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Registrant Name |
Cohen
& Co Inc. |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 2, 2024
Cohen & Company
Inc.
(Exact name of registrant as specified in its
charter)
Maryland |
|
1-32026 |
|
16-1685692 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification No.) |
Cira Centre
2929 Arch Street, Suite 1703
Philadelphia,
Pennsylvania |
|
19104 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s telephone number, including
area code: (215) 701-9555
Not Applicable
(Former name or former address, if changed since
last report.)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
¨ |
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
|
|
Title of each class |
|
Trading
Symbol(s) |
|
Name of each exchange on which registered |
Common Stock, par value $0.01 per share |
|
COHN |
|
The NYSE
American Stock Exchange |
Indicate by check mark whether the registrant is
an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. |
Entry into a Material Definitive Agreement. |
On January 2, 2024, Cohen & Company Inc., a Maryland
corporation (the “Company”), entered into a Section 382 Rights Agreement (the “Rights Agreement”) between
the Company and Computershare Inc., as rights agent (the “Rights Agent”).
The Rights Agreement provides for a distribution of one preferred stock
purchase right (each, a “Right,” and collectively, the “Rights”) for each share of the Company’s common
stock, par value $0.01 per share (“Common Stock”), outstanding to stockholders of record at the close of business on January
16, 2024 (the “Record Date”). Each Right entitles the registered holder to purchase from the Company a unit (a “Unit”)
consisting of one ten-thousandth of a share of the Company’s Series C Junior Participating Preferred Stock, par value $0.001 per
share (the “Series C Preferred Stock”), at a purchase price of $100.00 per Unit (the “Purchase Price”), subject
to adjustment. The description and terms of the Rights are set forth in the Rights Agreement.
The Company’s Board of Directors (the “Board of Directors”)
adopted the Rights Agreement in an effort to protect stockholder value by attempting to protect against a possible limitation on the Company’s
ability to use its net operating loss and net capital loss carry forwards (the “deferred tax assets”) to reduce potential
future federal income tax obligations. The Company has experienced substantial operating and capital losses, and under the Internal Revenue
Code of 1986, as amended (the “Code”), and rules promulgated by the Internal Revenue Service, the Company may “carry
forward” these losses in certain circumstances to offset any current and future earnings and thus reduce the Company’s federal
income tax liability, subject to certain requirements and restrictions. To the extent that the deferred tax assets do not otherwise become
limited, the Company believes that it will be able to carry forward a significant amount of deferred tax assets, and therefore these deferred
tax assets could be a substantial asset to the Company. However, if the Company experiences an “Ownership Change,” as such
term is defined in Section 382 of the Code, its ability to use the deferred tax assets will be substantially limited, and the
timing of the usage of the deferred tax assets could be substantially limited and/or delayed, which could therefore significantly impair
the value of those assets.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding or, in the case of uncertificated shares of Common Stock registered in book entry form (“Book
Entry Shares”) by notation in book entry (which certificates for Common Stock and Book Entry Shares shall be deemed also to be certificates
for Rights), and no separate Rights certificates will be distributed.
Subject to certain exceptions specified in the Rights Agreement, the
Rights will separate from the Common Stock and a “Distribution Date” will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or associated persons has become an “Acquiring Person”
(as defined below) (the “Stock Acquisition Date”) and (ii) 10 business days following the commencement of a tender
offer or exchange offer that would result in a person or group becoming an Acquiring Person. Pursuant to the Rights Agreement, an “Acquiring
Person” means any person or entity who or which, together with all affiliates and associates of such person or entity, is the beneficial
owner of 4.95% or more of the shares of Common Stock then outstanding, but does not include the Company or any “Exempted Person”
(as defined below). Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates and will be transferred
with and only with such Common Stock certificates, (ii) new Common Stock certificates after the Record Date will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for transfer of any certificates for Common Stock outstanding
will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate.
Pursuant to the Rights Agreement, an “Exempted Person”
is any person or entity who, together with all affiliates and associates of such person or entity, is or may become, as of January 2,
2024, the beneficial owner of Common Stock and/or other securities exercisable for shares of Common Stock representing 4.95% or more of
the shares of Common Stock outstanding as of January 2, 2024. However, any such person or entity will no longer be deemed to be an Exempted
Person and shall be deemed an Acquiring Person under the Rights Agreement if such person or entity, together with all affiliates and associates
of such person or entity, becomes the beneficial owner (and so long as such person continues to be the beneficial owner of 4.95% or more
of the then outstanding shares of Common Stock) of additional shares of Common Stock, except (x) pursuant to equity compensation
awards granted to such person or entity by the Company or options or warrants outstanding and beneficially owned by such person or entity
as of January 2, 2024, or as a result of an adjustment to the number of shares of Common Stock represented by such equity compensation
award pursuant to the terms thereof; or (y) as a result of a stock split, stock dividend or the like. In addition, any person or
entity who, together with all affiliates and associates of such person or entity, becomes the beneficial owner of Common Stock and/or
other securities exercisable for shares of Common Stock representing 4.95% or more of the shares of Common Stock then outstanding as a
result of a purchase by the Company or any of its subsidiaries of shares of Common Stock will also be an “Exempted Person.”
However, any such person will no longer be deemed to be an Exempted Person and will be deemed to be an Acquiring Person if such person,
together with all affiliates and associates of such person, becomes the beneficial owner, at any time after the date such person became
the beneficial owner of 4.95% or more of the then outstanding shares of Common Stock, of additional shares of Common Stock, except if
such additional securities are acquired (x) pursuant to the exercise of options or warrants to purchase Common Stock outstanding
and beneficially owned by such person as of the date such person became the beneficial owner of 4.95% or more of the then outstanding
shares of Common Stock or as a result of an adjustment to the number of shares of Common Stock for which such options or warrants are
exercisable pursuant to the terms thereof, or (y) as a result of a stock split, stock dividend or the like.
In addition, the Rights Agreement defined the term “Exempted
Person” to also include any person or entity who, together with all affiliates and associates of such person or entity, is the beneficial
owner of Common Stock and/or other securities exercisable for shares of Common Stock representing 4.95% or more of the shares of Common
Stock outstanding, and whose beneficial ownership would not, as determined by the Board of Directors, jeopardize or endanger the availability
of the Company of its deferred tax assets. However, any such person or entity will cease to be an Exempted Person if (x) such person
or entity ceases to beneficially own 4.95% or more of the shares of the then outstanding Common Stock or (y) the Board of Directors
makes a contrary determination with respect to the effect of such person’s or entity’s beneficial ownership (together with
all affiliates and associates of such person) with respect to the availability to the Company of its deferred tax assets.
Pursuant to the Rights Agreement, a purchaser, assignee or transferee
of the shares of Common Stock (or options or warrants exercisable for Common Stock) from an Exempted Person will not be considered an
Exempted Person, except that a transferee from the estate of an Exempted Person who receives Common Stock as a bequest or inheritance
from an Exempted Person will be an Exempted Person so long as such transferee continues to be the beneficial owner of 4.95% or more of
the then outstanding shares of Common Stock.
The Rights are not exercisable until the Distribution Date and will
expire on the earliest of (i) the close of business on December 31, 2026, (ii) the time at which the Rights are redeemed pursuant
to the Rights Agreement, (iii) the time at which the Rights are exchanged pursuant to the Rights Agreement, (iv) the repeal
of Section 382 of the Code or any successor statute if the Board of Directors determines that the Rights Agreement is no longer necessary
or desirable for the preservation of certain tax benefits, and (v) the beginning of a taxable year of the Company to which the Board
of Directors determines that certain tax benefits may not be carried forward. At no time will the Rights have any voting power.
Except as otherwise determined by the Board of Directors, only shares
of Common Stock issued prior to the Distribution Date will be issued with Rights.
Pursuant to the Rights Agreement, in the event that a person or entity
becomes an Acquiring Person, each other holder of a Right will thereafter have the right to receive, upon exercise, Common Stock (or,
in certain circumstances, cash, property or other securities of the Company), having a value equal to two times the exercise price of
the Right. The exercise price is the Purchase Price times the number of Units associated with each Right (initially, one). For example,
at an exercise price of $100.00 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase $200.00 worth of Common Stock (or other consideration, as noted
above) for $100.00. If the Common Stock at the time of exercise had a market value per share of $20.00, the holder of each valid Right
would be entitled to purchase ten (10) shares of Common Stock for $100.00.
Notwithstanding any of the foregoing, following the occurrence of a
person or entity becoming an Acquiring Person (the “Flip-In Event”), all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by such Acquiring Person will be null and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company engages in a merger or other business combination transaction in which the Company is not the surviving corporation;
(ii) the Company engages in a merger or other business combination transaction in which the Company is the surviving corporation
and the Common Stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold
or transferred, each holder of a Right (except Rights which have previously been voided as set forth above) will thereafter have the right
to receive, upon exercise of the Right, common stock of the acquiring company having a value equal to two times the exercise price of
the Right.
However, Rights are not exercisable following the occurrence of a Flip-In
Event until such time as the Rights are no longer redeemable by the Company as set forth below.
The Purchase Price payable, and the number of Units of Series C Preferred
Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Series C Preferred Stock, (ii) if
holders of the Series C Preferred Stock are granted certain rights or warrants to subscribe for Series C Preferred Stock or convertible
securities at less than the current market price of the Series C Preferred Stock, or (iii) upon the distribution to holders of the
Series C Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the Purchase Price. No fractional Units will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the Series C Preferred Stock on the last trading date prior to
the date of exercise.
At any time after the Stock Acquisition Date, the Company may exchange
all or part of the Rights (other than Rights owned by an Acquiring Person) for Common Stock at an exchange ratio equal to (i) a number
of shares of Common Stock per Right with a value equal to the spread between the value of the number of shares of Common Stock for which
the Rights may then be exercised and the Purchase Price or (ii) if prior to the acquisition by the Acquiring Person of 50% or more
of the then outstanding shares of Common Stock, one share of Common Stock per Right (subject to adjustment).
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right. Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $0.001
redemption price.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. While the distribution
of the Rights will not be taxable to shareholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable for Common Stock (or other consideration) of the Company as set forth above or
in the event the Rights are redeemed.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by the Board of Directors prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board of Directors in order to cure any ambiguity,
to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person), or
to shorten or lengthen any time period under the Rights Agreement; provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
The foregoing description of the Rights Agreement does not purport
to be complete and is qualified in its entirety by reference to the full text of the Rights Agreement, which is attached hereto as Exhibit
4.1 and is incorporated herein by reference.
Item 3.03. |
Material Modification to Rights of Security Holders. |
The information provided in Item 1.01 of this Current Report on Form
8-K is incorporated by reference into this Item 3.03.
Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits.
