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.