Setting anti-merger clauses in the company's articles of association is a preventive measure taken by the company against potential malicious acquirers. The implementation of the anti-merger clause will directly or indirectly increase the acquisition cost, and even form a "winner curse" situation, so it will force the acquirer to flinch to a certain extent. As stipulated in the design terms, any decision on major issues such as the appointment and removal of directors, the sale, merger and division of the company's assets must be approved by the overwhelming majority of shareholders before implementation; Or stipulate that the company can only re-elect a small number of directors every year, and the reasons for removal must be reasonable. Faced with such regulations, even if the merger is completed, it is difficult for the acquirer to quickly grasp the control of the target company.
1, absolute majority clause
Absolute majority clause refers to the stipulation in the company's articles of association that the company must obtain the consent of the absolute majority of shareholders when conducting mergers and acquisitions, major asset transfers or changes in management rights, and the amendment to this clause also needs the consent of the absolute majority of shareholders to take effect. The absolute majority clause generally stipulates that the target company must obtain more than 2/3, 3/4 voting rights, or even more than 90%.
600887 Articles of Association of Yili Co., Ltd.: "The following matters shall be valid only after more than 3/4 of the voting rights held by shareholders (including shareholders' agents) present at the shareholders' meeting: 1. Revision of the articles of association; 2. Proposal on election and replacement of directors and supervisors who are not employee representatives; 3. Any transaction between the purchaser (including its related parties or concerted parties) and the company when the company is acquired maliciously; 4. The shareholders' meeting deliberates the hostile takeover proposals put forward by the acquirer (including its related parties or concerted parties), such as purchasing or selling assets, renting or leasing assets, donating assets, related party transactions, and foreign investment (including entrusted financing). ), external guarantee or mortgage, providing financial assistance, restructuring creditor's rights or debts, signing management contracts (including entrusted operation), transferring R&D projects, signing licensing agreements, etc. (As of August 38, 20 16 and 13, Yili Co., Ltd. is postponing its reply to the inquiry letter of Shanghai Stock Exchange on the revision of the articles of association of Inner Mongolia Yili Industrial Group Co., Ltd., and the regulatory authorities believe that three-quarters majority decision gives some shareholders veto power. )
Articles of Association of Longping Hi-Tech Company: "Article 77 The following matters shall be passed by a special resolution at the shareholders' meeting: ... (8) Contracts submitted by the purchaser to the shareholders' meeting for the purchase or sale of assets, lease or lease of assets, gift of assets, related transactions, foreign investment (including entrusted financial management), etc. ), external guarantee or mortgage, provision of financial assistance, reorganization of creditor's rights and debts, signing of business contracts (including entrusted operation and entrustment) (Articles of Association of Yuan Longping Agricultural High-tech Co., Ltd. was reviewed and approved at the first (temporary) shareholders' meeting on 20 16).
2. Grading board system
The phased board of directors system refers to the company's articles of association, which stipulates that only 1/4 or 1/3 can be re-elected every year, so even if the acquirer acquires enough equity, it is impossible to substantially reorganize the board of directors and it is difficult to gain control over the board of directors. In order to prevent the purchaser from abolishing the hierarchical board system by stages by modifying the company's articles of association after obtaining the controlling position, the company's articles of association can also set a specific absolute majority clause, stipulating that before modifying the hierarchical board system by stages, a certain proportion (such as 1/3 or more) of shareholders must attend the shareholders' meeting and obtain the consent of an absolute majority (such as 3/4) of shareholders present at the meeting.