* Filed electronically herewith.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
COHEN & COMPANY INC. |
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Date: January 2, 2024 |
By: |
/s/ Joseph W. Pooler, Jr. |
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|
Name: |
Joseph W. Pooler, Jr. |
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|
Title: |
Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit 4.1
COHEN & COMPANY INC.
and
COMPUTERSHARE INC.
as
Rights
Agent
Section 382
Rights Agreement
Dated
as of January 2, 2024
Table
of Contents
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|
Page |
Section 1. |
Certain Definitions |
1 |
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Section 2. |
Appointment of Rights Agent |
7 |
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Section 3. |
Issue of Rights Certificates |
7 |
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Section 4. |
Form of Rights Certificates |
9 |
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Section 5. |
Countersignature and Registration |
10 |
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Section 6. |
Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates |
10 |
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Section 7. |
Exercise of Rights; Purchase Price; Expiration Date of Rights |
11 |
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Section 8. |
Cancellation and Destruction of Rights Certificates |
13 |
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Section 9. |
Reservation and Availability of Capital Stock |
13 |
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Section 10. |
Preferred Stock Record Date |
15 |
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Section 11. |
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights |
15 |
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Section 12. |
Certificate of Adjusted Purchase Price or Number of Shares |
22 |
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Section 13. |
Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power |
23 |
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Section 14. |
Fractional Rights and Fractional Shares |
25 |
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Section 15. |
Rights of Action |
26 |
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Section 16. |
Agreement of Rights Holders |
26 |
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Section 17. |
Rights Certificate Holder Not Deemed a Stockholder |
27 |
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Section 18. |
Concerning the Rights Agent |
28 |
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Section 19. |
Merger or Consolidation or Change of Name of Rights Agent |
29 |
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Section 20. |
Duties of Rights Agent |
29 |
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Section 21. |
Change of Rights Agent |
32 |
Section 22. |
Issuance of New Rights Certificates |
33 |
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Section 23. |
Redemption and Termination |
33 |
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Section 24. |
Notice of Certain Events |
34 |
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Section 25. |
Notices |
35 |
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Section 26. |
Supplements and Amendments |
36 |
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Section 27. |
Exchange |
36 |
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Section 28. |
Successors |
38 |
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Section 29. |
Determinations and Actions by the Board of Directors, etc |
38 |
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Section 30. |
Benefits of this Agreement |
39 |
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Section 31. |
Severability |
39 |
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Section 32. |
Governing Law |
39 |
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Section 33. |
Counterparts |
39 |
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Section 34. |
Descriptive Headings |
40 |
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Section 35. |
Force Majeure |
40 |
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Section 1. |
Designation and Amount |
A-1 |
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Section 2. |
Dividends and Distributions |
A-2 |
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Section 3. |
Voting Rights |
A-3 |
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Section 4. |
Certain Restrictions |
A-5 |
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Section 5. |
Reacquired Shares |
A-6 |
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Section 6. |
Liquidation, Dissolution or Winding Up |
A-6 |
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Section 7. |
Consolidation, Merger, etc |
A-7 |
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Section 8. |
No Redemption |
A-7 |
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Section 9. |
Amendment |
A-7 |
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Section 10. |
Fractional Shares |
A-7 |
EXHIBITS: |
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Exhibit A - |
Articles Supplementary of Cohen & Company Inc. Series C Junior Participating Preferred Stock |
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Exhibit B - |
Form of Rights Certificate |
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Exhibit C - |
Summary of Rights to Purchase Series C Junior Participating Preferred Stock |
|
SECTION 382
RIGHTS AGREEMENT
SECTION 382 RIGHTS AGREEMENT, dated as of
January 2, 2024 (the “Agreement”), between Cohen & Company Inc., a Maryland corporation (the “Company”),
and Computershare Inc., a Delaware corporation, as Rights Agent (the “Rights Agent”).
W I T N E S E T H :
WHEREAS,
the Company has generated NOLs and NCLs (each, as defined in Section 1 hereof) for United States federal income tax purposes,
and such NOLs and NCLs may potentially provide valuable tax benefits to the Company, the Company desires to avoid an “ownership
change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”),
and the Treasury Regulations promulgated thereunder, and thereby preserve the ability to utilize fully such NOLs and NCLs and certain
other tax benefits and, in furtherance of such objective, the Company desires to enter into this Agreement; and
WHEREAS,
on January 2, 2024 (the “Rights Dividend Declaration Date”), the Board of Directors of the Company authorized
and declared a dividend distribution of one preferred share purchase right (a “Right”) for each share of common stock,
par value $0.01 per share, of the Company (the “Common Stock”) outstanding at the close of business on January 16,
2024 (the “Record Date”), and has authorized the issuance of one Right (as such number may hereinafter be adjusted
pursuant to the provisions of Section 11(o) hereof) for each share of Common Stock issued between the Record Date (whether
originally or not) and the earlier of the close of business on the Distribution Date (as defined in Section 3(a) hereof) and
the Expiration Date (as defined in Section 7(a) hereof), each Right initially representing the right to purchase one ten-thousandth
of a share (a “Unit”) of Preferred Stock (as defined herein) of the Company having the rights, powers and preferences
set forth in the form of Articles Supplementary attached hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises
and the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain
Definitions. For purposes of this Agreement, the following terms have the meanings indicated:
(a) “Acquiring
Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 4.95% or more of the shares of Common Stock then outstanding, but shall not include (i) the Company, (ii) any Subsidiary
of the Company, (iii) any employee benefit plan of the Company, or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such plan, or (iv) any Person holding Common Stock for
or pursuant to the terms of any such plan, or (v) any Exempted Person.
(b) “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and in effect on the date of this Agreement (the “Exchange
Act”), and to the extent not included within the foregoing, shall also include with respect to any Person, any other Person
whose shares of Common Stock would be deemed to be constructively owned by such first Person, owned by a “single entity”
as defined in Section 1.382-3(a)(1) of the Treasury Regulations, or otherwise aggregated with shares owned by such first Person,
pursuant to the provisions of the Code, or any successor or replacement provision, and the Treasury Regulations thereunder.
(c) “Agreement”
shall have the meaning set forth in the preamble of this Agreement.
(d) A
Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially own,” any
securities:
(i) which
such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time or the occurrence of an event) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, other rights, warrants or options,
or otherwise; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,”
(A) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for purchase or exchange, (B) securities issuable upon exercise
of Rights at any time prior to the occurrence of a Triggering Event, (C) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event, which Rights were acquired by such Person or any of such Person’s Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the “Original Rights”)
or pursuant to Section 11(i) hereof in connection with an adjustment made with respect to any Original Rights, or (D) securities
issued or issuable pursuant to any employee benefit plan of the Company or any Subsidiary of the Company or any employment agreement,
arrangement or other understanding between the Company or any Subsidiary of the Company and any Person or any of such Person’s
Affiliates or Associates;
(ii) which
such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has
“beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that
a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security under this subparagraph
(ii) as a result of (A) an agreement, arrangement or understanding to vote such security if such agreement, arrangement or
understanding: (1) arises solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, and
(2) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report), or
(B) securities issued or issuable pursuant to any employee benefit plan of the Company or any Subsidiary of the Company or any employment
agreement, arrangement or other understanding between the Company or any Subsidiary of the Company and any Person or any of such Person’s
Affiliates or Associates;
(iii) which
are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or
any of such Person’s Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a revocable proxy or consent as described in the proviso to subparagraph
(ii) of this paragraph (c) or disposing of any voting securities of the Company; provided, however, that nothing in this paragraph
(c) shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or to
“beneficially own,” any securities acquired through such Person’s participation in good faith in a firm commitment
underwriting until the expiration of forty (40) days after the date of such acquisition, and then only if such securities continue to
be owned by such Person at such expiration of forty (40) days; and provided, further, however, that any stockholder of the Company, with
Affiliates, Associates or other Person(s) who may be deemed representatives of it serving as director(s) or officer(s) of
the Company, shall not be deemed to beneficially own securities held by other Persons as a result of (x) Persons affiliated
or otherwise associated with such stockholder serving as director(s) or officer(s) or taking any action in connection therewith,
(y) discussing the status of its shares with the Company or other stockholders of the Company similarly situated or (z) voting
or acting in a manner similar to other stockholder(s) similarly situated, absent a specific finding by the Board of Directors of
the Company of an express agreement among such stockholders to act in concert with one another as stockholders so as to cause, in the
good faith judgment of the Board of Directors of the Company, each such stockholder to be the Beneficial Owner of the shares held by
the other stockholder(s); or
(iv) Notwithstanding
anything herein to the contrary, to the extent not within the foregoing provisions of this Section 1(c), a Person shall be deemed
the “Beneficial Owner” of, and shall be deemed to “beneficially own” or have “beneficial ownership”
of, securities which such Person would be deemed to constructively own or which otherwise would be aggregated with shares owned by such
Person pursuant to Section 382 of the Code, or any successor provision or replacement provision and the Treasury Regulations thereunder.
(e) “Business
Day” shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the States of New York or New
Jersey are authorized or obligated by law or executive order to close.
(f) “close
of business” on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.
(g) “Code”
shall have the meaning set forth in the recitals to this Agreement.
(h) “Common
Stock” shall have the meaning set forth in the recitals to this Agreement, except that “Common Stock” when used
with reference to any Person other than the Company shall mean the capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or direct the management, of such Person (or, if such Person is a
Subsidiary of another Person, the Person or Persons that ultimately control such first mentioned Person).
(i) “Common
Stock Equivalents” shall have the meaning set forth in Section 11(a)(ii) hereof.
(j) “Company”
shall have the meaning set forth in the preamble of this Agreement.
(k) “Current
Market Price” shall have the meaning set forth in Section 11(d) hereof.
(l) “Current
Value” shall have the meaning set forth in Section 11(a)(ii) hereof.
(m) “Distribution
Date” shall have the meaning set forth in Section 3(a) hereof.
(n) “Equivalent
Preferred Stock” shall have the meaning set forth in Section 11(b) hereof.
