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.

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The supermajority provision, insisted the Nevada high court, was merely a "procedural requirement that is general in nature.

Tax increase foisted on Nevada

This explanation would suggest that supermajority provisions identify those JVs that are more likely to perform poorly.

Model (2) indicates that supermajority provisions are negatively associated with JV performance in equally controlled JVs, but are positively associated with performance in JVs controlled by one of the partners.

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).

Antitakeover Provisions and Shareholder Value Implications: A Review and a Contingency Framework