents on behalf of accountholders of shares acquired for their accounts through the Plan, any gain or loss realized by such holders will be treated as gain or loss in connection with the sale or exchange of a capital asset. Generally, long term capital gain (i.e., gain recognized on assets that have been held by a taxpayer for more than one year) is taxed at a lower tax rate than ordinary income.
If an account is a joint account, the distribution of account assets to a co-owner, who is not the Plan participant, is generally treated, for Federal estate and gift tax purposes, as a gift from the Plan participant to the co-owner at the time the distribution to the co-owner is complete. Generally, there are no estate and gift tax consequences for transfers of jointly held assets between spouses.
Tax consequences may vary depending upon individual circumstances. You are advised to consult with your personal tax advisers regarding the particular Federal income tax consequences to you of your participation in the Plan, your purchase of shares through the Plan and your sale of those shares. You also should consult with your advisers regarding the tax consequences to you, if any, under state or local tax laws.
COMPANY INFORMATION
24.What is the Company’s business?
The Company is a bank holding company principally engaged in the business of owning, supervising and controlling its banking subsidiaries. As of the datepart of this Prospectus, it owns two nationally chartered banks in New York: Glens Falls National Bank and Trust Company, headquartered in Glens Falls,later information filed with the SEC that also is incorporated by reference herein will update and Saratoga National Bank and Trust Company, located in Saratoga Springs. Our principal executive office is located at 250 Glen Street, Glens Falls, New York 12801 and our telephone number is 518-745-1000.
supersede the information incorporated by reference. The Company’s banks serve their home towns anddocuments listed below filed by us with the communities in Northeastern New York State through an extensive network of branch offices. The banks offer electronic banking services, including online and mobile banking, as well as automated teller machines. The banks provide a broad range of financial products, such as mortgages, consumer and commercial loans, a full array of demand and time deposit account products, and wealth management and other financial services.
25.What additional information about the Company is available?
The Company is subject to the informational requirementsSEC under Section 13(a), 13(c), 14, or 15(d) of the Exchange Act, and accordingly files extensive information with the SEC. Filedfuture filings of similar documents include annual and quarterly reports, proxy statements and press releases.
The following information filed by the Companyus with the SEC underfiled (i) after the Exchange Act isdate of the initial registration statement and prior to the effectiveness of the registration statement, and (ii) after effectiveness of the registration statement and prior to the termination of the offering, comprise the incorporated by reference in this Prospectus:documents:
(a) Our Annual Report on Form 10-K for our fiscal year ended December 31, 2019,2021, filed on February 28, 2020;March 11, 2022;
(b) Our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2020, filed on May 7, 2020, and the quarter ended June 30, 2020, filed on August 6, 2020;
(c) Our Current Reports on Form 8-K filed on January 27, 2022, February 1, 2022 and February 28, 2020, February 3, 2020, April 23, 2020, April 24, 2020, April 30, 2020, May 7, 2020, July 21, 2020 and July 31, 20202022 (except, in any such case, the portions furnished and not filed pursuant to Item 2.02, Item 7.01 or otherwise); and
(c) The description of theour Common Stock, of the Company$1.00 par value per share, as contained in the registration statementour Registration Statement on Form 8-A filed by the Company undereffective pursuant to Section 12 of the Exchange Act, including any amendments or reports filed for the purpose of updating such description.
In addition, we hereby incorporate by reference any future filings filed by the Company with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (i) after the date of the initial registration statement and prior to effectiveness of the registration statement and (ii) after effectiveness of the registration statement and prior to the termination of the offering of the securities covered by this Prospectus (other than current reports or portions thereof furnished under Item 2.02 or Item 7.01 of Form 8-K).
At your request, we will send you a copy, at no charge, of any or all of these incorporated documents. Written requests should be directed to Investor Relations, Arrow Financial Corporation, 250 Glen Street, Glens Falls, New York 12801. Telephone requests for copies may be directed to (518) 745-1000, Ext. 307,4307, Investor Relations. The Company’s SEC filings are also available to the public on the SEC internet site at http://www.sec.gov.