(o) “Exempted
Person” shall mean any Person who, together with all Affiliates and Associates of such Person, (i) is either (A) the
Beneficial Owner of securities (as disclosed in public filings with the Securities and Exchange Commission on the Rights Dividend Declaration
Date), representing 4.95% or more of the shares of Common Stock outstanding on the Rights Dividend Declaration Date, or (B) Daniel
G. Cohen (with respect to 4,480,947 shares of Common Stock of which such Person is or may become the Beneficial Owner as of the date
of this Agreement), Lester R. Brafman (with respect to 315,166 shares of Common Stock of which such Person is or may become the Beneficial
Owner as of the date of this Agreement), Betsy Zubrow Cohen (with respect to 83,595 shares of Common Stock of which such Person is or
may become the Beneficial Owner as of the date of this Agreement), Edward E. Cohen (with respect to 105,484 shares of Common Stock of
which such Person is or may become the Beneficial Owner as of the date of this Agreement), EBC 2013 Family Trust (with respect to 80,000
shares of Common Stock of which such Person is or may become the Beneficial Owner as of the date of this Agreement), and The DGC Family
Fintech Trust (with respect to 2,022,509 shares of Common Stock of which such Person is or may become the Beneficial Owner as of the
date of this Agreement), provided, however, that any such Person described in this clause (i) shall no longer be deemed to be an
Exempted Person and shall be deemed an Acquiring Person if such Person, together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner (and so long as such Person continues to be the Beneficial Owner of 4.95% or more of the then outstanding shares
of Common Stock), of additional securities representing any additional shares of Common Stock, except (x) pursuant to equity compensation
awards granted to such Person by the Company or options or warrants outstanding and beneficially owned by such Person as of the Rights
Dividend Declaration Date, or as a result of an adjustment to the number of shares of Common Stock represented by such equity compensation
award pursuant to the terms thereof, or (y) as a result of a stock split, stock dividend or the like; or (ii) becomes the Beneficial
Owner of securities representing 4.95% or more of the shares of Common Stock then outstanding because of a reduction in the number of
outstanding shares of Common Stock then outstanding as a result of the purchase by the Company or a Subsidiary of the Company of shares
of Common Stock, provided, however, that any such Person described in clause (ii) shall no longer be deemed to be an Exempted Person
and shall be deemed an Acquiring Person if such Person, together with all Affiliates and Associates of such Person, becomes the Beneficial
Owner, at any time after the date such Person became the Beneficial Owner of (and so long as such Person continues to be the Beneficial
Owner of) 4.95% or more of the then outstanding shares of Common Stock, of additional securities representing any additional shares of
Common Stock, except (x) pursuant to the exercise of options or warrants to purchase Common Stock outstanding and beneficially owned
by such Person as of the date such Person became the Beneficial Owner of 4.95% or more of the then outstanding shares of Common Stock
or as a result of an adjustment to the number of shares of Common Stock for which such options or warrants are exercisable pursuant to
the terms thereof, or (y) as a result of a stock split, stock dividend or the like; or (iii) who is a Beneficial Owner of 4.95%
or more of the shares of Common Stock outstanding and whose beneficial ownership would not, as determined by the Board of Directors of
the Company in its sole discretion, jeopardize or endanger the availability to the Company of its NOLs or NCLs; and provided further,
however, that if a Person is an Exempted Person solely by reason of clause (iii) above, then such Person shall cease to be an Exempted
Person if (A) such Person ceases to beneficially own 4.95% or more of the shares of the then outstanding Common Stock or (B) the
Board of Directors of the Company, in its sole discretion, makes a contrary determination with respect to the effect of such Person’s
beneficial ownership (together with all Affiliates and Associates of such Person) with respect to the availability to the Company of
its NOLs, NCLs or both thereof. A purchaser, assignee or transferee of the shares of Common Stock (or warrants or options exercisable
for Common Stock) from an Exempted Person shall not thereby become an Exempted Person, except that a transferee from the estate of an
Exempted Person who receives Common Stock as a bequest or inheritance from an Exempted Person shall be an Exempted Person so long as
such Person continues to be the Beneficial Owner of 4.95% or more of the then outstanding shares of Common Stock.
(p) “Expiration
Date” shall have the meaning set forth in Section 7(a) hereof.
(q) “Final
Expiration Date” shall have the meaning set forth in Section 7(a) hereof.
(r) “NCLs”
shall mean the Company’s net capital loss carryforwards.
(s) “NOLs”
shall mean the Company’s net operating loss carryforwards.
(t) “Person”
shall mean any individual, firm, corporation, limited liability company, partnership or other entity.
(u) “Preferred
Stock” shall mean shares of Series C Junior Participating Preferred Stock, par value $0.001 per share, of the Company,
and, to the extent that there are not a sufficient number of shares of Series C Junior Participating Preferred Stock authorized
to permit the full exercise of the Rights, any other series of Preferred Stock, par value $0.001 per share, of the Company designated
for such purpose containing terms substantially similar to the terms of the Series C Junior Participating Preferred Stock.
(v) “Principal
Party” shall have the meaning set forth in Section 13(b) hereof.
(w) “Purchase
Price” shall have the meaning set forth in Section 4(a) hereof.
(x) “Record
Date” shall have the meaning set forth in the recitals of this Agreement.
(y) “Right”
shall have the meaning set forth in the recitals of this Agreement.
(z) “Rights
Agent” shall have the meaning set forth in the preamble of this Agreement.
(aa) “Rights
Certificate” shall have the meaning set forth in Section 3(a) hereof.
(bb) “Rights
Dividend Declaration Date” shall have the meaning set forth in the recitals of this Agreement.
(cc) “Section 11(a)(ii) Event”
shall mean any event described in Section 11(a)(ii) hereof.
(dd) “Section 13
Event” shall mean any event described in clauses (x), (y) or (z) of Section 13(a) hereof.
(ee) “Signature
Guarantee” shall have the meaning set forth in Section 6(a).
(ff) “Stock
Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person
that an Acquiring Person has become such.
(gg) “Subsidiary”
shall mean, with reference to any Person, any Person of which a majority of the voting power of voting equity securities or equity interests
is beneficially owned, directly or indirectly, by such Person or otherwise controlled by such Person.
(hh) “Substitution
Period” shall have the meaning set forth in Section 11(a)(ii) hereof.
(ii) “Summary
of Rights” shall have the meaning set forth in Section 3(b) hereof.
(jj) “Trading
Day” shall have the meaning set forth in Section 11(d) hereof.
(kk) “Tax
Benefits” shall mean the net operating loss carryovers, capital loss carryovers, general business credit carryovers, alternative
minimum tax credit carryovers, foreign tax credit carryovers, any loss or deduction attributable to a “net unrealized built-in
loss” within the meaning of Section 382 of the Code, and the Treasury Regulations promulgated thereunder, of the Company or
any of its Subsidiaries.
(ll) “Treasury
Regulations” shall mean final, temporary and proposed income tax regulations promulgated under the Code, as amended.
(mm) “Triggering
Event” shall mean any Section 11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment
of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company
in accordance with the express terms and conditions hereof (and no implied terms or conditions), and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-rights agents as it may deem necessary or desirable (the term “Rights
Agent” being used herein to refer, collectively, to the Rights Agent together with any such co-Rights Agents), upon ten (10) days’
prior written notice to the Rights Agent. In the event the Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the Company reasonably determines, provided that such duties are consistent with the
terms and conditions of this Agreement and that contemporaneously with such appointment the Company shall notify, in writing, the Rights
Agent and any co-Rights Agents of any such duties. The Rights Agent shall have no duty to supervise, and shall in no event be liable
for, the acts or omissions of any such co-Rights Agents.
Section 3. Issue
of Rights Certificates.
(a) Until
the earlier of (i) the close of business on the tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of business on the Record Date), or (ii) the close of business on the
tenth Business Day (or such later date as the Board of Directors of the Company shall determine prior to such time as any Person becomes
an Acquiring Person) after the date that a tender or exchange offer by any Person (other than any Exempted Person, the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of
Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would
become an Acquiring Person (the earlier of (i) and (ii) being herein referred to as the “Distribution Date”),
(x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates for
the Common Stock registered in the names of the holders of the Common Stock (which certificates for Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates, and (y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including a transfer to the Company). As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested and provided with all necessary information, send) by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in substantially the form of Exhibit B hereto (the “Rights Certificates”),
evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Common Stock has been made pursuant to Section 11(o) hereof, at the time of distribution
of the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights.
As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates, and the Rights will be transferable
only by transfer separate from the transfer of the shares of Common Stock previously underlying such Rights. The Company shall promptly
give notice in accordance with Section 25 hereof to the Rights Agent upon the occurrence of the Distribution Date and, in any event,
if such notice is given orally, the Company shall confirm the same in writing on or before the next Business Day at the address provided
in Section 25 hereof. Until such notice is given to the Rights Agent, the Rights Agent may presume conclusively for all purposes
that the Distribution Date has not occurred.
(b) As
promptly as practicable following the Record Date, the Company shall send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit C (the “Summary of Rights”), by first-class, postage prepaid mail, to each record holder of
the Common Stock as of the close of business on the Record Date, at the address of such holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of the Record Date, or issued subsequent to the Record date, unless and until
the Distribution Date shall occur, the Rights will be evidenced by such certificates for the Common Stock and the registered holders
of the Common Stock shall also be the registered holders of the associated Rights. Until the earliest of the Distribution Date, the Expiration
Date (as such term is defined in Section 7(a) hereof) or the redemption of the Rights pursuant to Section 23 hereof, the
transfer of any certificates representing shares of Common Stock in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common Stock.
(c) Rights
shall be issued in respect of all shares of Common Stock which are issued (whether originally issued or from the Company’s treasury)
after the Record Date but prior to the earliest of the Distribution Date, the Expiration Date or the redemption of the Rights pursuant
to Section 23 hereof. Certificates representing such shares of Common Stock shall also be deemed to be certificates for Rights,
and shall bear a legend in substantially the following form: “This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Cohen & Company Inc. (the “Company”) and Computershare
Inc. (the “Rights Agent”) (or any successor Rights Agent), dated as of January 2, 2024 (the “Rights
Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal
offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The Rights Agent will mail to the holder of this certificate a copy
of the Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf
of such Person or by any subsequent holder, may become null and void.” With respect to such certificates containing the foregoing
legend, until the earlier of the (i) Distribution Date and (ii) the Expiration Date, the Rights associated with the Common
Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also
be the registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificates.
Section 4. Form of
Rights Certificates.
(a) The
Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall each be substantially
in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate (but which legends, summaries or endorsements do not affect the rights,
duties, liabilities or responsibilities of the Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as
may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions
of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date and
on their face shall entitle the holders thereof to purchase such number of one ten-thousandths of a share of Preferred Stock as shall
be set forth therein at the price set forth therein (such exercise price per one ten-thousandth of a share, the “Purchase Price”),
but the amount and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any
Rights Certificate issued pursuant to Section 3(a), Section 11(i) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a primary purpose or effect avoidance of Section 7(e) hereof,
and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence, provided that the Company has notified the Rights Agent in accordance with
Section 25 hereof of the applicability of this Section 4(b), shall contain (to the extent feasible) a legend in substantially
the following form: “The Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of
such Agreement.” The Company shall give written notice to the Rights Agent as soon as practicable after it becomes aware of the
existence and identity of any Acquiring Person or any Affiliate or Associate thereof.
Section 5. Countersignature
and Registration.
