EX-2.8 7 exhibit28.htm EX-2.8
DESCRIPTION OF THE REGISTRANT'S SECURITIES REGISTERED PURSUANT
TO SECTION 12
OF THE SECURITIES EXCHANGE ACT OF 1934
As of December
31, 2024, Diana
Shipping Inc. (the
“Company”) had five classes
of securities registered under
Section
12 of the Securities Exchange Act of 1934, as amended:
1)
Common stock, $0.01 par value (the “common shares”) ;
2)
Preferred stock purchase rights (the “Preferred Stock Purchase Rights”) ;
3)
Series C Preferred Shares;
4)
Series D Preferred Shares;
5)
8.875% Series B Cumulative Redeemable Perpetual Preferred Shares, $0.01 par value (the “Series Preferred
Shares”); and
6)
Warrants to purchase common stock. The following description
sets forth certain material
provisions of these
securities. The following
summary does
not purport to
be complete and
is subject to,
and is qualified
in its
entirety by reference to, the applicable provisions of
(i)
the
Company’s
Amended
and
Restated
Articles
of
Incorporation,
as
amended
(the
“Articles
of
Incorporation”) and
(ii)
the
Company’s
Amended
and
Restated
Bylaws
(the
“Bylaws”),
each
of
which
is
incorporated
by
reference as an exhibit to the Annual Report on Form 20-F of
which this Exhibit is a part. We encourage you
to refer to our
Articles of Incorporation and Bylaws
for additional information. Please note in
this description
of securities, “we”,
“us”, “our” and
“the Company” all
refer to Diana
Shipping. and its
subsidiaries, unless
the context requires otherwise.
DESCRIPTION OF COMMON SHARES
The respective number of common shares issued and outstanding as of the last day of the fiscal year for annual report
on Form 20-F to which this description is
attached or incorporated by reference as an exhibit, is
provided on the cover
page of such annual report on Form 20-
F.
Each
outstanding
share
of
common
stock
entitles
the
holder
to
one
vote
on
all
matters
submitted
to
a
vote
of
stockholders.
Subject to
preferences that
may
be applicable
to any
outstanding
shares of
preferred
stockholders
of
shares of common stock
are entitled to receive ratably
all dividends, if any,
declared by our board of
directors out of
funds legally available
for dividends. Upon
our dissolution or
liquidation or the
sale of all
or substantially all
of our
assets, after payment in full of all
amounts required to be paid to creditors and to
the holders of preferred stock having
liquidation
preferences,
if any,
the holders
of our
common stock
will be
entitled to
receive pro
rata our
remaining
assets available for
distribution. Holders of
common stock do
not have conversion,
redemption or
preemptive rights
to subscribe to any of our securities. The rights, preferences and privileges of holders of common stock are subject to
the rights of the holders of our preferred stock.
Voting
Rights
Each outstanding common share entitles
the holder to one vote on
all matters submitted to a vote
of shareholders. At
any annual or
special general meeting
of shareholders where
there is a quorum,
the affirmative vote
of a majority
of
the votes cast by holders of shares of stock represented at the meeting shall be
the act of the shareholders. (Under the
Bylaws, at all meetings
of shareholders except otherwise
expressly provided by law,
there must be present
in person
or proxy shareholders
of record holding
at least 33
1/3% of the
shares issued and
outstanding and entitled
to vote at
such meeting in order to constitute a quorum.)
Our Bylaws do not confer any conversion, redemption or preemptive rights
attached to our common shares.
Dividend Rights
Subject
to
preferences
that
may
be
applicable
to
any
outstanding
preferred
shares,
holders
of
common
shares
are
entitled to
receive ratably
all dividends,
if any,
declared by
our board
of directors
out of
funds legally
available for
dividends.
Liquidation Rights
Upon
our
dissolution
or
liquidation
or
the
sale of
all or
substantially
all of
our
assets, after
payment
in
full
of
all
amounts required
to be paid
to creditors and
to the holders
of our preferred
shares having liquidation
preferences, if
any,
the
holders
of
our
common
shares
will
be
entitled
to
receive
pro
rata
our
remaining
assets
available
for
distribution.
Variation
of Rights
Generally,
the rights
or privileges
attached
to our
common shares
may
be varied
or abrogated
by the
rights of
the
holders of
our preferred
shares, including
our existing
classes of
preferred shares
and any
preferred shares
we may
issue in the future.
