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objectionable action provision and the rights held by the holders
of the stock, options, and warrants involved in the cases and
rulings on which petitioners rely. Contrary to petitioners'
claim, the director objectionable action provision did not give
the Mitsui group merely a contingent right to acquire additional
voting power over future actions of Alumax. That provision gave
the Mitsui group the legally enforceable right during the period
at issue to (1) negate the exercise of the power of the Alumax
board on any director nonrestricted matter,28 which the Mitsui
group believed could materially and adversely affect the value of
its investment in Alumax and to which one of the class B direc-
tors whom it elected objected and (2) permit a panel of arbitra-
tors to decide whether or not that board's exercise of its power
on any such matter was to become effective.29 Consequently,the
28 We have found that the director objectionable action provi-
sion applied only to director nonrestricted matters on which the
directors voted in the aggregate, and not by class. That is
because any board action that required a class vote of the Alumax
directors required, inter alia, an affirmative vote of the
majority of the class B directors. Since there were only two
class B directors, any such board action required the approval of
both of those directors and could not be taken over the objection
of either one of those directors.
29 Petitioners contend that the class C directors were not
likely to take any action that would trigger the rights of the
Alumax class B common stock under the director objectionable
action provision and that the Mitsui group was not likely to
exercise its rights under that provision. As we view it, the
essence of petitioners' contention is that the director objec-
tionable action provision is, in effect, a meaningless provision.
We disagree. Moreover, petitioners concede on brief that that
(continued...)
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