The shares of Common Stock are traded on the NasdaqGS Market. The ticker symbol is AROW.
USE OF PROCEEDS
26.What will the Company do with the proceeds of sales of shares under the Plan?
Arrow is unable to predict the number of shares of Common Stock that will be purchased under the Plan from Arrow or the prices at which any such shares will be purchased from it. Any proceeds realized from the sale of shares under the Plan will be used by the Company for general corporate purposes.
DISCONTINUATION/AMENDMENTS TO THE PLAN
27.May the Company discontinue or change the Plan?
The Plan will expire on August 15, 2021, the tenth anniversary of its effective date. However, the Company reserves the right to terminate the Plan at any time. If so, you will have the same options for closing your Plan account as if you had elected individually to terminate your participation. See Question 19 above.
The Board may amend the Plan from time to time in its discretion; provided, however, that any such amendment requiring the approval of shareholders of the Company under applicable law or regulation will not become effective unless and until such shareholder approval has been obtained. No such amendment may materially impair the rights of any participants to shares already acquired by them under the Plan.
PLAN OF DISTRIBUTION
Shares of our Common Stock purchased by the Administrative Agent on behalf of the participants under the Plan will be purchased directly from Arrow, consistent with the procedures and subject to the limitations described in this Prospectus. See Question 9. Plan participants for whose accounts such shares are acquired may resell such shares either in market transactions (including coverage of short positions) on any national securities exchange on which shares of our Common Stock trade or in privately negotiated transactions, without restriction under the Securities Act except for any such participants who may also be deemed to be an affiliate of Arrow or underwriters with respect to their purchase and sale of such shares. See Questions 21 and 22. Our common stock is currently listed on NasdaqGS under the ticker symbol AROW.
You will not be charged for the cost of opening and maintaining your Plan account. You will not be charged any brokerage commissions or fees for purchases of shares on your behalf under the Plan. You will not be charged any fees for withdrawing shares from your Plan account or for the distribution of shares to you when your account is closed.
However, if the Administrative Agent or its representatives sell any shares held in your Plan account into the market, as you may direct from time to time, while your participation continues or upon the closing of your account when your participation terminates, any brokerage commissions or transfer taxes paid in connection with the sales will be deducted from the sale proceeds before they are distributed to you and any co-owners. No administrative fees will be charged. See Question 9.
Legal Matters
This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any of our Common Stock or other securities in any state or any other jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction.
LEGAL MATTERS
Certain legal matters relating to the Plan and this Prospectus have been reviewed for the CompanyArrow by the law firm of Thompson Coburn LLP.
Experts
EXPERTS
The consolidated financial statements of Arrow as of December 31, 20192021 and 2018,2020, and for each of the years in the three-year period ended December 31, 2019,2021, and management’smanagement's assessment of the effectiveness of internal control over financial reporting as of December 31, 2019,2021, have been incorporated by reference herein and in the registration statement, in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
With respect to the unaudited interim consolidated financial information for the periods ended March 31, 2020 and 2019, and June 30, 2020 and 2019, incorporated by reference herein, the independent registered public accounting firm has reported that they applied limited procedures in accordance with professional standards for a review of such information. However, their separate report included in Arrow’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, and June 30, 2020 and incorporated by reference herein, states that they did not audit and they do not express an opinion on that interim consolidated financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. The accountants are not subject to the liability provisions of Section 11 of the Securities Act for their report on the unaudited interim consolidated financial information because that report is not a “report” or a “part” of the registration statement prepared or certified by the accountants within the meaning of Sections 7 and 11 of the Securities Act.