(a) The
Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman, its Chief Executive Officer,
its President or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal
or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by the Rights Agent, either manually or by facsimile or other electronic signature,
and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights Certificates had not ceased to be such officer of the Company;
and any Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following
the Distribution Date, the Rights Agent shall keep, or cause to be kept, at its office designated as the appropriate place for surrender
of Rights Certificates upon exercise or transfer, books for registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its
face by each of the Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer,
Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject
to the provisions of Section 4(b), Section 7(e), Section 14 and Section 27 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on the Expiration Date or the redemption of the rights pursuant
to Section 23 hereof, any Rights Certificate or Certificates may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like number of one ten-thousandths of a share of Preferred
Stock (or, following a Triggering Event, Common Stock, other securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitles such holder (or former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged, with
the form of assignment and certificate contained therein properly completed and duly executed and with all signatures guaranteed from
an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association (a “Signature
Guarantee”), at the office of the Rights Agent designated for such purpose. The Rights Certificates are transferable only on
the registry books of the Rights Agent. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have (i) properly completed
and duly signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate accompanied by a Signature
Guarantee, (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof and the Rights evidenced thereby as the Company shall reasonably request and (iii) paid a sum sufficient to
cover any tax or charge that might be imposed in connection with such transfer, split up, combination or exchange of any Rights Certificate
or Certificates as required by Section 9(e) hereof. Thereupon, the Rights Agent shall, subject to Section 4(b), Section 7(e),
Section 14 and Section 27 hereof, manually or by facsimile or electronic signature, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights
Certificates, the Company shall give the Rights Agent prompt written notice thereof and the Rights Agent shall not be obligated to deliver
any Rights Certificate unless and until it is satisfied that all such payments have been made, and the Rights Agent shall forward any
such sum collected by it to the Company or to such Persons as the Company specifies by written notice. The Rights Agent shall have no
duty or obligation to take any action with respect to a Rights holder under this Agreement that requires the payment by such Rights holder
of applicable taxes and/or charges unless and until the Rights Agent is satisfied that all such taxes and/or charges have been paid.
(b) Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement
to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise
of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject
to Section 7(e) and Section 27 hereof, the registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisability set forth in Section 9(c),
Section 11(a)(ii) and Section 23(a) hereof) in whole or in part at any time after the Distribution Date upon surrender
of the Rights Certificate, with the form of election to purchase and the certificate on the reverse side thereof properly completed and
duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose, accompanied by a Signature Guarantee
and such other documentation as the Rights Agent may reasonably request together with payment of the aggregate Purchase Price with respect
to the total number of one ten-thousandth of a share of Preferred Stock (or other securities, cash or other assets, as the case may be)
as to which such surrendered Rights are then exercisable, at or prior to the earliest of (i) the close of business on December 31,
2026 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof, (iii) the time at which all of the Rights (other than Rights that have become null and void pursuant to the provisions of
Section 7(e) hereof) are exchanged for Common Stock or other assets or securities as provided in Section 27 hereof, (iv) the
close of business on the effective date of the repeal of Section 382 or any successor statute if the Board of Directors of the Company
determines that this Agreement is no longer necessary or desirable for the preservation of Tax Benefits, and (v) the close of business
on the first day of a taxable year of the Company to which the Board of Directors of the Company determines that no Tax Benefits may
be carried forward (the earliest of (i) and (ii) and (iii) and (iv) and (v) being herein referred to as the
“Expiration Date”).
(b) The
Purchase Price for each one ten-thousandth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $100.00,
and shall be subject to adjustment from time to time as provided in Section 11 and Section 13(a) hereof and shall be payable
in accordance with paragraph (c) below.
(c) Upon
receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase properly completed and the certificate
duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per one ten-thousandth of a share
of Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased as set forth below and an
amount equal to any applicable tax or charge required to be paid hereunder, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for the total number of one ten-thousandths of a share of Preferred
Stock to be purchased and the Company hereby irrevocably authorizes and directs its transfer agent to comply with all such requests,
or (B) if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one ten-thousandths
of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby authorizes and directs its depositary
agent to comply with such request, (ii) when necessary to comply with this Agreement, requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to, or upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv) when necessary to comply with this Agreement, after receipt
thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate. The payment of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(ii) hereof) shall be made in cash or by certified bank check
or bank draft payable to the order of the Company. In the event that the Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent,
if and when necessary in order to comply with the terms of this Agreement. The Company reserves the right to require prior to the occurrence
of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock
would be issued.
(d) In
case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order
of, the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to insure that the provisions
of this Section 7(e) and Section 4(b) hereof are complied with, but neither the Company nor the Rights Agent shall
have any liability to any holder of Rights Certificates or other Person as a result of its failure to make any determinations with respect
to an Acquiring Person or any of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights or other securities upon the occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) properly completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request.
Section 8. Cancellation
and Destruction of Rights Certificates. All Rights Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to the
Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights Certificates
shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. At the expense of the Company, the Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Rights Certificates,
and in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation
and Availability of Capital Stock.
(a) The
Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred
Stock (and, following the occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock and/or other securities
or out of its authorized and issued shares held in its treasury), the number of shares of Preferred Stock (and, following the occurrence
of a Triggering Event, Common Stock and/or other securities) that, as provided in this Agreement, including Section 11(a)(ii) hereof,
will be sufficient to permit the exercise in full of all outstanding Rights.
(b) So
long as the shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national securities exchange, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) The
Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of
a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon exercise of the Rights has been determined
in accordance with Section 11(a)(ii) hereof, a registration statement under the Securities Act of 1933, as amended (the “Act”),
with respect to the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration statement
to become effective as soon as practicable after such filing, (iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the expiration of the Rights and (iv) take such other actions as may be
appropriate under, or to otherwise ensure compliance with, the federal securities laws in connection with the exercisability of the Rights.
The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or “blue sky”
laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of
time not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension has been rescinded. The Company shall promptly give copies of such public
announcements to the Rights Agent. In addition, if the Company shall determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability of the Rights until such time as a registration statement has
been declared effective, and the Company shall give prompt notice of such suspension to the Rights Agent in accordance with Section 25
hereof. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be permitted under applicable
law or a registration statement shall not have been declared effective.
(d) The
Company covenants and agrees that it will take all such action as may be necessary to ensure that all one ten-thousandths of a share
of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such shares (or Units) (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) The
Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for a number of one ten-thousandths
of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Rights Certificates
to a Person other than, or the issuance or delivery of a number of one ten-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver any certificates for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) in a name other than that of the registered holder upon
the exercise of any Rights until such tax shall have been paid (any such tax being payable by the holder of such Rights Certificate at
the time of surrender) or until it has been established to the satisfaction of the Company and the Rights Agent that no such tax is due.
Section 10. Preferred
Stock Record Date. Each Person in whose name any certificate for a number of one ten-thousandths
of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of such fractional shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or other securities,
as the case may be) transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment
of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the
number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided
in this Section 11.
(a) In
the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into
a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including
any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and
kind of shares of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the
shares of Preferred Stock or capital stock, as the case may be, issuable upon exercise of one Right. If an event occurs which would require
an adjustment under both this Section 11(a) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a) shall
be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(i) In
the event any Person shall become an Acquiring Person, then, promptly following the occurrence of such event, proper provision shall
be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right
to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number
of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number of one ten-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing
that product (which, following such first occurrence, shall thereafter be referred to as the “Purchase Price” for each Right
and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per
share of Common Stock on the date of such first occurrence (such number of shares, the “Adjustment Shares”).
(ii) In
the event that the number of shares of Common Stock which are authorized by the Company’s Charter but not outstanding, subscribed
for or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (i) of this Section 11(a), the Company shall (A) determine the
value of the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”), and (B) with respect
to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise
of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock
or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock, such as the
Preferred Stock, which the Board of Directors of the Company has deemed to have essentially the same value or economic rights as shares
of Common Stock (such shares of preferred stock being referred to as “Common Stock Equivalents”)), (4) debt securities
of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value
(less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the
advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company’s right of redemption pursuant
to Section 23(a) expires (the later of (x) and (y) being referred to herein as the “Section 11(a)(ii) Trigger
Date”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. For purposes of the preceding sentence, the term “Spread” shall mean the excess of (i) the
Current Value over (ii) the Purchase Price. If the Board of Directors of the Company determines in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30)
day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period,
as it may be extended, is herein called the “Substitution Period”). To the extent that the Company determines that
action should to be taken pursuant to the first and/or third sentences of this Section 11(a)(ii), the Company (1) shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (2) may suspend
the exercisability of the Rights until the expiration of the Substitution Period in order to seek such stockholder approval for such
authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(ii), the value of each Adjustment Share shall be the Current Market Price per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any Common Stock Equivalent shall be deemed
to equal the Current Market Price per share of the Common Stock on such date.
(b) In
case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five (45) calendar days after such record date) Preferred Stock
(or shares having the same rights, privileges and preferences as the shares of Preferred Stock (“Equivalent Preferred Stock”))
or securities convertible into Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or Equivalent Preferred
Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on
such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price, and the denominator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or Equivalent Preferred
Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of Preferred Stock or capital stock, as the case may be, issuable upon exercise of one Right. In case such subscription
price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by
or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In
case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing corporation) cash (other than a regular quarterly cash
dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including
any dividend payable in stock other than Preferred Stock) or evidences of indebtedness, or of subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current
Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value of the shares of Preferred Stock or capital stock, as
the case may be, issuable upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) (i) For
the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(ii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock
for the thirty (30) consecutive Trading Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(ii) hereof,
the Current Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share
of such Common Stock for the ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event
that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common
Stock, and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification
shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set
forth above, then, and in each such case, the Current Market Price shall be properly adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the NYSE American or, if the shares of Common Stock are not listed or admitted
to trading on the NYSE American, as reported in the principal consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities
Dealers Automated Quotation System (“NASDAQ”) or such other system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of Directors of the Company. If on any such date no market maker
is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board of Directors
of the Company shall be used. The term “Trading Day” shall mean a day on which the principal national securities exchange
on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly
held or not so listed or traded, Current Market Price per share shall mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(i) For
the purpose of any computation hereunder, the Current Market Price per share of Preferred Stock shall be determined in the same manner
as set forth above for the Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If
the Current Market Price per share of Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause (i) of this Section 11(d), the Current Market Price per
share of Preferred Stock shall be conclusively deemed to be an amount equal to 10,000 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this
Agreement) multiplied by the Current Market Price per share of the Common Stock. If neither the Common Stock nor the Preferred Stock
is publicly held or so listed or traded, Current Market Price per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement, the Current Market Price of a Unit shall be
equal to the Current Market Price of one share of Preferred Stock, divided by 10,000.
(e) Anything
herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share of capital stock or one-ten
millionth of a share of Preferred Stock, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustment, or (ii) the Expiration Date.
(f) If
as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital stock other than Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in
Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Section 7, Section 9, Section 10,
Section 13 and Section 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares.
(g) All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one ten-thousandths of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless
the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Section 11(b) and Section 11(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one ten-thousandths of
a share of Preferred Stock (calculated to the nearest one-ten millionth of a share of Preferred Stock) obtained by:
(i) multiplying
(x) the number of one ten-thousandths of a share covered by a Right immediately prior to this adjustment, by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(ii) The
Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one ten-thousandths of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the number of one ten-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number
of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made, and the Company shall promptly give a copy of such public
announcement to the Rights Agent. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(h), the Company shall,
as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be distributed
shall be issued and executed by the Company and countersigned and delivered by the Rights Agent in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.