Limitations on Ownership
Under Marshall Islands law generally,
there are no limitations on the right of non-residents of the Marshall Islands or
owners who are not citizens of the Marshall Islands to hold or vote our common
shares.
Anti-takeover Effect of Certain Provisions of our Amended and
Restated Articles of In Company and Bylaws
Several provisions of our amended and restated articles of incorporation
and bylaws may have anti-takeover effects.
These provisions, which are summarized below, are intended to avoid costly takeover battles, lessen our vulnerability
to
a
hostile
change
of
control
and
enhance
the
ability
of
our
board
of
directors
to
maximize
stockholder
value
in
connection with
any unsolicited
offer to
acquire us.
However,
these anti-takeover
provisions could
also discourage,
delay or prevent (I) the
merger or acquisition of
our company by means
of tender offer,
a proxy contest or otherwise
that a stockholder may consider in its best interest and (ii) the removal of
incumbent officers and directors.
Business Combinations
Our amended
and restated
articles of
incorporation generally
prohibit us
from entering
into a
business combination
with an
"interested shareholder" for
a period
of three
years following the
date on
which the
person became an
interested
shareholder.
Interested shareholder
is defined,
with certain
exceptions, as
a person
who (i)
owns more
than 15%
of
our
outstanding
voting
stock, or
(ii) is
an affiliate
or associate
of
the Company
that owned
more
than
15% of
our
outstanding stock at any
time in the prior three
years from the date the
determination is being made
as to whether he
or she is an interested shareholder.
This
prohibition
does
not
apply
in
certain
circumstances
such
as
if
(i)
prior
to
the
person
becoming
an
interested
shareholder, our board of directors approved the business combination
or the transaction which resulted in the person
becoming an interested shareholder, or (ii) the person became an interested shareholder
prior to the Company's initial
public offering.
Blank Check Preferred
Stock
Under the
terms of our
amended and
restated articles
of incorporation,
our board
of directors has
authority,
without
any further
vote or action
by our stockholders,
to issue up
to 25,000,000
shares of blank
check preferred
stock. Our
board of directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of
control of our company or the removal of our management.
Classified Board of Directors
Our amended and restated articles of incorporation provide for the division of our board of directors into three classes
of directors, with each
class as nearly equal
in number as
possible, serving staggered, three-year terms. Approximately
one-third of our board of directors is elected each year.
This classified board provision could discourage a third party
from making a tender
offer for our
shares or attempting to
obtain control of us.
It could also delay
stockholders who
do not
agree with
the policies
of our
board of
directors from
removing a
majority of
our board
of directors
for two
years.
Election and Removal of Directors
Our
amended
and
restated
articles
of
incorporation
prohibit
cumulative
voting
in
the
election
of
directors.
Our
amended
and
restated
bylaws
require
parties
other
than
the
board
of
directors
to
give
advance
written
notice
of
nominations
for the
election of
directors.
Our amended
and restated
articles of
incorporation
also provide
that our
directors may be removed only for cause and only upon the
affirmative vote of a majority of the outstanding shares of
our capital stock
entitled to vote
for those directors.
These provisions may
discourage, delay or
prevent the removal
of incumbent officers and directors. The Articles prohibit the use
of cumulative voting to elect Directors.
Limited Actions by Stockholders
Our amended and restated articles of incorporation and bylaws provide that special meetings of the shareholders may
be
called by
the Board
of Directors
who
shall
state the
purpose
or purposes
of the
proposed
special
meeting.
The
business transacted at any special
meeting shall be limited to
the purposes stated in the
notice of such meeting. If there
is a failure
to hold the
annual meeting within
a period of
ninety (90) days
after the date
designated therefor,
or if no
date has been designated for a period of thirteen (13) months after
the organization of the Corporation or after
its last
annual
meeting, holders
of not
less than
one-fifth
of the
shares entitled
to vote
in an
election
of directors
may,
in
writing, demand the call of a special
meeting in lieu of the annual
meeting specifying the time thereof, which shall
not
be less than two (2) nor more than three(3) months from the date of such call.
The Chairman, Chief Executive Officer
or Secretary of
the Corporation upon
receiving the written
demand shall promptly
give notice of
such meeting, or
if
the
Chairman,
Chief
Executive
Officer
or
Secretary
fails
to
do
so
within
five
(5)
business
days
thereafter,
any
shareholder signing such
demand may give
such notice. Such
notice shall state
the purpose or
purposes of the
proposed
special meeting.
The business transacted at any special meeting shall be limited to the purposes stated in the notice of
such meeting.