Articles of Association of Longping Hi-Tech Company: "Article 96 ... The company shall not replace more than one third of its directors every 36 consecutive months; Where the number of directors is less than the number stipulated in the Articles of Association due to the resignation or dismissal of directors due to violation of laws, administrative regulations and the Articles of Association, the company may co-elect directors without being limited by one third of the directors. A director who is re-elected shall not be regarded as a director who has been replaced or co-opted as stipulated in this paragraph. "
China baoan's Articles of Association: "Article 96 ... During the term of each board of directors, the number of directors to be replaced each year shall not exceed one quarter of the total number of directors. If a director resigns or is dismissed for violating laws, administrative regulations and the articles of association of the company, it is not limited by one quarter. When the board of directors changes, the nomination of candidates for directors is proposed by the previous board of directors, and the number of directors (including independent directors) to be replaced in each session shall not exceed half of the total number of directors. " (Articles of Association of china baoan Group Co., Ltd. was revised on June 20 16)
3. Clauses restricting directors' qualifications
Restricting the qualifications of directors refers to stipulating the qualifications of directors in the articles of association. Those who do not have certain positive conditions may not serve as directors of the company, and those who have certain negative conditions may not join the board of directors of the company. Through these terms, it is more difficult for the acquirer to choose the right person as the company's director. In practice, we can design clauses restricting directors' qualifications from the aspects of the authority of shareholders to nominate directors, the number of nominees and the selection of candidates for the board of directors. For example, it is stipulated that the chairman of the company must be an executive director who has served continuously for more than three years, or that "the chairman of the company should be a director who has served continuously for two years, and the vice chairman should be a director who has served continuously for one year".
"Article 96 ... In case of hostile takeover of the company, in order to ensure the overall interests of the company and its shareholders and the stability of the company's operation, the director candidates nominated by the acquirer and its concerted parties shall have at least five years' experience in operation and management as the company's main business, and have professional ability and knowledge level suitable for performing the duties of directors."
Article 002407 "Polyfluoride" 10 1 ... If the term of office of the current board of directors expires, at least two-thirds of the original board members shall be re-elected, but the re-election of independent directors shall not exceed six years; Before the expiration of the term of office of the successor board of directors, the total number of directors reelected at the annual general meeting of shareholders shall not exceed one quarter of the number of board members stipulated in the articles of association. In order to ensure the overall interests of the company and its shareholders and the stability of the company's operation, the director candidates nominated by the acquirer and its concerted parties shall have at least five years of the same management experience as the company's current main business, as well as professional ability and knowledge level suitable for performing the duties of directors. (deliberated and adopted at the 20 15 annual general meeting of shareholders)
4. Dismissal must be a reasonable condition.
Cooperate with the above restrictions on the qualifications of directors, and increase the acquisition cost and difficulty of the acquirer.
600 138 CYTS article 102: the directors shall be elected or replaced by the shareholders' meeting for a term of three years. Before the expiration of a director's term of office, the shareholders' meeting shall not dismiss him without reason. Unless there are legal reasons or otherwise stipulated in the Articles of Association, shareholders (excluding the original nominated shareholders) shall not propose a motion to recall or replace the current directors. If a shareholder who is not originally nominated forcibly puts forward a proposal to recall or replace the current director, the board of directors or the board of supervisors of the company has the right to refuse his request to convene an extraordinary general meeting of shareholders. If the above proposal is put forward ten days before the shareholders' meeting, the board of directors of the company has the right to refuse to submit it to the shareholders' meeting for consideration. If these shareholders convene and preside over the shareholders' meeting by themselves, the board of directors or the board of supervisors of the company has the right to bring a lawsuit to the people's court where the company is located in the name of the company to confirm that the convening behavior and the resolution of the shareholders' meeting are invalid. The board of directors, the board of supervisors and senior management personnel of the company have the right not to implement the resolutions of the shareholders' meeting before the people's court makes an effective determination of its convening behavior and the resolutions of the shareholders' meeting according to law. "
5. Clauses restricting shareholders' right to propose proposals
The clause restricting shareholders' right to propose means that shareholders can only exercise the right to convene, preside over, propose and nominate directors after a certain period of time, so as to maintain the stability of the company's management and business. The clause restricting shareholders' right to put forward proposals can help prevent the acquirer from requesting re-election of the board of directors immediately after obtaining the shares of listed companies, but this move has always been controversial and is often inquired by the regulatory authorities.
Article 48 of 603003 Yulong Fuel Articles of Association is amended as "for more than 270 consecutive days". Shareholders who individually or collectively hold more than 0/0% of the shares of the Company/KLOC may convene and preside over the shareholders' meeting by themselves. Article 53 When the company holds a general meeting of shareholders, the board of directors, the board of supervisors and the shareholders who individually or collectively hold more than 3% of the company's shares "for more than 270 consecutive days" have the right to put forward proposals to the company. Article 82 is added: "When the board of directors is changed or re-elected, shareholders who individually or collectively hold more than 3% (including 3%) and less than 10% (excluding 10%) of the company for more than 270 consecutive days can only nominate one director candidate when submitting a proposal to the shareholders' meeting in their name, and hold the company/kloc-for more than 270 consecutive days.
