Shopify To Issue Founder Share To Lütke; Board Approves Proposed 10-for-1 Split

(RTTNews) - Shopify Inc. (SHOP) announced proposed updates to its governance structure to align it more closely with the company's long-term market opportunities. The proposal will also strengthen the foundation for long-term stewardship by Lütke. The company will seek shareholder approval to implement the proposed amendments to its articles of incorporation at its upcoming Annual and Special Meeting of shareholders to be held on June 7, 2022. The Board has unanimously recommended that shareholders vote in favor of the proposal.

Under the terms of the proposal, Shopify will authorize and issue a new class of share, the founder share, to Lütke. The founder share will provide Lütke with a variable number of votes that, when combined with the class B shares beneficially owned by him, his immediate family and his affiliates, will represent 40% of the total voting power attached to all of the company's outstanding shares. The company's existing Class A and Class B shares will remain outstanding and their terms will not be amended as part of the proposal. Following the approval of the proposal by shareholders, Shopify Director John Phillips will convert all class B shares held by Klister Credit Corp., a company owned by him and Catherine Phillips, into class A shares.

Shopify separately announced that its Board has approved a proposed 10-for-1 split of the company's class A and class B shares to be effected through a separate amendment to its articles of incorporation. If shareholder approval is received, shareholders of record as of the close of business on June 22, 2022 will receive, after the close of business on June 28, 2022, nine additional class A shares or class B shares, as applicable, for every one share held.