Advance Notice Requirements for Stockholder
Proposals and Director Nominations
Our amended and
restated bylaws provide
that stockholders seeking
to nominate candidates
for election as
directors
or to bring business before an annual
meeting of stockholders must provide
timely notice of their proposal in
writing
to the corporate
secretary.
Generally,
to be timely,
a stockholder's notice must
be received at our
principal executive
offices not
less than 90
days nor
more than 120
days prior to
the date on
which we first
mailed our
proxy materials
for
the
preceding
year's
annual
meeting.
Our
bylaws
also
specify
requirements
as
to
the
form
and
content
of
a
stockholder's notice. These provisions may impede
stockholders' ability to bring matters before an annual meeting
of
stockholders or make nominations for directors at annual meeting
of stockholders.
DESCRIPTION OF THE SERIES B PREFERRED SHARES
On
February
3,
2014,
we
filed
a
Prospectus
Statement
for
the
registration
of
2,400,000
of
our
8.875%
Series
Cumulative Redeemable Perpetual Preferred Shares,
par value $0.01
per share, with
a liquidation preference of
$25.00
per share.
We have
summarized the material terms
and conditions of the
rights of these Series B
Preferred Shares below.
For a
complete
description
of
the
rights,
we
encourage
you
to
read
the
“Description
of
Registrant’s
Securities
to
be
Registered”, which we have filed as an exhibit to the Form 8-A on February 13,
2014.
Dividends
Under the
Agreement, we declared
a dividend payment
of 8.875%
per annum
per $25.00 liquidation
preference per
share (equal to $2.21875 per annum per share). These dividends accrue and are cumulative from the date the Series B
Cumulative shares
are originally
issued. The
dividends are
payable, as
and if
declared by
the Board
on January
15,
April 15, July 15 and October 15 of each year.
Liquidation Preference
Holders of the
Series B Preferred Shares
are entitled to a
liquidation preference. Upon
the occurrence of
liquidation,
dissolution or
winding up
of the affairs
of the
Company,
whether voluntary
or involuntary
(a “Liquidation
Event”),
Holders of Series B Preferred Shares shall be entitled to receive out of the assets of
the Company or proceeds thereof
legally
available
for
distribution
to
stockholders
of
the
Company,
(I)
aftersatisfaction
of
all
liabilities,
if
any,
to
creditors of the
Company,
(ii) after all
applicable distributions
of such assets
or proceeds being
made to or
set aside
for the holders of any Senior Stock
then outstanding in respect of such Liquidation
Event, (iii) concurrently with any
applicable
distributions
of such
assets or
proceeds
being made
to or
set aside
for holders
of any
Parity Stock
then
outstanding in
respect of such
Liquidation Event
and (iv) before
any distribution of
such assets or
proceeds is
made
to or set aside for the holders of Common Stock and any
other classes or series of Junior Stock as to such distribution,
a liquidating distribution or payment in full redemption of such Series B Preferred Shares in an amount initially equal
to $25.00 per
share in cash, plus
an amount equal
to accumulated and
unpaid dividends thereon
to the date
fixed for
payment of such amount (whether or not declared).
Voting
Rights
In
the
event
that six
quarterly
dividends,
whether
consecutive
or
not,
payable
on
the
Series B
Preferred
Shares
in
arrears, the
Holders of
Series B Preferred
Shares shall
have the
right, voting
as a
class together
with holders
of any
Parity Stock upon
which like voting
rights have been
conferred and are
exercisable, at the
next meeting of
stockholders
called for the
election of directors,
to elect one
member of the
Board of Directors,
and the size
of the Board
of Directors
shall be increased as needed to accommodate such change.
Unless the Company
shall have received
the affirmative
vote or consents
of the Holders
of at least
two-thirds of the
outstanding
Series B
Preferred
Shares, voting
as a
single class,
the Company
may
not adopt
an amendment
to the
Articles of Incorporation that adversely alters the preferences, powers or
rights of the Series B Preferred Shares.
Unless the
Company shall
have received
the affirmative
vote or
consent of
the Holders
of at
least two-thirds
of the
outstanding Series
B Preferred Shares,
voting as a
class together with
holders of any
other Parity
Stock upon
which
like voting
rights have
been conferred
and are
exercisable, the
Company
may not
(x) issue
any Parity
Stock if
the
cumulative dividends payable on outstanding Series B Preferred Shares are in arrears or(y) create or
issue any Senior
Stock.
