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.
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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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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If the supermajority provision of Proposition 13 were to fall, it would have far-reaching consequences to the balance of power between the state and localities, and for how revenue is raised.
Taxing decisions: a few states are dipping their toes into new revenue streams
(82) When a supermajority provision appears in the charter, it will be enforced and, under an express statutory provision, cannot itself be modified by a lower majority.
LEXIS 219, at *16 (noting that a supermajority provision in a charter cannot be amended by a "bare majority vote"); Sellers v.
Corporate constitutionalism: antitakeover charter provisions as precommitment
The supermajority provision, insisted the Nevada high court, was merely a "procedural requirement that is general in nature."
Tax increase foisted on Nevada
The results in Table V indicate that control sharing in JVs boards is, on average, negatively associated with JV's performance in the presence of options, supermajority provisions, and the management of day-to-day operations by one partner.
Supermajority indicates the presence of supermajority provisions. Options indicates that at least one of the partners is granted a call or put option.
The control and performance of joint ventures
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.
Tax increases contained in state ballot initiatives soundly rejected
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
A pragmatic defense of originalism
While four studies found that classified board provisions, fair price provisions, supermajority provisions and elimination of cumulative voting provisions have insignificant wealth effects (DeAngelo & Rice, 1983; Lauterback, Malitz, & Vu, 1991; Linn & McConnell, 1983; McWilliams, 1990), several other studies found support for the entrenchment hypothesis (Agrawal & Mandelker, 1990; 1992; Bhagat & Brickley, 1984; Jarrell & Poulsen, 1987; Mahoney & Mahoney, 1993; Mahoney, Sundaramurthy, & Mahoney, 1996).
Supermajority Provisions. This provision typically stipulates stockholder approval percentages of 75-80% for transactions such as mergers, sale of assets or other specified transactions.
Antitakeover Provisions and Shareholder Value Implications: A Review and a Contingency Framework
King, The Use of Supermajority Provisions in the Constitution: The Framers, the Federalist Papers and the Reinforcement of a Fundamental Principle, 8 SETON HALL CONST.
The fiscal powers and the 1930s: entrenchment

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