R 432.1407 Required charter provisions.

Rule 407.(1) A person covered by this part that applies for or holds a casino license shall include all of the following provisions, or similar provisions approved by the board under subsection (c), in its organizational documents: "The [corporation] [partnership] [limited liability company] shall not issue more than five percent (5%) of any voting securities or other voting interests to a person except in accordance with the provisions of the Michigan Gaming Control and Revenue Act, MCL 432.201 et seq. and the rules promulgated thereunder. (a) The issuance of any voting securities or other voting interests in violation thereof shall be void and such voting securities or other voting interests shall be deemed not to be issued and outstanding until one (1) of the following occurs: (1) The [corporation] [partnership] [limited liability company] shall cease to be subject to the jurisdiction of the board. (2) The board shall, by affirmative action, validate said issuance or waive any defect in issuance. (b) No voting securities or other voting interests issued by the [corporation] [partnership] [limited liability company] and no interest, claim, or charge of more than five percent (5%) therein or thereto shall be transferred in any manner whatsoever except in accordance with the provisions of the act and rules promulgated thereunder. Any transfer in violation thereof shall be void until one (1) of the following occurs: (1) The [corporation] [partnership] [limited liability company] shall cease to be subject to the jurisdiction of the board. (2) The board shall, by affirmative action, validate said transfer or waive any defect in said transfer. (c) If the board at any time determines that a holder of voting securities or other voting interests of this [corporation] [partnership] [limited liability company] shall be denied the application for transfer, then the issuer of such voting securities or other voting interests may, within thirty (30) days after the denial, purchase such voting securities or other voting interests of such denied applicant at the lesser of: (1) the market price of the ownership interest; or (2) the price at which the applicant purchased the ownership interest; unless such voting securities or other voting interests are transferred to a suitable person (as determined by the board) within thirty (30) days after the denial of the application for transfer of ownership. (d) Until such voting securities or other voting interests are owned by persons found by the board to be suitable to own them, the following restrictions must be followed: (1) The [corporation] [partnership] [limited liability company] shall not be required or permitted to pay any dividend or interest with regard to the voting securities or other voting interests. (2) The holder of such voting securities or other voting interests shall not be entitled to vote on any matter as the holder of the voting securities or other voting interests, and such voting securities or other voting interests shall not for any purposes be included in the voting securities or other voting interests of the [corporation] [partnership] [limited liability company] entitled to vote. (3) The [corporation] [partnership] [limited liability company] shall not pay any remuneration in any form to the holder of the voting securities or other voting interests as provided in this paragraph." (2) A person covered by this part that applies for a casino license must be in compliance with subrule (1) of this rule before the board issues the person a license. (3) A person who applies for or holds a casino license must submit charter provisions similar to the provisions in subrule (1) of this rule to the board not less than 30 days before the public offering for approval. The board shall notify the person, in writing, that the charter provisions are acceptable.