Redemption Rights
The Company shall have the right at any time on or after February 14, 2019, to redeem the Series B Preferred Shares,
in whole or from time to time in part, from any funds available for such purpose. Any such redemption shall occur on
a date set by the Company.
DESCRIPTION OF THE SERIES C PREFERRED SHARES
We
filed a statement
of designations with
the Marshall Islands
registry establishing our
Series C Preferred
Stock, of
which 10,675 are
issued and outstanding,
par value $0.01 per
share. The Series
C Preferred Stock
will vote with
the
common
shares of
the Company,
and each
share of
the Series
C Preferred
Stock shall
entitle the
holder thereof
to
1,000 votes on all matters
submitted to a vote of
the stockholders of the Company.
The Series C Preferred Stock
has
no dividend or liquidation rights and cannot be transferred without the consent of the Company
except to the holder's
affiliates and immediate family members.
For
a
complete
description
of
the
rights,
we
encourage
you
to
read
the
“Certificate
of
Designation
of
Rights,
Preferences, and
Privileges of
Series C Preferred
Stock of
the Company”,
which we
have filed
as exhibit
3.1 to
the
Form 6-K on February 6, 2019.
DESCRIPTION OF THE SERIES D PREFERRED SHARES
We
filed a statement
of designations with
the Marshall Islands
registry establishing our
Series D Preferred
Stock, of
which 400
are issued
and outstanding,
par value
$0.01 per
share. The
Series D
Preferred Stock
has no
dividend or
liquidation rights. The Series D Preferred Stock votes with the common shares of the Company, and each share of the
Series D Preferred
Stock shall entitle
the holder thereof
to up to 200,000
votes, on all
matters submitted to
a vote of
the stockholders of
the Company,
notwithstanding any other
provision of the
Statement of Designation
of the Series
D Preferred
Stock,
to the
extent that
the total
number of
votes one
or more
holders of
Series D
Preferred
Stock is
entitled to vote (including any
voting power of such holders
derived from Series D Preferred
Stock, shares of common
stock or any other voting
security of the Company issued
and outstanding as of the
date hereof or that may be
issued
in the
future) on
any matter
submitted to
a vote
of stockholders
of the
Company
would exceed
36.0% of
the total
number of votes eligible to
be cast on such matter,
the total number of votes that holders
of Series D Preferred Stock
may exercise derived from the Series
D Preferred Stock together with Common Shares
and any other voting securities
of the Company beneficially owned by such holder,
shall be reduced to 36% of the total number of votes that may be
cast on such matter submitted to a vote of stockholders.
For
a
complete
description
of
the
rights,
we
encourage
you
to
read
the
“Statement
of
Designation
of
Rights,
Preferences and
Privileges of
Series D
Preferred Stock
of the
Company”, which
we have filed
as Exhibit
3.1 to
the
Form 6-K on September 8, 2023.
DESCRIPTION OF WARRANTS
On December 14,
2023, we issued warrants
to purchase common
shares (the “Warrants”)
to the holders
of record of
Common Stock
as of
the close
of business
on December
6, 2023
(the “Record
Date”) on
the terms
and conditions
described in the Warrant Agreement (as defined below and attached as exhibit 2.10 to this
annual report). Each holder
received one
Warrant
for every five
shares of issued
and outstanding shares
of common stock
held as of
the Record
Date (rounded
down
to the
nearest whole
number
for any
fractional
Warrant).
Each
Warrant
entitles the
holder
to
purchase,
at the
holder’s
sole and
exclusive election,
at the
exercise price,
one share
of common
stock plus,
to the
extent, described below,
the Bonus Share Fraction.
A Bonus Share Fraction
entitles a holder to receive
an additional
0.5 of
a share
of common
stock for
each Warrant
exercised (the
“Bonus Share
Fraction”) without
payment
of any
additional exercise
price. Since
the dividend
ex-Date on
March 12, 202
5, the
Bonus Share
Fraction was
adjusted to
0.54827 of a share of common stock for each Warrant
exercised.
The
right
to
receive
the
Bonus
Share
Fraction
will
expire
at
5:00
p.m.
