Covers use of two or more classes of common stock

• With disparate voting rights

Often used in carve-out IPOs of subsidiaries

• Parent companies can keep a class of high-vote common

• While selling low- or no-vote common stock to public

• While parent would have voting control even without use of dual class stock, keeping more than 80% of the voting rights can preserve parent's ability to do a later tax-free spin-off

• As test for a spin-off is based on voting power not on  common equity

Often used by family-controlled business

• To preserve family's voting control

DGCL §151(a)

In re Tele-Communications (Del Ch 2005)

Kaman Corp 2005

Dow Jones & Co 2005

Delaware General Corporation Law