supermajority provision

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 ?
The supermajority provision of the state constitution - thanks to Proposition 13 - is all the protection that taxpayers have.
The supermajority provision, insisted the Nevada high court, was merely a "procedural requirement that is general in nature.
The other supermajority provision requires a two-thirds affirmative vote to remove a director prior to the next annual meeting and is a provision that can only be changed by a two-thirds affirmative vote.
UNITE HERE is asking Station Casinos shareholders to vote for proposals to change the supermajority provision for amending the Company's bylaws, institute annual elections of directors, and allow shareholders to vote on the company's "poison pill" anti-takeover device.
Redeem Wegener's just adopted "poison pill," rendering it inapplicable to the offer or a subsequent merger; and * Approve the offer and subsequent merger, exempting each from the application of Section 203 of the General Corporation Laws of Delaware and the supermajority provision of Wegener's charter.
The supermajority provision would require approval of 80 percent of Zapata's outstanding voting stock.
We need the vote of all of those who tendered plus just a few percent more if we are to succeed in overcoming Wallace's supermajority provision.
Accordingly, states affected by these types of initiatives will have to consider new forms of revenue generation that will not be considered tax increases subject to supermajority provisions, come to broad-based agreements to increase taxes that pass supermajority muster, or slash services as a way to close structural budget deficits.
The company's Restated Certificate of Incorporation requires the affirmative vote of the holders of not less than 80% of the total voting power of all the outstanding shares of voting stock of Massey in order to (1) declassify our Board of Directors, (2) eliminate cumulative voting, (3) remove supermajority vote provisions related to stockholder amendment of bylaws and (4) remove supermajority provisions related to stockholder approval of business combinations with a more than 5% stockholder.
923, 958 (2005) ("Although historical evidence presents no express rationale for the supermajority provisions included in the Constitution, a more apt, albeit general, characterization is that they were intended to promote
Ayer's beneficial ownership of such a large voting interest was material information relevant to a shareholder's voting decision whether to approve the supermajority provisions.
However, many states will have to overcome checks on the power to unilaterally increase taxes, including supermajority provisions and in some cases, state constitutional prohibitions.