(i) Irrespective
of any adjustment or change in the Purchase Price or the number of one ten-thousandths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price per one
ten-thousandth of a share and the number of one ten-thousandths of a share which were expressed in the initial Rights Certificates issued
hereunder.
(j) Before
taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the number of one ten-thousandths
of a share of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable such number of one
ten-thousandths of a share of Preferred Stock at such adjusted Purchase Price.
(k) In
any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised
after such record date the number of one ten-thousandths of a share of Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of one ten-thousandths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s
right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment.
The Company shall give prompt notice of such deferral to the Rights Agent in accordance with Section 25 hereof.
(l) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as and to the extent that in their good faith judgment the
Board of Directors of the Company shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the Current Market Price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made
by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.
(m) The
Company covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section 11(n) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(n) hereof), or (iii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets, cash flow
or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with
Section 11(n) hereof), if (x) at the time of or immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of the Person who constitutes, or would constitute, the “Principal Party” for purposes of
Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.
(n) The
Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.
(o) Anything
in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares, the number of Rights associated with each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event by a fraction the numerator which shall be the total number of shares
of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately following the occurrence of such event.
Section 12. Certificate
of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided
in Section 11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief, reasonably detailed statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent,
and with each transfer agent for the Preferred Stock and the Common Stock, a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the Distribution Date, to each holder of a certificate representing shares
of Common Stock) in accordance with Section 25 hereof. The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall have no duty or liability with respect to, and shall not be deemed to have knowledge
of, any adjustment unless and until it shall have received such a certificate.
Section 13. Consolidation,
Merger or Sale or Transfer of Assets, Cash Flow or Earning Power.
(a) In
the event that, following the Stock Acquisition Date, directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(n) hereof),
and the Company shall not be the continuing or surviving corporation of such consolidation or merger, (y) any Person (other than
a Subsidiary of the Company in a transaction which complies with Section 11(n) hereof) shall consolidate with, or merge with
or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection
with such consolidation or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other Person or cash or any other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one transaction or a series of related transactions, assets, cash flow
or earning power aggregating more than 50% of the assets, cash flow or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary of the Company in one or more transactions each of which complies
with Section 11(n) hereof), then, and in each such case, proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number
of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Purchase Price by the number of one ten-thousandths of a share of Preferred
Stock for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of such one ten-thousandths of a share
for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price
in effect immediately prior to such first occurrence of a Section 11(a)(ii) Event), and (2) dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred to as the “Purchase Price” for each Right and
for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per share
of the Common Stock of such Principal Party on the date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such steps (including, but not limited to, the reservation
of a sufficient number of shares of its Common Stock) in connection with the consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13 Event.
(b) “Principal
Party” shall mean:
(i) in
the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities into which shares of Common Stock of the Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such merger or consolidation; and
(ii) in
the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets, cash flow or earning power transferred pursuant to such transaction or transactions; provided, however,
that in any such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Stock of which is and has been so registered, “Principal Party” shall refer to such other Person; and (2) in
case such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stocks of two or more of which are and
have been so registered, “Principal Party” shall refer to whichever of such Persons is the issuer of the Common Stock having
the greatest aggregate market value.
(c) The
Company shall not consummate any such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number
of authorized shares of its Common Stock which have not been issued or reserved for issuance to permit the exercise in full of the Rights
in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will:
(i) prepare
and file a registration statement under the Act, with respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Expiration
Date; and
(ii) take
all such other action as may be necessary to enable the Principal Party to issue the securities purchasable upon exercise of the Rights,
including but not limited to the registration or qualification of such securities under all requisite securities laws of jurisdictions
of the various states and the listing of such securities on such exchanges and trading markets as may be necessary or appropriate; and
(iii) will
deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at any
time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
Section 14. Fractional
Rights and Fractional Shares.
(a) The
Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(o) hereof,
or to distribute Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE American
or, if the Rights are not listed or admitted to trading on the NYSE American, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to
trading, or if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such system then
in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights the fair value of the Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
(b) The
Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one
ten-thousandth of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional shares
of Preferred Stock (other than fractions which are integral multiples of one ten-thousandth of a share of Preferred Stock). In lieu of
fractional shares of Preferred Stock that are not integral multiples of one ten-thousandth of a share of Preferred Stock, the Company
may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one ten-thousandth of a share of Preferred Stock. For purposes of this Section 14(b),
the current market value of one ten-thousandth of a share of Preferred Stock shall be one ten-thousandth of the closing price of a share
of Preferred Stock (as determined pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following
the occurrence of a Triggering Event, the Company shall not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one (1) share of Common Stock. For purposes of this Section 14(c),
the current market value of one (1) share of Common Stock shall be the closing price of one (1) share of Common Stock (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the date of such exercise.
(d) The
holder of a Right by the acceptance of the Rights expressly waives his or her right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
(e) Whenever
a payment for fractional Rights or fractional shares is to be made by the Rights Agent, the Company shall (i) promptly prepare and
deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and/or
formulas utilized in calculating such payments and (ii) provide sufficient monies to the Rights Agent in the form of fully collected
funds to make such payments. The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with
respect to, and shall not be deemed to have knowledge of, any payment for fractional Rights or fractional shares under this Agreement
unless and until the Rights Agent shall have received such a certificate and such monies.
Section 15. Rights
of Action. All rights of action in respect of this Agreement, except the rights of action
vested in the Rights Agent under this Agreement, are vested in the respective registered holders of the Rights Certificates (and, prior
to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of the Common Stock), may, in such holder’s own behalf and for such holder’s own benefit,
enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of,
such holder’s right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement by the Company and shall be entitled
to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations
of the Company under this Agreement.
Section 16. Agreement
of Rights Holders. Every holder of a Right by accepting the same consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:
(a) prior
to the Distribution Date, the Rights will be transferable only in connection with the transfer of Common Stock;
(b) after
the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the
office of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates properly completed and duly executed, accompanied by a Signature Guarantee and such other documentation
as the Rights Agent may reasonably request;
(c) subject
to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the Person in whose
name a Rights Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or
the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be required to be affected by
any notice to the contrary;
(d) notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting
or otherwise restraining performance of such obligation; provided, however, the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
(e) this
Agreement may be supplemented or amended from time to time in accordance with the terms of Section 26 hereof; and
(f) the
power and authority delegated to the Board of Directors of the Company pursuant to this Agreement shall be exclusive and shall be as
set forth in Section 29 hereof.
Section 17. Rights
Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Rights Certificate
shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of one ten-thousandths of a share
of Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate,
as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 24 hereof), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning
the Rights Agent.
(a) The
Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder in accordance with a fee
schedule to be mutually agreed upon and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and
expenses and other disbursements incurred in the administration, preparation, delivery, amendment, negotiation and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement approved by the Company (such
approval not to be unreasonably withheld), cost or expense (including, without limitation, the reasonable fees and expenses of legal
counsel) that may be paid, incurred or suffered by it, or to which it may become subject, without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction), for any action taken, suffered or omitted to be taken by the
Rights Agent in connection with the execution, acceptance, administration, exercise and performance of its duties under this Agreement,
including but not limited to the costs and expenses of defending against any claim of liability in the premises, directly or indirectly,
or of enforcing its rights under this Agreement. The reasonable costs and expenses incurred in enforcing this right of indemnification
shall be paid by the Company to the extent that the Rights Agent is successful in so enforcing its right of indemnification. The provisions
of this Section 18 and Section 20 hereof shall survive the termination of this Agreement, the exercise, termination or expiration
of the Rights and the resignation, replacement or removal of the Rights Agent.
(b) The
Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by
it in connection with its acceptance and administration of this Agreement and the exercise and performance of its duties hereunder in
reliance upon any Rights Certificate or certificate for Common Stock or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person
or Persons, or otherwise upon the advice of counsel in the manner contemplated by Section 20(a) hereof. The Rights Agent shall
not be deemed to have knowledge of any event of which it was required to receive notice thereof hereunder, and the Rights Agent shall
be fully protected and shall incur no liability for failing to take action in connection therewith, unless and until such notice has
been given to the Rights Agent in accordance with Section 25 hereof.
Section 19. Merger
or Consolidation or Change of Name of Rights Agent.
(a) Any
Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting
from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to
the corporate trust, stock transfer or other shareholder services business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of
any of the parties hereto; but only if such Person would be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature
of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor
or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In
case at any time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
Section 20. Duties
of Rights Agent. The Rights Agent undertakes the duties and obligations expressly imposed
by this Agreement (and no implied duties or obligations) upon the following terms and conditions, by all of which the Company and the
holders of Rights Certificates, by their acceptance thereof, shall be bound:
(a) The
Rights Agent may consult with legal counsel (who may be legal counsel for the Company or an employee of the Rights Agent), and the advice
or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent, and the Rights Agent shall incur
no liability for or in respect of any action taken, suffered or omitted to be taken by it in the absence of bad faith and in accordance
with such advice or opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including,
without limitation, the identity of any Acquiring Person and the determination of Current Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, the Vice Chairman,
the Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full and complete authorization and protection
to the Rights Agent, and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken
in the absence of bad faith by it under the provisions of this Agreement in reliance upon such certificate.
(c) The
Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct (which gross negligence, bad
faith or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction).
Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, consequential
or incidental loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised
of the likelihood of such loss or damage and regardless of the form of the action. Notwithstanding anything to the contrary herein, any
liability of the Rights Agent under this Agreement shall be limited to the amount of fees (but not including any reimbursed costs) paid
by the Company to the Rights Agent during the twelve (12) months immediately preceding the event for which recovery from the Rights Agent
is being sought.
(d) The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its countersignature on such Rights Certificates), but all such statements
and recitals are and shall be deemed to have been made by the Company only.
(e) The
Rights Agent shall not have any liability for or be under any responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall it be responsible for any adjustment or calculation required under the provisions
of Section 11 or Section 13 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining
of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or Preferred Stock will, when so issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The
Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Vice Chairman, the Chief Executive Officer, the President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection
with its duties under this Agreement, and such instructions shall provide full authorization and protection to the Rights Agent and the
Rights Agent shall not be liable for and it shall incur no liability for or in respect of any action taken, suffered or omitted by it
in accordance with instructions of any such officer. Any application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to be taken, suffered or omitted to be taken by the Rights
Agent under this Agreement and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights
Agent shall be fully authorized and protected in relying upon the most recent instructions received from any such officer, and shall
not be liable for any action taken, suffered or omitted to be taken by the Rights Agent in accordance with a proposal included in any
such application on or after the date specified in such application unless, prior to taking any such action (or the effective date, in
the case of an omission), the Rights Agent has received written instructions in response to such application specifying the action to
be taken or omitted.
(h) The
Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person.
(i) The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself (through
its directors, officers or employees) or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable
for any act, omission, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company or any other Person
resulting from any such act, omission, default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct (which
gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of
a court of competent jurisdiction) in the selection and continued employment thereof.
(j) No
provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its rights if it reasonably believes that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably assured to it.