New
York
City
time
(the
“Bonus
Share
Expiration
Date”) upon
the earlier
of (I)
the date
specified by
the Registrant
upon
not less
than
20
business days
’
notice and (ii) the first business day
following the last day of the first 30
consecutive trading day period in
which the
daily VWAP
of the shares of common stock
has been at least equal to
the then applicable trigger price for
at least 20
trading days (whether or
not consecutive) (the “Bonus
Price Condition”). Any Warrant exercised with an
exercise date
after the
Bonus Share
Expiration Date
will not
be entitled
to any
Bonus Share
Fraction. The
Company will
make a
public announcement of
the Bonus Share Expiration
Date (I) at least
20 business days
prior to such
date, in the case
of the Company
setting a Bonus
Share Expiration
Date and (ii)
prior to market
open on the
Bonus Share
Expiration
Date
in
the
case
of
a
Bonus
Price
Condition.
Unless
earlier
redeemed,
the
Warrants
will
expire
and
cease
to
be
exercisable at 5:00 p.m.
New York
City time on December
14, 2026 (the “Expiration
Date”). In connection
with the
Warrant
distribution,
we
filed
a
prospectus
supplement,
dated
December
14,
2023,
pursuant
to
ashelf
registration
statement on Form F-3 declared effective on July 9, 2021, registering up to 33,919,605 shares of common stock to be
issued upon exercise
of the Warrants
under the Securities
Act of 1933,
as amended. The
shelf registration statement
on Form F-3 declared effective on July 9, 2021 expired and the Warrant
distribution is now being offered pursuant to
our
existing
shelf
registration
statement
on
Form
F-3
declared
effective
on
September
9,
2024.
The
Warrants
commenced trading on the New York
Stock Exchange under the ticker “DSX WS” on December 14, 2023.
DESCRIPTION OF PREFERRED STOCK PURCHASE RIGHTS
On February 2, 2024, we entered into an Amended and
Restated Stockholders Rights Agreement with Computershare
Trust Company,
N.A., as Rights Agent,
to amend and
restate the Stockholders
Rights Agreement, dated
January 15,
2016.
Under the Rights Agreement, we declared a dividend payable of one preferred stock purchase right,
or right, for each
share of
common stock
outstanding at
the close
of business
on January
26, 2016.
Each Right
entitles the
registered
holder to purchase
from us one
one-thousandth of
a share of Series
A Participating Preferred
Stock, par value
$0.01
per
share,
at
an
exercise
price
of
$25.00
per
share.
The
Rights
will
separate
from
the
common
stock
and
become
exercisable only if a
person or group acquires
beneficial ownership of 15%
or more of our common
stock (including
through entry into
certain derivative positions) in
a transaction not
approved by our
board of directors.
In that situation,
each holder of
a Right (other than
the acquiring person,
whose Rights will become
void and will not
be exercisable)
will have the right to
purchase, upon payment of
the exercise price, a number
of shares of our common
stock having
a then-current market
value equal to
twice the exercise
price. In addition,
if the Company
is acquired in
a merger or
other business combination after an acquiring
person acquires 15% or more of our
common stock, each holder of the
Right will thereafter
have the right
to purchase, upon
payment of the
exercise price, a
number of shares
of common
stock
of
the
acquiring
person
having
a
then-current
market
value
equal
to
twice
the
exercise
price.
The
acquiring
person will not be entitled to exercise
these Rights. Until a Right is exercised, the
holder of a Right will
have no rights
to vote or receive dividends or any other stockholder rights. The Rights may
have anti-takeover effects.
The Rights will
cause substantial dilution
to any person
or group that
attempts to acquire
us without the
approval of
our board of
directors. As a result,
the overall effect
of the Rights may
be to render
more difficult or
discourage any
attempt to
acquire us.
Because our
board of
directors approve
a redemption
of the
Rights or
a permitted
offer,
the
Rights should not interfere with a merger or other business combination
approved by our board of directors.
We have summarized the material terms and conditions of the
Rights Agreement and the Rights below. Fora complete
description of
the Rights, we
encourage you
to read the
Rights Agreement,
which we have
filed as an
exhibit to
the
registration statement filed with the Commission on February 2, 2024.
Detachment of the Rights
The
Rights
are
attached
to all
certificates
representing
our
currently
outstanding
common
stock,
or,
in
the case
of
uncertificated common shares registered in book entry form, which
we refer to as "book entry shares, “by notation in
book entry accounts
reflecting ownership, and
will attach to all
common stock certificates
and book entry
shares we
issue prior to the Rights distribution date that we describe below.
The Rights are not exercisable until after the Rights
distribution
date and
will expire
at the
close of
business on
January 14,2026,
unless we
redeem
or exchange
them
earlier as we
describe below.
