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