Classified Stock (Noun)
Meaning
Common stock classified as A or B where A has certain advantages (e.g., voting power) that B does not.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The company's classified stock structure, with Class A and Class B shares, was designed to concentrate voting power in the hands of the founders.
- The board of directors proposed a new classified stock plan, which would create a third class of shares with limited voting rights.
- Under the company's charter, Class A shares of classified stock were entitled to ten votes per share, while Class B shares had only one vote per share.
- The investor was hesitant to purchase Class B shares of the company's classified stock, knowing they would have limited influence over major decisions.
- The classified stock structure was put in place to prevent hostile takeovers, by giving the Class A shareholders, who were mostly company insiders, control over the majority of the voting power.