Section 18 Charter and Bylaw Lockups

• Library: Corporate Organization and Operation 2009 Supp Forms

Special provisions added to a system of charter and bylaws for the benefit of minority shareholders should include, when appropriate, "lockup" provisions, which will preclude an amendment of the document to delete the protection without the consent of the minority. A lockup is usually structured by requiring that the provision to be locked up and the lockup not be amended or deleted without the vote of a specified high percentage of the outstanding shares. For example, if a 30% Missouri shareholder desires...