Yulong Fuel replied to the inquiry of the regulatory authorities on June 3, 20 16, on the grounds that "the relevant national laws, regulations and judicial interpretations do not prohibit the modification or adjustment of the Articles of Association, and shareholders can make corresponding provisions on their rights in the Articles of Association in the form of shareholders' meeting, which will not affect or damage the rights of other shareholders. Giving shareholders the right to hold shareholders' meetings and proposals after holding shares for a certain period of time enriches and improves the normal exercise of the above rights by shareholders. Require shareholders to convene a general meeting of shareholders and put forward the right category of holding shares within a certain period of time. The purpose is to encourage shareholders who have long-term shareholding investment rather than short-term speculation to participate in the discussion and management of major issues of the company, which is conducive to the sustainable operation of the company and the development and stability of the capital market. " ; " The Company Law and the Rules of Shareholders' General Meeting of Listed Companies have not clearly stipulated the specific methods or procedures for the change or re-election of the board of directors. The Company amended the Articles of Association through the resolution of the shareholders' general meeting, stipulating that some shareholders have certain restrictions on the number of directors nominated, which is the authority given to the shareholders' general meeting by the Company Law. The company's modification of this clause is in compliance with the law. It can effectively prevent malicious acquirers from controlling the company's board of directors, ensure the stability of the board of directors, and thus safeguard the rights and interests of all shareholders. "
60038 shandong jintai Company intends to amend Article 48 of the Articles of Association. If the board of directors and the board of supervisors of the company do not agree to convene the shareholders' meeting after performing the pre-procedures, "shareholders who have held more than 0/0% of the shares of the company/KLOC-for more than 270 consecutive days may convene and preside over it by themselves". At the same time, Article 53 stipulates that when the company holds a general meeting of shareholders, "shareholders who individually or collectively hold more than 3% of the company's shares for more than 270 consecutive days have the right to put forward proposals to the company". It is proposed to amend the first paragraph of Article 82 of the Articles of Association, stipulating that shareholders who nominate candidates for non-independent directors and supervisors are "shareholders who individually or collectively hold more than 3% of the company's shares for more than 270 consecutive days".
The announcement of shandong jintai on August 201June 17 is being delayed to the regulatory authorities.
Second, cross-shareholding design.
In order to avoid being acquired, listed companies should pay attention to establishing a reasonable equity structure, so that it is difficult to transfer the company's equity to the acquirer in "sufficient amount". This requires the company to fully consider the equity design and holding structure at the beginning of its establishment. According to the flexible articles of association, the proportion of capital contribution is not equal to the proportion of shares, dividends and voting rights, and the equity is planned in the form of self-holding, mutual holding or employee holding, so as to ensure that the founding shareholders of the company firmly grasp the control right and make up afterwards.
Self-sustaining, in the case of decentralized equity, you can control a company by holding about 25% equity, or even less. Self-holding can be divided into two ways: allowing yourself to control "enough" company shares when setting up company shares, and increasing the shareholding ratio through subsequent shareholding. Of course, in the case of relative holding, how much proportion is the best state depends on the specific situation of the controlling shareholder and the target company.
Cross-shareholding means that affiliated enterprises or friendly enterprises hold a certain proportion of shares with each other. When one of them is threatened to take over, the other side helps, which is essentially mutual investment. Cross-shareholding can reduce the number of shares in circulation, thus reducing the chances of being acquired. In addition, mutual shareholding can not only have the effect of anti-takeover, but also help the two companies to form a stable and friendly business partnership. Of course, cross-shareholding also has some negative effects, because cross-shareholding needs to occupy a lot of funds of both companies, which affects the use of working capital.
The employee stock ownership plan is designed based on the consideration of equity decentralization. Many enterprises in the United States encourage internal employees to hold their own shares, and at the same time set up corresponding foundations for control and management. When hostile M&A occurs, if employees hold a relatively large proportion of shares, they can control part of the shares of the enterprise, enhance the decision-making control of the enterprise, and improve the difficulty of hostile mergers and acquisitions.
