What is a “time-phased” voting plan?
A “time-phased” voting plan restricts the voting power of shareholders based on the length of time the shares have been held. These plans usually involve a recapitalization in which all shareholders at the time of the recapitalization receive multiple votes per share for their holdings. Any investor that purchases stock subsequent to the commencement of the plan receives one vote per share unless and until that investor holds the stock for a stated period of time (usually three or four years). NASDAQ’s voting rights rule (Listing Rule 5640 and IM-5640) prohibits time-phased voting plans.
