EX-2.8 7 exhibit28.htm EX-2.8 exhibit28
 
Exhibit 2.8
DESCRIPTION OF THE REGISTRANT'S SECURITIES REGISTERED PURSUANT
 
TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
As of December
 
31, 2022, 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)
(5)
Series D Preferred Shares; and
8.875%
 
Series B
 
Cumulative
 
Redeemable
 
Perpetual
 
Preferred
 
Shares, $0.01
 
par value
 
(the “Series
 
B
Preferred Shares”).
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 Inc.
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
 
the 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
 
stock, holders
 
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 a
 
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 any
 
action required
 
or permitted
 
to be
taken by our
 
stockholders must be
 
effected at an annual
 
or special meeting
 
of stockholders or
 
by the unanimous
 
written
consent of
 
our stockholders.
 
Our amended
 
and restated
 
articles of
 
incorporation and
 
bylaws provide
 
that, subject
 
to
certain exceptions,
 
our Chairman,
 
Chief Executive
 
Officer,
 
or Secretary
 
at the direction
 
of the
 
board of
 
directors or
holders
 
of
 
not
 
less
 
than
 
one-fifth
 
of
 
all
 
outstanding
 
shares
 
may
 
call
 
special
 
meetings
 
of
 
our
 
stockholders
 
and
 
the
business transacted
 
at the special
 
meeting is
 
limited to the
 
purposes stated
 
in the
 
notice. Accordingly,
 
a stockholder
may be
 
prevented from
 
calling a
 
special meeting
 
for stockholder
 
consideration of
 
a proposal over
 
the opposition
 
of
our board of directors and stockholder consideration of a proposal may
 
be delayed until the next annual 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 an 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
 
B
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 a 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)
 
after
 
satisfaction
 
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
 
are 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 any
 
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 100,000
 
votes, on all
 
matters submitted to
 
a vote of
the stockholders
 
of the Company,
 
subject to a
 
maximum number
 
of votes
 
eligible to be
 
cast by
 
such holder derived
from the
 
Series D
 
Preferred Shares
 
and any
 
other voting
 
security of
 
the Company
 
held by
 
the holder
 
to be
 
equal to
the lesser of (i)
 
36% of the
 
total number
 
of votes entitled
 
to vote on
 
any matter
 
put to shareholders
 
of the Company
and (ii) the sum
 
of the holder’s aggregate voting
 
power derived from securities other
 
than the Series D
 
Preferred Stock
and 15% of the total number of votes entitled to be cast on matters put to shareholders of the Company.
 
The Series D
Preferred Stock is transferable only to the holder’s immediate family
 
members and to affiliated persons.
 
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 June 23, 2021.
DESCRIPTION OF PREFERRED STOCK PURCHASE RIGHTS
On January 15,
 
2016, we entered
 
into a
 
Stockholders Rights Agreement,
 
or the
 
Rights Agreement, with
 
Computershare
Trust Company,
 
N.A., as Rights Agent,
 
to replace the
 
Amended and Restated
 
Stockholders Rights Agreement
 
dated
October 7, 2008.
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
 
$40.00
 
per
 
share.
 
The
 
Rights
 
will
 
separate
 
from
 
the
 
common
 
stock
 
and
 
become
exercisable only if a person or
 
group acquires beneficial ownership of 18.5% 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
 
18.5% 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
 
can 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. For a 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 June 28, 2018.
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
 
affiliates
 
or
associates,
 
who
 
beneficially
 
owns
 
18.5%
 
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
 
18.5% or more of the Company's common stock on
the effective
 
date of the
 
Rights Agreement are
 
excluded from the
 
definition of "acquiring
 
person" until such
 
time as
they acquire
 
additional shares in
 
excess of 2%
 
of the Company's
 
then outstanding
 
common stock as
 
specified in the
Rights Agreement for purposes of
 
the Rights, and therefore, until
 
such time, their ownership cannot trigger
 
the Rights.
Specified "inadvertent"
 
owners that
 
would otherwise
 
become an
 
acquiring person,
 
including those
 
who would
 
have
this designation
 
as a
 
result of
 
repurchases of
 
common stock
 
by us,
 
will not
 
become acquiring
 
persons as
 
a result
 
of
those transactions.
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 a 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
 
as 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
The
 
following
 
table provides
 
a
 
comparison
 
between
 
some statutory
 
provisions
 
of the
 
Delaware General
 
Company
Law and the Marshall Islands Business Corporations Act relating to shareholders’
 
rights.
Marshall Islands
Delaware
Shareholder Meetings
Held at a time and place as designated in 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 articles of incorporation or by 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 certificate of incorporation
or by the bylaws.
May be held within or without the Marshall Islands.
May be held within or without Delaware.
Notice:
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.
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.
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.
Written notice shall be given not less than 10
 
nor 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 action required to be taken at a meeting of
shareholders may be taken without a meeting if a
consent for such action is in writing 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.
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.
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.
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.
The certificate of incorporation may provide for
cumulative voting in the election of directors.
Marshall Islands
Delaware
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 a 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 as its 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 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, 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 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.
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 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.
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:
Removal:
Any or all of the directors may be removed for cause by
vote of the shareholders.
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.
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.
In the case of a classified board, shareholders may
effect removal of any or all directors only for cause.
Marshall Islands
Delaware
 
 
 
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.
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.
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.
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.
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.
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).
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.