(k) If,
with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either not been properly completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise of
transfer without first consulting with the Company; provided, however that Rights Agent shall not be liable for any delays arising from
the duties under this Section 20(k).
(l) The
Rights Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating to any
registration statement filed with the Securities and Exchange Commission or this Agreement, including obligations under applicable regulation
or law.
(m) The
Rights Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any holder of Rights with
respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or responsibility
to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.
(n) The
Rights Agent shall have no responsibility to the Company, any holders of Rights or any other Person for interest or earnings on any moneys
held by the Rights Agent pursuant to this Agreement.
(o) The
Rights Agent shall not be required to take notice or be deemed to have notice of any event or condition hereunder, including any event
or condition that may require action by the Rights Agent, unless the Rights Agent shall be specifically notified in writing of such event
or condition by the Company, and all notices or other instruments required by this Agreement to be delivered to the Rights Agent must,
in order to be effective, be received by the Rights Agent as specified in Section 25 hereof, and in the absence of such notice so
delivered, the Rights Agent may conclusively assume no such event or condition exists.
(p) The
Rights Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature by
an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion Program or
other comparable “signature guarantee program” or insurance program in addition to, or in substitution for, the foregoing;
or (b) any law, act, regulation or any interpretation of the same.
(q) In
the event the Rights Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or
other communication, paper or document received by the Rights Agent hereunder, the Rights Agent, may (upon notice to the Company of such
ambiguity or uncertainty), in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable
in any way to Company, the holder of any Rights Certificate or any other Person for refraining from taking such action, unless the Rights
Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Rights
Agent.
Section 21. Change
of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days’ notice in writing mailed to the Company, and to each transfer agent
of the Common Stock and Preferred Stock, by registered or certified mail, and, if such resignation occurs after the Distribution Date,
to the registered holders of the Rights Certificates by first-class mail. In the event any transfer agency relationship in effect between
the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its
duties under this Agreement as of the effective date of such termination, and the Company shall be responsible for sending any required
notice. The Company may, in its sole discretion, remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail, and, if such resignation occurs after the Distribution Date, to the holders of
the Rights Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty
(30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be either
(a) a legal business entity organized and doing business under the laws of the United States or of any state of the United States,
in good standing, which is authorized under such laws to exercise corporate trust powers or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus
of at least $50,000,000 or (b) an Affiliate of a legal business entity described in clause (a) of this sentence. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose, but such predecessor Rights Agent shall not be required to make any additional expenditure or assume any additional liability
in connection with the foregoing. Not later than the effective date of any such appointment, the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and, if such appointment
occurs after the Distribution Date, mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to
give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance
of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption or expiration
of the Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, granted or awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Rights Certificates representing the appropriate number of Rights in connection with such
issuance or sale; provided, however, that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption
and Termination.
(a) The
Board of Directors of the Company may, at its option, at any time prior to the earlier of (i) the close of business on the tenth
day following the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the Record Date, the close of
business on the twentieth day following the Record Date), or (ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $0.001 per Right, as such amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as
the “Redemption Price”); provided, however, if the Board of Directors of the Company authorizes redemption of the
Rights in either of the circumstances set forth in clauses (i) and (ii) below, then such authorization shall require the concurrence
of a majority of the members of the Board of Directors of the Company: (i) such authorization occurs on or after the time a Person
becomes an Acquiring Person, or (ii) such authorization occurs on or after the date of a change (resulting from a proxy or consent
solicitation or an action by written consent of stockholders, whether or not made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act) in a majority of the directors in office at the commencement
of such solicitation, or prior to such written consent, if any Person who is a participant in such solicitation, or who signed such consent,
has stated (or, if upon the commencement of such solicitation, a majority of the Board of Directors of the Company has determined in
good faith) that such Person (or any of its Affiliates or Associates) intends to take, or may consider taking, any action which would
result in such Person becoming an Acquiring Person or which would cause the occurrence of a Triggering Event unless, concurrent with
such solicitation, such Person (or one or more of its Affiliates or Associates) is making a cash tender offer pursuant to a Schedule
TO (or any successor form) filed with the Securities and Exchange Commission for all outstanding shares of Common Stock not beneficially
owned by such Person (or by its Affiliates or Associates). Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company’s
right of redemption hereunder has expired. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based
on the “Current Market Price”, as defined in Section 11(d) hereof, of the Common Stock at the time of redemption)
or any other form of consideration deemed appropriate by the Board of Directors.
(b) Immediately
upon the action of the Board of Directors of the Company ordering the redemption of the Rights, evidence of which shall have been filed
with the Rights Agent and without any further action and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action
of the Board of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such notice to all such holders at each holder’s last address as it appears
upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the Redemption Price will be made.
Section 24. Notice
of Certain Events.
(a) In
case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company), or (ii) to offer to the holders of Preferred Stock rights or warrants
to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision
of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section 11(n) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of related transactions,
of more than 50% of the assets, cash flow or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(n) hereof),
or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate and the Rights Agent, to the extent feasible and in accordance with Section 25 hereof, a notice of
such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the shares of Preferred Stock for purposes of such action, and in the case of any such other action,
at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders
of the shares of Preferred Stock, whichever shall be the earlier.
(b) In
case any of the events set forth in Section 11(a)(ii) hereof shall occur, then, in any such case, (i) the Company shall
as soon as practicable thereafter give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate, other securities.
Section 25. Notices.
Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing by the Company with the Rights Agent) as follows:
Cohen &
Company Inc.
Cira Centre
2929 Arch Street, Suite 1703
Philadelphia, Pennsylvania
Attention: Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing
by the Rights Agent with the Company) as follows:
Computershare Inc.
150 Royall Street
Canton, MA 02021
Attention: Client Services
Facsimile: (781) 575-4210
Notices or
demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate (or,
if prior to the Distribution Date, to the holder of certificates representing shares of Common Stock) shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. Supplements
and Amendments. Prior to the Distribution Date and subject to the penultimate sentence of
this Section 26, the Company and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates representing shares of Common Stock. From and after the Distribution Date and subject
to the penultimate sentence of this Section 26, the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided, however, this Agreement may not be supplemented
or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when the Rights may be redeemed
at such time as the Rights are not then redeemable, or (B) any other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights. No supplement or amendment to this Agreement shall
be effective unless duly executed by the Rights Agent and the Company. Upon the delivery of a certificate from an appropriate officer
of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything contained in this Agreement to the contrary, (i) no supplement
or amendment shall be made which changes the Redemption Price, the Final Expiration Date, the Purchase Price or the number of one ten-thousandths
of a share of Preferred Stock for which a Right is exercisable and following the first occurrence of an event set forth in clauses (i) and
(ii) of the first proviso to Section 23(a) hereof, (ii) the Rights Agent may, but shall not be obligated to, enter
into any supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or immunities under this Agreement
and (iii) any supplement or amendment shall require the concurrence of a majority of the members of the Board of Directors of the
Company. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
Section 27. Exchange.
(a) The
Company may, at its option, at any time after the Stock Acquisition Date, upon resolution by the Board of Directors of the Company, exchange
all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to
the provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date of this Agreement (such exchange
ratio being hereinafter referred to as the “Section 27(a) Exchange Ratio”). Notwithstanding the foregoing,
the Company may not effect such exchange at any time after any Acquiring Person, together with all Affiliates and Associates of such
Acquiring Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.
(i) The
Company may, at its option, at any time after the Stock Acquisition Date, upon resolution by the Board of Directors of the Company, exchange
all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to
the provisions of Section 7(e) hereof) for Common Stock at an exchange ratio specified in the following sentence, as appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date of this Agreement. Subject to such
adjustment, each Right may be exchanged for that number of shares of Common Stock obtained by dividing the Adjustment Spread (as defined
below) by the then Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the earlier
of (i) the date on which any Person becomes an Acquiring Person or (ii) the date on which a tender or exchange offer by any
Person (other than an Exempted Person, the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person organized, appointed or established by the Company for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of Rule 14d-4(a) of the General Rules and Regulations under
the Exchange Act, if upon consummation thereof such Person would be the Beneficial Owner of 4.95% or more of the shares of Common Stock
then outstanding (such exchange ratio being the “Section 27(a)(ii) Exchange Ratio”). The “Adjustment
Spread” shall equal (x) the aggregate market price on the date of such event of the number of Adjustment Shares determined
pursuant to Section 11(a)(ii) minus (y) the Purchase Price.
(ii) Notwithstanding
anything contained in this Section 27(a) to the contrary, the Company may not exchange any Rights pursuant to this Section 27(a) unless
such exchange is approved by a majority of the members of the Board of Directors of the Company.
(b) Immediately
upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 27
and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such
holder multiplied by the Section 27(a) Exchange Ratio or Section 27(a)(ii) Exchange Ratio, as the case may be. The
Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the shares of Common Stock for Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which
have become null and void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In
the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 27, the Company shall make adequate provision to substitute,
to the extent that there are insufficient shares of Common Stock available (1) cash, (2) other equity securities of the Company,
(3) debt securities of the Company, (4) other assets or (5) any combination of the foregoing, having an aggregate value
per Right equal to (x) in the case of an exchange pursuant to Section 27(a), the then current per share market price (determined
pursuant to Section 11(d) hereof) of the Common Stock multiplied by the Section 27(a) Exchange Ratio and (y) in
the case of an exchange pursuant to Section 27(a)(ii), the Adjustment Spread, where such aggregate value has been determined by
a majority of the members of the Board of Directors of the Company, after receiving advice from a nationally recognized investment banking
firm. To the extent that the Company determines that any such substitution must be made, the Company shall provide, subject to Section 7(e) hereof,
that such substitution shall apply uniformly to all outstanding Rights.
(d) The
Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of the Rights Certificates
with regard to which such fractional shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the purposes of this paragraph (d), the current market value of a whole
share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant to the second sentence of Section 11(d) hereof)
for the Trading Day immediately prior to the date of the exchange pursuant to this Section 27.
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 29. Determinations
and Actions by the Board of Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board of Directors
of the Company (with, where specifically provided for herein, the concurrence of a majority of the members of the Board of Directors
of the Company) shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company (with, where specifically provided for herein, the concurrence of a majority of the
members of the Board of Directors of the Company) or to the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii) make
all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend this Agreement). Without limiting any of the rights and immunities of the Rights Agent, all such actions,
calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors of the Company (with, where specifically provided for herein, the concurrence
of a majority of the members of the Board of Directors of the Company) in good faith, shall (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board of Directors of
the Company to any liability to the holders of the Rights. The Rights Agent is entitled always to assume the Company’s Board of
Directors acted in good faith and shall be fully protected and incur no liability in reliance thereon.
Section 30. Benefits
of this Agreement. Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 31. Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to
be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that if such excluded provision
shall, in the reasonable judgment of the Rights Agent, adversely affect the rights, immunities, duties or obligations of the Rights Agent,
the Rights Agent shall be entitled to resign immediately upon written notice; provided, further, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the twentieth day following the date of such determination by
the Board of Directors of the Company.
