supermajority provision

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Supermajority Provision

In a publicly-traded company's bylaws, a provision mandating that the consent of more than a simple majority of shareholders is needed for certain actions. These actions, and the specific percentage needed for consent, are outlined in the bylaws and are often used as an anti-takeover measure. For example, a company may require that two-thirds of shareholders must approve of a merger or acquisition. Supermajority provisions exist primarily to ensure the company's independent survival, but they may limit the board of directors' authority in even a friendly takeover. See also: Board-out clause.

supermajority provision

A part of a corporation's by-laws that requires an unusually high percentage of stockholder votes in order to bring about certain changes. For example, a firm may require that 80% of shares approve a resolution to call a meeting of stockholders for any purpose other than the annual meeting. This provision makes a corporate takeover more difficult. See also board-out clause.
References in periodicals archive ?
Eco Telecom has also requested that, in connection with such acquisition, the court treat the quorum and super-majority provisions of VimpelCom's charter as inapplicable.
In 1988, for example, only 24% reported having super-majority provisions or shareholders' rights plans, less than half the prevalence noted above.
Keith Kennedy, president and chief executive officer of Watkins-Johnson Company said, "We are pleased that shareowners voted in favor of abolishing the outdated shareowner super-majority provisions from WJ's charter and bylaws.
The decision was made under the super-majority provisions of VimpelCom's charter, which require the affirmative vote of eight out of nine board members to approve an acquisition.
The Board also voted to eliminate the governance plan adopted as part of the CUC-HFS merger, including the 80% super-majority provisions of the Company's By-Laws which include limitations on the removal of the Chairman and the CEO.
Second, minority owners can hold up asset sale transactions if a so-called super-majority provision exists in your