The Rights will
separate from
the common
stock and a
Rights distribution
date would
occur, subject to specified exceptions, on
the earlier of the following two dates:
●
the 10th day after public announcement that a person or group has acquired ownership of 15%or more of the
Company's common stock; or
●
the 10th business
day (or such
later date as determined
by the Company's
board of directors)
after a person
or group
announces a
tender or
exchange offer
which would
result in
that person
or group
holding 15%
or
more of the Company's common stock.
"Acquiring person" is generally defined in
the Rights Agreement as any
person, together with all affiliate’s associates,
who beneficially owns 15% or more of the Company's common
stock. However, the Company,
any subsidiary of the
Company or any employee benefit plan
of the Company or of any subsidiary
of the Company,
or any person holding
shares of common stock for
or pursuant to the terms of any
such plan, are excluded from
the definition of "acquiring
person." In
addition, persons
who beneficially
own 15%
or more
of the
Company's common
stock on
the effective
date of
the Rights
Agreement are
excluded from
the definition
of "acquiring
person" unless
and until
such time
as
such Person shall become the Beneficial Owner of an aggregate of 18.5% or
more of the Company’s then outstanding
Common Stock, (excluding shares acquired pursuant to a grant under a Company equity incentive plan, a dividend or
distribution paid or
made by the
Company on the
outstanding shares of
Common Stock in
shares of Common
Stock
or securities convertible
into shares of Common
Stock or pursuant to
a split or subdivision
of the outstanding
shares
of Common
Stock), and provided
further, that
Tuscany Shipping
Corp. individually or
together with one
or more of
its Affiliates shall not be or become an “Acquiring Person” as defined
herein.
Our board of
directors may defer
the Rights
distribution date in
some circumstances, and
some inadvertent acquisitions
will not result in a
person becoming an
acquiring person if the person
promptly divests itself of
sufficient number of
shares of common stock.
Until the Rights distribution date:
●
our
common
stock
certificates
and
book
entry
shares
will
evidence
the
Rights,
and
the
Rights
will
be
transferable only with those certificates; and
●
any new common
stock will be
issued with Rights
and new certificates
or book entry
shares, as applicable,
will contain a notation incorporating the Rights Agreement by reference.
As soon as practicable after the Rights distribution date, the
Rights agent will mail certificates representing the Rights
to holders
of record
of common
stock at
the close
of business
on that
date. After
the Rights
distribution date,
only
separate Rights certificates will represent the Rights.
We will not issue Rights with
any shares of common
stock we issue after
the Rights distribution date,
except our board
of directors may otherwise determine.
Flip-In Event
A
"flip-in
event"
will
occur
under
the
Rights
Agreement
when
a
person
becomes
an
acquiring
person
other
than
pursuant to certain
kinds of permitted
offers. An offer is
permitted under the
Rights Agreement if
a person will
become
an
acquiring
person
pursuant
to
a
merger
or
other
acquisition
agreement
that
has
been
approved
by
our
board
of
directors prior to that person becoming an acquiring person.
If a flip-in event occurs and we
have not previously redeemed the Rights as described
under the heading “Redemption
of Rights" below or,
if the acquiring person
acquires less than 50%
of our outstanding
common stock and we
do not
exchange the
Rights as
described under
the heading
"Exchange of
Rights" below,
each Right,
other than
any Right
that has
become void,
as we
describe below,
will become
exercisable at
the time
it is
no longer
redeemable for
the
number of shares
of common stock, or, in
some cases, cash,
property or other of
our securities, having a
current market
price equal to two times the exercise price of such right.
When a
flip-in event
occurs, all
Rights that
then are,
or in
some circumstances
that were,
beneficially owned
by or
transferred
to
an
acquiring
person
or
specified
related
parties
will
become
void
in
the
circumstances
the
Rights
Agreement specifies.
Transfer of Shares
The Board of Directors has the power and authority to make such rules and regulations
as they may deem expedient
concerning the issuance, registration and transfer of shares of the Company’s
stock, and may appoint transfer agents
and registrars thereof.
Comparison of Marshall Island Law to Delaware Law
Marshall Islands
Delaware
Shareholder Meetings
Held at a time and place as designated in the
bylaws.
Special meetings of the shareholders may be called
by the board of directors or by such person or
persons as may be authorized by the articles of
incorporation or by the bylaws.
May be held at such time or place as
designated in the certificate of incorporation.
or the bylaws, or if not so designated, as
determined by the board of directors. Special
meetings of the shareholders may be called by
the board of directors or by such person or
persons as may be authorized by the
certificate of incorporation or by the bylaws.
