SECTION 778-1

During the formation of the company or during the course of its useful life, preferred shares may be issued, with or without voting rights, coupled with specific rights of any nature, either temporarily or permanently. Such rights shall be defined by the articles of association in accordance with articles 543, 623 and 751 above. A voting right equal to the double of the one granted to other shares may be conferred to preferred shares. A voting right may be set up for a specified term or one that is ascertainable. It may be suspended for a specified or ascertainable period, or may be canceled. Preferred shares without voting right may not represent more than half of the stated capital, and in companies whose shares are admitted to trading on a stock exchange, more than a quarter of the stated capital. Any issue that has the effect of increasing the proportion beyond this limit may be cancelled. By exception to articles 573 and 822-1of this uniform Act, preferred shares without voting right at issue to which is attached a limited right to dividends, reserves, or distribution of assets in the event of liquidation, are deprived of pre-emptive subscription right for any capital increase in cash, subject to contrary provisions of the articles of association.