Shopify Inc. is restructuring to ensure its founder and CEO Tobi Lutke maintains his voting power. The change will also provide sunset provisions that prevent him from transferring that power. Shopify will issue Lutke a founder shares that will have a variable number of votes that will add up to 40 per cent of the total voting power.
The founder share is not transferable and will not be effective if Lutke no longer serves as an executive officer, board member or consultant. Or if Lutke, his immediate family and his affiliates no longer hold a number of class A and class B shares equal to at least 30 per cent of the class B shares they currently hold.
In the event of a sunset of the founder share, Lutke will have to convert his remaining class B shares into class A shares. The plan will require the approval by a two-thirds majority vote cast by Shopify shareholders voting together. The company is also proposing a 10-for-one split of its class A and class B shares.
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