Section 32. Governing
Law. This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of Maryland and for all purposes shall be governed by and construed in accordance with
the laws of such state applicable to contracts made and to be performed entirely within such state; provided, however, that all provisions
regarding the rights, duties, immunities and obligations of the Rights Agent shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed entirely within such state.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the same instrument. Delivery of an executed signature page of
the Agreement by facsimile or other customary means of electronic transmission (e.g., “pdf”) shall be effective as delivery
of a manually executed counterpart hereof.
Section 34. Descriptive
Headings. Descriptive headings of the several sections of this Agreement are inserted for
convenience on only and shall not control or affect the meaning or construction of any of the provisions hereof.
Section 35. Force
Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall
not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation,
acts of God, pandemics, epidemics, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of computer
facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties,
war or civil unrest.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of the day and year
first above written.
Attest: |
|
COHEN &
COMPANY INC. |
|
|
|
By: |
/s/
Douglas Listman |
|
By: |
/s/
Joseph W. Pooler, Jr. |
Name: |
Douglas Listman |
|
Name: |
Joseph W. Pooler, Jr. |
Title: |
Chief Accounting Officer |
|
Title: |
Executive Vice President, Chief
Financial Officer and Treasurer |
|
|
|
|
|
Attest: |
|
COMPUTERSHARE
INC.
as Rights Agent |
|
|
|
By: |
/s/ Erin Stephens |
|
By: |
/s/ Kathy Heagerty |
Name: |
Erin Stephens |
|
Name: |
Kathy Heagerty |
Title: |
Relationship Manager |
|
Title: |
Manager, Client Management |
ARTICLES SUPPLEMENTARY
OF
COHEN & COMPANY INC.
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
(PAR VALUE $0.001 PER SHARE)
Cohen &
Company Inc., a Maryland corporation, having its principal office at Cira Centre, 2929 Arch Street, 17th Floor, Philadelphia,
Pennsylvania 19104 (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
First,
pursuant to the authority expressly vested in the board of directors of the Corporation (the “Board of Directors”)
by the charter of the Corporation (the “Charter”), the Board of Directors on December 21, 2009 adopted a resolution
which duly classified 10,000 shares of Preferred Stock, par value $0.001 per share, into a series of 10,000 shares of Preferred Stock,
par value $0.001 per share, designated as “Series C Junior Participating Preferred Stock,” and has provided for
the issuance of shares of such series.
Second,
no shares of the Series C Junior Participating Preferred Stock of the Corporation are issued or outstanding.
Third,
on December 21, 2009, the Board of Directors, in accordance with the provisions of Section 2-208 of the Maryland General Corporation
Law and the authority expressly vested in the Board of Directors by the Charter, duly adopted the resolution adopting the Articles Supplementary
of Cohen & Company Inc. for the Series C Junior Participating Preferred Stock.
Fourth,
pursuant to Section 2-208 of the Maryland General Corporation Law, stockholder approval is not required for the adoption of the
Articles Supplementary of Cohen & Company Inc. for the Series C Junior Participating Preferred Stock, and such stockholder
approval has not been obtained.
Fifth,
the terms of the Series C Junior Participating Preferred Stock, as set by the Board of Directors, including the preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption, if
any, are as follows:
Section 1. Designation
and Amount. The shares of such series shall be designated as “Series C Junior
Participating Preferred Stock” and the number of shares constituting such series shall be 10,000.
Section 2. Dividends
and Distributions.
(a) The
holders of shares of Series C Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June,
September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series C Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $0.001 or (b) subject
to the provision for adjustment hereinafter set forth, 10,000 times the aggregate per share amount of all cash dividends, and 10,000
times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable
in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on
the Common Stock, par value $0.01 per share, of the Corporation (the “Common Stock”) since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series C Junior Participating Preferred Stock. In the event the Corporation shall at any time after December 21,
2009 (the “Rights Declaration Date”) (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series C Junior Participating Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to such event.
(b) The
Corporation shall declare a dividend or distribution on the outstanding shares of Series C Junior Participating Preferred Stock
as provided in paragraph (a) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$0.001 per share on the outstanding shares of Series C Junior Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series C Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series C Junior Participating Preferred Stock, unless the
date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of Series C Junior Participating Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series C Junior Participating Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders of shares of Series C Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than thirty (30)
days prior to the date fixed for the payment thereof.
Section 3. Voting
Rights. The holders of shares of Series C Junior Participating Preferred Stock shall
have the following voting rights:
(a) Subject
to the provision for adjustment hereinafter set forth, each share of Series C Junior Participating Preferred Stock shall entitle
the holder thereof to 10,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares of Series C Junior Participating Preferred Stock
were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Except
as otherwise provided herein or by law, the holders of shares of Series C Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(c) If
at any time dividends on any Series C Junior Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”)
which shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series C Junior Participating Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each default period, all holders of Preferred Stock (including holders of the Series C
Junior Participating Preferred Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon, voting
as a class, irrespective of series, shall have the right to elect two (2) directors.
(i) During
any default period, such voting right of the holders of Series C Junior Participating Preferred Stock may be exercised initially
at a special meeting called pursuant to subparagraph (iii) of this Section 3(c) or at any annual meeting of stockholders,
and thereafter at annual meetings of stockholders, provided that such voting right shall not be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the holders
of Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as
a class, to elect directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) directors
or, if such right is exercised at an annual meeting, to elect two (2) directors. If the number which may be so elected at any special
meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the
number of directors as shall be necessary to permit the election by them of the required number. After the holders of the Preferred Stock
shall have exercised their right to elect directors in any default period and during the continuance of such period, the number of directors
shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of
any equity securities ranking senior to or pari passu with the Series C Junior Participating Preferred Stock.
(ii) Unless
the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect directors, the
Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total
number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders
of Preferred Stock, which meeting shall thereupon be called by the President, a Vice-President or the Secretary of the Corporation. Notice
of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this paragraph (c)(iii) shall
be given to each holder of record of Preferred Stock by mailing a copy of such notice to such holder at such holder’s last address
as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than twenty (20) days and not
later than sixty (60) days after such order or request, or in default of the calling of such meeting within sixty (60) days after such
order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of this paragraph (c)(iii),
no such special meeting shall be called during the period within sixty (60) days immediately preceding the date fixed for the next annual
meeting of the stockholders.
(iii) In
any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled
to elect the whole number of directors until the holders of Preferred Stock shall have exercised their right to elect two (2) directors
voting as a class, after the exercise of which right (x) the directors so elected by the holders of Preferred Stock shall continue
in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any
vacancy in the Board of Directors may (except as provided in paragraph (c)(ii)of this Section 3) be filled by vote of a majority
of the remaining directors theretofore elected by the holders of the class of stock which elected the director whose office shall have
become vacant. References in this paragraph (c) to directors elected by the holders of a particular class of stock shall include
directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence.
(iv) Immediately
upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect directors shall cease,
(y) the term of any directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of directors
shall be such number as may be provided for in the Charter or by-laws of the Corporation irrespective of any increase made pursuant to
the provisions of paragraph (c)(ii)of this Section 3 (such number being subject, however, to change thereafter in any manner provided
by law or in the Charter or by-laws of the Corporation). Any vacancies in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority of the remaining directors.
(d) Except
as set forth herein, holders of Series C Junior Participating Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain
Restrictions.
(a) Whenever
quarterly dividends or other dividends or distributions payable on the Series C Junior Participating Preferred Stock as provided
in Section 2 hereof are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared,
on shares of Series C Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare
or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series C Junior Participating Preferred
Stock;
(ii) declare
or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series C Junior Participating Preferred Stock, except dividends paid ratably on the Series C
Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem
or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series C Junior Participating Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series C Junior Participating Preferred Stock;
or
(iv) purchase
or otherwise acquire for consideration any shares of Series C Junior Participating Preferred Stock, or any shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series C Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock
of the Corporation unless the Corporation could, under paragraph (a) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired
Shares. Any shares of Series C Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation,
Dissolution or Winding Up.
(a) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series C Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of Series C Junior Participating Preferred Stock shall
have received an amount equal to $100,000 per share of Series C Junior Participating Preferred Stock, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “Series C Liquidation
Preference”). Following the payment of the full amount of the Series C Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series C Junior Participating Preferred Stock unless, prior thereto, the holders of shares
of Common Stock shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained by
dividing (i) the Series C Liquidation Preference by (ii) 10,000 (as appropriately adjusted as set forth in subparagraph
(c) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii), the “Adjustment Number”). Following the payment of the full amount of the Series C Liquidation
Preference and the Common Adjustment in respect of all outstanding shares of Series C Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series C Junior Participating Preferred Stock and holders of shares of Common Stock shall receive
their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect
to such Preferred Stock and Common Stock, on a per share basis, respectively.
(b) In
the event, however, that there are not sufficient assets available to permit payment in full of the Series C Liquidation Preference
and the liquidation preferences of all other series of Preferred Stock, if any, which rank on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series C Junior Participating Preferred Stock, then such remaining assets shall
be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common Stock.
(c) In
the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation,
Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any
other property, then in any such case the shares of Series C Junior Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 10,000 times the
aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series C Junior Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 8. No
Redemption. The shares of Series C Junior Participating Preferred Stock shall not be
redeemable.
Section 9. Amendment.
The Charter shall not be further amended in any manner which would materially alter or change the powers, preferences or special rights
of the Series C Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders
of a majority or more of the outstanding shares of Series C Junior Participating Preferred Stock, voting separately as a class.
Section 10. Fractional
Shares. Series C Junior Participating Preferred Stock may be issued in fractions of
a share which shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of holders of Series C Junior Participating Preferred Stock.
IN
WITNESS WHEREOF, Cohen & Company Inc. has caused these presents to be signed in its name and on its behalf by its
President and attested to by its Secretary as of this 21st day of December, 2009.
ATTEST: |
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COHEN & COMPANY INC. |
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By: |
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By: |
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Rachael Fink |
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Joseph W. Pooler, |
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Senior Vice President, General Counsel and Secretary |
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Jr.Executive Vice President and Chief Financial Officer |
CERTIFICATE
THE
UNDERSIGNED, the Executive Vice President and Chief Financial Officer of Cohen & Company Inc. (the “Corporation”),
who executed on behalf of the Corporation the foregoing Articles Supplementary of which this certificate is made a part, hereby acknowledges
in the name and on behalf of the Corporation the foregoing Articles Supplementary to be the corporate act of the Corporation and hereby
certifies that to the best of his knowledge, information and belief the matters and facts set forth therein with respect to the authorization
and approval thereof are true in all material respects under the penalties of perjury.
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Joseph W. Pooler, Jr. |
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Executive Vice President and Chief Financial Officer |
Exhibit B
[Form of Rights Certificate]
Certificate
No. R- |
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Rights |
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NOT EXERCISABLE AFTER DECEMBER 31, 2026 OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID IN THE CIRCUMSTANCES SPECIFIED IN Section 7(e) OF SUCH AGREEMENT.
