Is the issuance of a second class of lower voting stock a violation of NASDAQs Voting Rights Rule?
Generally, the issuance of a second class of lower voting stock is permitted under NASDAQ’s Voting Rights Rule. However, the higher voting class of security generally must not be eligible to convert into the lower-voting class, and the creation of the lower voting class cannot be accompanied by an exchange offer. This is because the higher voting class could potentially cause public shareholders to be disenfranchised if public shareholders convert to the lower voting class while the insiders retain the greater voting security.