May be held within or without the Marshall
Islands.
May be held within or without Delaware.
Notice:
Whenever shareholders are required to take any
action at a meeting, written notice of the meeting
shall be given which shall state the place, date and
hour of the meeting and, unless it is an annual
meeting, indicate that it
is being issued by or at the direction of the person
calling the meeting. Notice of a
special meeting shall also state the purpose for
which the meeting is called.
A copy of the notice of any meeting shall be given
personally, sent by mail
or by
electronic mail not less than 15 nor more than 60
days before the meeting.
Notice:
Whenever shareholders are required to take any action
at a meeting, a written notice of the meeting shall be
given which shall state the place, if any,
date and hour
of the meeting, and the means of remote
communication, if any.
Written notice shall be given not less than 10nor
more
than 60 days before the meeting.
Shareholders’ Voting
Rights
Unless otherwise provided in the articles of
incorporation,
any action required to be taken at a
meeting of shareholders may be taken without a
meeting, without prior notice and without a vote, if
a consent in writing, setting forth the action so
taken, is signed by all the shareholders entitled to
vote with respect to the subject matter thereof, or if
the articles of incorporation so provide, by the
holders of outstanding shares having not less than
the minimum number of votes that would be
necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon
were present and voted.
Any person authorized to vote may authorize
another person or persons to act for him by proxy.
Unless otherwise provided in the articles of
incorporation or bylaws, a majority of shares
entitled to vote constitutes a quorum. In no event
shall a quorum consist of fewer than one-third of
the shares entitled to vote at a meeting.
When a quorum is once present to organize a
meeting,
it is not broken by the subsequent
withdrawal of any shareholders.
The articles of incorporation may provide for
cumulative voting in the election of directors.
Any action required to be taken at a meeting of
shareholders may be taken without a meeting if a
consent for such action is inwriting and is signed by
shareholders having not fewer than the minimum
number of votes that would be necessary to authorize
or take
such action at a meeting at which all shares
entitled to vote thereon were present and
voted.
Any person authorized to vote may authorize
another person or persons to act for him by
proxy.
For stock corporations, the certificate of
incorporation or bylaws may specify the
number of shares required to constitute a
quorum but in no event shall a quorum consist
of less than one-third of shares entitled to vote
at a meeting. In the absence of such
specifications, a majority of shares entitled to
vote shall constitute a quorum.
When a quorum is once present to organize a
meeting, it is not broken by the subsequent
withdrawal of any shareholders.
The certificate of incorporation may provide
for cumulative voting in the election of
directors.
Marshall Islands Merger or Consolidation
Any two or more domestic corporations may
merge into a single corporation if approved by the
board and if authorized by a majority vote of the
holders of outstanding shares at shareholder
meeting.
Any two or more corporations existing under the laws
of the state may merge into a single corporation
pursuant to a board resolution and upon the majority
vote by shareholders of each constituent corporation at
an annual or special meeting.
Any sale, lease, exchange or other disposition of
all or substantially all the assets of a corporation, if
not made in the corporation’s usual
or regular
course of business, once approved by the board,
shall be authorized by the affirmative vote of two-
thirds of the shares of those entitled to vote at a
shareholder meeting.
Every corporation may at any meeting of the board
sell, lease or exchange all or substantially all of its
property and assets board deems expedient and for the
best interests of the corporation when so authorized by
a resolution adopted by the holders of a majority of the
outstanding stock of the corporation entitled to vote.
Any domestic corporation owning at least
90% of the outstanding shares of each class of
another domestic corporation may merge such
other corporation into itself without the
authorization of the shareholders of any
corporation.
Any mortgage, pledge of or creation of a
security interest in all or any part of the
corporate property may be authorized without
the vote or consent of the shareholders, unless
otherwise provided for in the articles of
incorporation.
Any corporation owning at least 90% of the
outstanding shares of each class of another corporation
may merge the other corporation into itself and assume
all of its obligations without the vote or consent of
shareholders; however, in case the parent
corporation is
not the surviving corporation, the proposed merger
shall be approved by a majority of the outstanding
stock of the parent corporation entitled to vote at a duly
called shareholder meeting. Any mortgage or pledge of
a corporation’s property and assets may be
authorized
without the vote or consent of shareholders, except to
the extent that the certificate of incorporation otherwise
provides.
Directors
The board of directors must consist of at least
one member.
The board of directors must consist of at least
one member.
