Ryan Specialty’s amended and restated certificate of incorporation authorizes the issuance of up to 1,000,000,000 shares of Class A common stock, 1,000,000,000 shares of Class B common stock, 10,000,000 shares of Class X common stock, and 500,000,000 shares of preferred stock, each having a par value of $0.001 per share.

The New LLC Operating Agreement requires that the Company and the LLC at all times maintain a one-to-one ratio between the number of shares of Class A common stock issued by the Company and the number of LLC Common Units owned by the Company, except as otherwise determined by the Company.

Class A and Class B Common Stock

Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is initially entitled to 10 votes per share but, upon the occurrence of certain events as set forth in the Company’s amended and restated certificate of incorporation, will be entitled to one vote per share in the future. All holders of Class A common stock and Class B common stock vote together as a single class except as otherwise required by applicable law or our amended and restated certificate of incorporation. Holders of Class B common stock do not have any right to receive dividends or distributions upon the liquidation or winding up of the Company.

In accordance with the New LLC Operating Agreement, the LLC Unitholders are entitled to exchange LLC Common Units for shares of Class A common stock or, at the Company’s election, for cash from a substantially concurrent public offering or private sale (based on the price of our Class A common stock in such public offering or private sale). The LLC Unitholders are also required to deliver to the Company an equivalent number of shares of Class B common stock to effectuate such an exchange. Any shares of Class B common stock so delivered will be canceled. Shares of Class B common stock are not issued for Class C Incentive Units that are exchanged for LLC Common Units as these LLC Common Units are immediately exchanged for Class A common stock as discussed in Note 9, Equity-Based Compensation.

Class X Common Stock

There were no shares of Class X common stock outstanding as of March 31, 2024 or December 31, 2023. Shares of Class X common stock have no economic, voting, or dividend rights.

Preferred Stock

There were no shares of preferred stock outstanding as of March 31, 2024 or December 31, 2023. Under the terms of the amended and restated certificate of incorporation, the Board is authorized to direct the Company to issue shares of preferred stock in one or more series without stockholder approval. The Board has the discretion to determine the rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

Dividends

During the three months ended March 31, 2024, the Company’s Board of Directors declared a one-time special cash dividend of $0.23 per share and initiated a regular quarterly cash dividend of $0.11 per share on the Company’s outstanding Class A common stock.

During the three months ended March 31, 2024, $40.0 million of dividends, consisting of $27.1 million related to the special dividend and $12.9 million related to the regular quarterly dividend, was paid on Class A common stock.

Non-controlling Interests

The Company is the sole managing member of the LLC. As a result, the Company consolidates the LLC in its consolidated financial statements, resulting in non-controlling interests related to the LLC Common Units not held by the Company. As of March 31, 2024 and December 31, 2023, the Company owned 45.6% of the economic interests in the LLC, while the non-controlling interest holders owned the remaining 54.4% of the economic interests in the LLC.

Weighted average ownership percentages for the applicable reporting periods are used to attribute net income (loss) and other comprehensive income (loss) to the Company and the non-controlling interest holders. The non-controlling interest holders’ weighted average ownership percentage was 54.9% and 57.0% for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2024, the Company initiated a regular quarterly cash distribution of $0.04 per unit on the LLC’s outstanding LLC Common Units. During the three months ended March 31, 2024, $5.6 million in distributions was paid to the non-controlling interest holders of the LLC Common Units.