Rights Certificate
COHEN & COMPANY INC.
This certifies that [ ], or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement, dated as of January 2, 2024 (the “Rights Agreement”), between Cohen & Company
Inc., a Maryland corporation (the “Company”), and Computershare Inc., a Delaware corporation (the “Rights
Agent”), to purchase from the Company at any time prior to 5:00 P.M. (New York City time) on December 31, 2026 at
the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one ten- thousandth of a fully
paid, non-assessable share of Series C Junior Participating Preferred Stock (the “Preferred Stock”) of the Company,
at a purchase price of $100.00 per one ten-thousandth of a share (the “Purchase Price”), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The number of Rights evidenced
by this Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price as of January 2, 2024 based on the Preferred Stock as constituted
at such date. The Company reserves the right to require prior to the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.
Upon the
occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate,
or (iii) under certain circumstances specified in the Rights Agreement, a transferee of a person who, after such transfer, became
an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities, which may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a
part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and are also available upon written request
to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of one ten-thousandths
of a share of Preferred Stock as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption price of $0.001 per Right at any time prior to the earlier
of the close of business on (i) the tenth day following the Stock Acquisition Date (as such time period may be extended pursuant
to the Rights Agreement), and (ii) the Final Expiration Date. In addition, the Rights may be exchanged, in whole or in part, for
shares of the Common Stock, or shares of preferred stock of the Company having essentially the same value or economic rights as such
shares. Immediately upon the action of the Board of Directors of the Company authorizing any such exchange, and without any further action
or any notice, the Rights (other than Rights which are not subject to such exchange) will terminate and the Rights will only enable holders
to receive the shares issuable upon such exchange. Under certain circumstances set forth in the Rights Agreement, the decision to redeem
the Rights shall require the concurrence of a majority of the members of the Board of Directors of the Company.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one ten-thousandth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made,
as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred Stock or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give consent to or withhold consent from any corporate action,
or, to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _____________________.
Attest: |
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COHEN &
COMPANY INC. |
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By: |
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By: |
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Name: |
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Name: |
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Title: |
Secretary |
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Title: |
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Countersigned:
Attest: |
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COMPUTERSHARE
INC., as Rights Agent |
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By: |
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By: |
Authorized Signature |
Name: |
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Name: |
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Title: |
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Title: |
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[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)
FOR VALUE RECEIVED ______________ hereby sells, assigns and transfers
unto ______________ (Please print name and address of transferee) this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Attorney, to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: |
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Signature: |
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Signature Guaranteed*: |
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* Signatures must be guaranteed by a participant in a Medallion Signature
Guarantee Program at a guarantee level satisfactory to the Rights Agent. A notary public is not sufficient.
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
| (1) | this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred
by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate
of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement); |
| (2) | after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who
is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person. |
Dated: |
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Signature: |
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Signature Guaranteed*: |
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* Signatures must be guaranteed by a participant in a Medallion Signature
Guarantee Program at a guarantee level satisfactory to the Rights Agent. A notary public is not sufficient.
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by
the Rights Certificate.)
To: COHEN &
COMPANY INC.:
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Rights Certificate to purchase the shares of Preferred Stock issuable upon the exercise of the Rights (or
such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered to:
Please insert
social security
or other identifying number ________________________
(Please print
name and address): |
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If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:
Please insert
social security or other identifying number
(Please print name and
address): |
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Dated: |
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Signature: |
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Signature Guaranteed*:
* Signatures must be guaranteed by a participant in a Medallion Signature
Guarantee Program at a guarantee level satisfactory to the Rights Agent. A notary public is not sufficient.
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
| (2) | after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person
who is, was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. |
Dated: |
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Signature: |
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Signature Guaranteed*: |
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* Signatures must be guaranteed by a participant in a Medallion Signature
Guarantee Program at a guarantee level satisfactory to the Rights Agent. A notary public is not sufficient.
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
Exhibit C
SUMMARY
OF RIGHTS TO PURCHASE SERIES C JUNIOR
PARTICIPATING PREFERRED STOCK
On January 2, 2024, the Board of Directors
of Cohen & Company Inc. (the “Company”) approved the entry into a Section 382 Rights Agreement (the
“Rights Agreement”) between the Company and Computershare Inc. (the “Rights Agent”). The Rights
Agreement provides for a distribution of one preferred stock purchase right (a “Right”) for each share of Common Stock,
par value $0.01 per share, of the Company (the “Common Stock”) outstanding to stockholders of record at the close
of business on January 16, 2024 (the “Record Date”). Each Right entitles the registered holder to purchase from
the Company a unit (a “Unit”) consisting of one ten-thousandth of a share of Series C Junior Participating Preferred
Stock, par value $0.001 per share (the “Preferred Stock”), at a Purchase Price of $100.00 per Unit (the “Purchase
Price”), subject to adjustment. The description and terms of the Rights are set forth in the Rights Agreement.
The Board of Directors of the Company adopted
the Rights Agreement in an effort to protect stockholder value by attempting to protect against a possible limitation on the Company’s
ability to use its net operating loss and net capital loss carryforwards (the “deferred tax assets”) to reduce potential
future federal income tax obligations. The Company has experienced substantial operating losses and capital losses, and under the Internal
Revenue Code of 1986, as amended (the “Code”), and rules promulgated by the Internal Revenue Service, the Company
may “carry forward” these losses in certain circumstances to offset any current and future earnings and thus reduce the Company’s
federal income tax liability, subject to certain requirements and restrictions. To the extent that the deferred tax assets do not otherwise
become limited, the Company believes that it will be able to carry forward a significant amount of deferred tax assets, and therefore
these deferred tax assets could be a substantial asset to the Company. However, if the Company experiences an “Ownership Change,”
as defined in Section 382 of the Code, its ability to use the deferred tax assets will be substantially limited and/or delayed,
and the timing of the usage of the deferred tax assets could be substantially delayed, which could therefore significantly impair the
value of those assets.
Initially, the Rights will be attached to all
Common Stock certificates representing shares then outstanding, and no separate Rights Certificates will be distributed. Subject to certain
exceptions specified in the Rights Agreement, the Rights will separate from the Common Stock and a “Distribution Date” will
occur upon the earlier of (i) ten (10) days following a public announcement that a person or group of affiliated or associated
persons has become an “Acquiring Person” (as defined below) (the “Stock Acquisition Date”) or (ii) ten
(10) business days following the commencement of a tender offer or exchange offer that would result in a person or group becoming
an Acquiring Person. “Acquiring Person” means any person who or which, together with all affiliates and associates of such
person, shall be the beneficial owner of 4.95% or more of the shares of Common Stock then outstanding, excluding the Company and any
“Exempted Person” (defined below). Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates after
the Record Date will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of
any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented
by such certificate.
Any person who, together with all affiliates and
associates of such person, is the beneficial owner of Common Stock, options and/or other securities exercisable for shares of Common
Stock representing 4.95% or more of the shares of Common Stock outstanding on January 2, 2024 or is set forth in the Rights Agreement
as such, will be an “Exempted Person.” However, any such person will no longer be deemed to be an Exempted Person and shall
be deemed an Acquiring Person if such person, together with all affiliates and associates of such person, becomes the beneficial owner
(and so long as such person continues to be the beneficial owner of 4.95% or more of the then outstanding shares of Common Stock), of
additional securities representing any additional shares of Common Stock, except (x) pursuant to equity compensation awards granted
to such person by the Company or options or warrants outstanding and beneficially owned by such person as of January 2, 2024, or
as a result of an adjustment to the number of shares of Common Stock represented by such equity compensation award pursuant to the terms
thereof or (y) as a result of a stock split, stock dividend or the like. In addition, any person who, together with all affiliates
and associates of such person, becomes the beneficial owner of Common Stock and/or other securities exercisable for shares of Common
Stock representing 4.95% or more of the shares of Common Stock then outstanding as a result of a purchase by the Company or any of its
subsidiaries of shares of Common Stock will also be an “Exempted Person.” However, any such person will no longer be deemed
to be an Exempted Person and will be deemed to be an Acquiring Person if such person, together with all affiliates and associates of
such person, becomes the beneficial owner, at any time after the date such person became the beneficial owner of 4.95% or more of the
then outstanding shares of Common Stock, of additional securities representing any additional shares of Common Stock, except if such
additional securities are acquired (x) pursuant to the exercise of options or warrants to purchase Common Stock outstanding and
beneficially owned by such person as of the date such person became the beneficial owner of 4.95% or more of the then outstanding shares
of Common Stock or as a result of an adjustment to the number of shares of Common Stock for which such options or warrants are exercisable
pursuant to the terms thereof, or (y) as a result of a stock split, stock dividend or the like. In addition, any person who, together
with all affiliates and associates of such person, is the beneficial owner of Common Stock and/or other securities exercisable for shares
of Common Stock representing 4.95% or more of the shares of Common Stock outstanding, and whose beneficial ownership would not, as determined
by the Board of Directors of the Company in its sole discretion, jeopardize or endanger the availability of the Company of its deferred
tax assets, will be an “Exempted Person.” However, any such person will cease to be an Exempted Person if (x) such person
ceases to beneficially own 4.95% or more of the shares of the then outstanding Common Stock or (y) the Board of Directors of the
Company, in its sole discretion, makes a contrary determination with respect to the effect of such person’s beneficial ownership
(together with all affiliates and associates of such person) with respect to the availability to the Company of its deferred tax assets.
A purchaser, assignee or transferee of the shares of Common Stock (or options or warrants exercisable for Common Stock) from an Exempted
Person will not thereby become an Exempted Person, except that a transferee from the estate of an Exempted Person who receives Common
Stock as a bequest or inheritance from an Exempted Person shall be an Exempted Person so long as such transferee continues to be the
beneficial owner of 4.95% or more of the then outstanding shares of Common Stock.
v3.23.4
Cover
|
Jan. 02, 2024 |
Cover [Abstract] |
|
Document Type |
8-K
|
Amendment Flag |
false
|
Document Period End Date |
Jan. 02, 2024
|
Entity File Number |
1-32026
|
Entity Registrant Name |
Cohen
& Co Inc.
|
Entity Central Index Key |
0001270436
|
Entity Tax Identification Number |
16-1685692
|
Entity Incorporation, State or Country Code |
MD
|
Entity Address, Address Line One |
Cira Centre
|
Entity Address, Address Line Two |
2929 Arch Street, Suite 1703
|
Entity Address, City or Town |
Philadelphia
|
Entity Address, State or Province |
PA
|
Entity Address, Postal Zip Code |
19104
|
City Area Code |
215
|
Local Phone Number |
701-9555
|
Written Communications |
false
|
Soliciting Material |
false
|
Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Title of 12(b) Security |
Common Stock, par value $0.01 per share
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Trading Symbol |
COHN
|
Security Exchange Name |
NYSE
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Entity Emerging Growth Company |
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