The number of board members may be
changed by an amendment to the bylaws, by
the shareholders, or by action of the board
under the specific provisions of a bylaw.
If the board is authorized to change the
number of directors, it can only do so by a
majority of the entire board and so long as no
decrease in the number shall shorten the term
of any incumbent director.
The number of board members shall be fixed
by, or in a manner provided
by, the bylaws,
unless the certificate of incorporation fixes
the number of directors, in which case a
change in the number shall be made only by
an amendment to the certificate of
incorporation.
If the number of directors is fixed by the
certificate of incorporation, a change in the
number shall be made only by an amendment
of the certificate.
Removal:
Any or all of the directors may be removed
for cause by vote of the shareholders.
If the articles of incorporation or the bylaws
so provide, any or all of the directors may be
removed without cause by vote of the
shareholders.
Removal:
Any or all of the directors may be removed,
with or without cause, by the holders of a
majority of the shares entitled to vote unless
the certificate of incorporation otherwise
provides.
In the case of a classified board, shareholders
may effect removal of any or all directors
only for cause.
Appraisal rights shall be available for the
shares of any class or series of stock of a
corporation in a merger or consolidation,
subject to limited exceptions, such as a merger or
consolidation of corporations listed
on a national securities exchange in which
listed stock is offered for consideration is (I)
listed on a national securities exchange or (ii)
held of record by more than 2,000 holders.
Dissenters’ Rights of Appraisal
Shareholders have a right to dissent from any
plan of merger, consolidation or
sale of all or
substantially all assets not made in the usual
course of business, and receive payment of
the fair value of their shares. However, the
right of a dissenting shareholder under the
BCA to receive payment of the appraised fair
value of his shares shall not be available for
the shares of any class or series of stock,
which shares or depository receipts in respect
thereof, at the record date fixed to determine
the shareholders entitled to receive notice of
and to vote at the meeting of the shareholders
to act upon the agreement of merger or
consolidation, were either (i) listed on a
securities exchange or admitted for trading on
an interdealer quotation system or (ii) held of
record by more than 2,000 holders. The right
of a dissenting shareholder to receive
payment of the fair value of his or her shares
shall not be available for any shares of stock
of the constituent corporation surviving a
merger if the merger did not require for its
approval the vote of the shareholders of the
surviving corporation.
In any derivative suit instituted by a
shareholder of a corporation, it shall be
averred in the complaint that the plaintiff was
a shareholder of the corporation at the time of
the transaction of which he complains or that
such shareholder’s stock thereafter devolved
upon such shareholder by operation of law.
Other requirements regarding derivative suits
have been created by judicial decision,
including that a shareholder may not bring a
derivative suit unless he or she first demands
that the corporation sue on its own behalf and
that demand is refused (unless it is shown that
such demand would have been futile).
A holder of any adversely affected shares
who does not vote on or consent in writing to
an amendment to the articles of incorporation
has the right to dissent and to receive
payment for such shares if the amendment:
• Alters or abolishes any preferential
right of any outstanding shares having
preference; or
• Creates, alters, or abolishes any
provision or right in respect to the
redemption of any outstanding shares; or
• Alters or abolishes any preemptive
right of such holder to acquire shares
or other securities; or
• Excludes or limits the right of such
holder to vote on any matter, except
as such right may be limited by the
voting rights given to new shares then
being authorized of any existing or
new class.
Shareholder’s Derivative Actions
An action may be brought in the right of a
corporation to procure a judgment in its favor,
by a holder of shares or of voting trust
certificates or of a beneficial interest in such
shares or certificates. It shall be made to
appear that the plaintiff is such a holder at the
time of bringing the action and that he was
such a holder at the time of the transaction of
which he complains, or that his shares or his
interest therein devolved upon him by
operation of law.
A complaint shall set forth
with particularity the efforts of the plaintiff
to
secure the initiation of such action by the
board or the reasons for not making such
effort.
Such action shall not be discontinued,
compromised or settled, without the approval
of the High Court of the Republic of the
Marshall Islands.
Reasonable expenses including attorney’s
fees may be awarded if the action is
successful.
A corporation may require a plaintiff bringing
a derivative suit to give security for
reasonable expenses if the plaintiff owns less
than 5% of any class of outstanding shares or
holds voting trust certificates or a beneficial
interest in shares representing less than 5% of
any class of such shares and the shares, voting
trust certificates or beneficial interest of such
plaintiff has a fair value of $50,000 or less