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