* * * * *
Part II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
| | | | | | | | |
| | |
| SEC Registration Fee | $ | —710.29 | |
| Legal Fees and Expenses | $ | 12,00012,000.00 | |
| Accounting Fees and Expenses | $ | 8,5008,500.00 | |
| Plan Administrator Fees and Expenses | $ | — | |
| Printing and Mailing Expenses | $ | 1,0001,000.00 | |
| Miscellaneous | $ | — | |
| Total Expenses | $ | 21,50022,210.29 | |
Item 15. Indemnification of Directors and Officers.
Sections 721-726 of the New York Business Corporation Law generally provide for or permit a corporation to indemnify the directors and officers against liabilities they may incur in such capacities provided certain standards are met, including good faith and the reasonable belief that the particular action was in, or not opposed to, the best interests of the corporation.
The Registrant's Certificate of Incorporation provides that directors and officers of the Registrant shall be indemnified, to the fullest extent permitted by the Business Corporation Law, against judgments, fines, amounts paid in settlement and reasonable expenses (including attorneys' fees) incurred by them in connection with actions to which they are, or are threatened to be made, parties. If a director or officer is not successful in the defense of an action, he or she is entitled to indemnification, under the Registrant's Certificate of Incorporation and the relevant provisions of law, if ordered by a court or if the Board of Directors, acting by a majority vote of a quorum of disinterested directors or upon the written opinion of independent legal counsel, determines that the director or officer acted in good faith for a purpose which he or she reasonably believed to be in the best interests of the Registrant, and, in criminal actions, had no reasonable cause to believe his or her conduct was unlawful. In connection with actions by or in the right of the Registrant (derivative suits) as to which the director or officer is not successful, indemnification is permitted for expenses and amounts paid in settlement only if and to the extent that a court of competent jurisdiction deems proper, and indemnification for adverse judgments is not permitted.
Under the Registrant's Certificate of Incorporation and applicable provisions of law, the Board of Directors or the Registrant may advance expenses to a director or officer before final disposition of an action or proceeding upon receipt of an undertaking by the director or officer to repay the amount advanced if he or she is ultimately found not to be entitled to indemnification with respect thereto.
The Registrant's Certificate of Incorporation also provides that to the fullest extent permitted by law, subject only to the express prohibitions on limitation of liability set forth in Section 402(b) of the Business Corporation Law, a director of the Registrant shall not be liable to the Registrant or its shareholders for monetary damages for any breach of duty as a director.
Pursuant to policies of directors' and officers' liability insurance, the directors and officers of the Registrant and its subsidiary banks are insured, subject to the limits, exceptions and other terms and conditions of such policy, against liability for claims made against them for any actual or alleged error or misstatement or misleading statement or act or omission or neglect or breach of duty while acting in their individual or collective capacities as directors or officers of such entities.
Item 16. Exhibits.
See the Exhibit Index attached to this registration statement and incorporated herein by reference.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20%20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’sregistrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’splan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934)Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Glens Falls, State of New York, on August 10, 2020.March 24, 2022.
ARROW FINANCIAL CORPORATION
By: /s/ Thomas J. Murphy
Thomas J. Murphy
President and Chief Executive Officer
We, the undersigned officers and directors of Arrow Financial Corporation, hereby severally and individually constitute and appoint Thomas J. Murphy and Edward J. Campanella and each of them, the true and lawful attorneys and agents of each of us to execute in the name, place and stead of each of us (individually and in any capacity stated below) any and all amendments (including post-effective amendments) to this Registration Statement on Form S-3 and all instruments necessary or advisable in connection therewith and to file the same with the Securities and Exchange Commission, each of said attorneys and agents to have the power to act with or without the other and to have full power and authority to do and perform in the name and on behalf of each of the undersigned every act whatsoever necessary or advisable to be done in the premises as fully and to all intents and purposes as any of the undersigned might or could do in person, and we hereby ratify and confirm our signatures as they may be signed by our said attorneys and agents and each of them to any and all such amendments and instruments.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.