For example, on September 2, 2004, GF Securities Co., Ltd. faced a hostile takeover by CITIC Securities. In the takeover battle, the cross shareholders of GF Securities, Shenzhen Jifu Venture Capital Co., Ltd., Jilin Aodong and Liaoning Chengda Sanjia Company, quickly increased their holdings, controlled 66.7% of the shares of GF Securities, firmly occupied an absolute controlling position, and successfully defeated the hostile takeover of CITIC Securities.
Third, the golden parachute clause.
Golden parachute means that the board of directors of the target enterprise passes a resolution, and the directors and senior managers of the target enterprise sign a contract with the target enterprise. Once the target enterprise is merged and its directors and senior managers are dismissed, the enterprise must pay huge pension, stock option income or extra allowance at one time. The income of the above-mentioned personnel varies according to their status, qualifications and past performance. This kind of income is like a parachute for senior managers to retire safely from high positions, hence the name parachute plan and the name golden parachute because of its rich income. At present, Yili, china baoan, shandong jintai, Polyfluoride, World Bank, Yahua Group and other listed companies have all joined this clause, but this clause also faces strong doubts from the regulatory authorities.
002285 World Bank "Article 97 In the case of a hostile takeover of the company, if a director has not committed any illegal or criminal acts during his tenure, or has no qualifications and ability to serve as a director of the company, or is dismissed without violating the provisions of the company's articles of association, the company shall pay compensation to the director according to five times of the total pre-tax remuneration during his tenure. In the case of hostile takeover of the company, if the term of the current board of directors expires, at least two-thirds of the original board members should be re-elected; Before the expiration of the term of office of the successor board of directors, the total number of directors reelected at the annual general meeting of shareholders shall not exceed one quarter of the number of board members stipulated in the articles of association. In the case of a malicious takeover of the company, in order to ensure the overall interests of the company and its shareholders and the stability of the company's operation, the director candidates nominated by the acquirer and its concerted parties should have at least five years of the same business management experience as the company's current (operating, main) business, as well as the professional ability and knowledge level suitable for its performance of director duties. "
002497 Yahua Group "Article 13 If the directors, supervisors, presidents and other senior management personnel are terminated or dismissed before the expiration of their term of office due to the hostile takeover of the company, or there is no illegal or criminal act, or they do not have the qualifications and ability to hold the post, or they do not violate the provisions of the articles of association, the company shall pay a one-time remuneration of ten times the total pre-tax salary of the directors, supervisors, presidents or other senior management personnel during their tenure in the company. If the above-mentioned directors, supervisors, presidents or other senior managers have signed labor contracts with the company, the company shall also pay additional economic compensation or compensation in accordance with the provisions of the Labor Contract Law of People's Republic of China (PRC) when dissolving the labor contract. " (2065438+ Articles of Association of Sichuan Yahua Industrial Group Co., Ltd. adopted at the 16th meeting of the third board of directors on July 22nd, 2006)
Fourth, the poison pill plan
Also known as the anti-M&A strategy of stock dilution, it is an anti-M&A measure that increases the M&A cost of M&A enterprises and leads to the rapid decrease of the M&A attraction of target enterprises. The poison pill plan will not take effect in normal times, and it will only start when the enterprise is threatened by mergers and acquisitions. It needs to be prepared in advance and laid the groundwork.
Applicable example: In the stock option incentive plan in May 2006, Yili shares granted 50 million stock options to 33 people including President Pan Gang. Under normal circumstances, the first exercise of the incentive object shall not exceed 25% of the granted stock options, and the remaining stock options may be exercised in stages or at one time after the first exercise of 65,438+0 years and within the validity period of the stock options. However, when the company is acquired in the market, the proportion of the first exercise of the incentive object can reach 90% of the total number of options granted, and the remaining options can be exercised within 3 days after the first exercise. The above plan of Yili Co., Ltd. is a combination of management incentive, "poison pill" plan and "golden parachute"
To sum up, although the regulatory authorities question the behavior of listed companies to modify their articles of association one after another, all parties have different opinions, but from the perspective of practice and development, it is self-evident that it is important for an enterprise to improve the design of the articles of association and do a good job in equity planning. In addition, the author needs to emphasize that anti-merger measures are only aimed at those malicious mergers and acquisitions and improper hostile mergers and acquisitions. If M&A itself is conducive to optimizing the allocation of resources, improving the company's competitive position and long-term development, without harming the interests of shareholders, or even increasing the interests of shareholders, then the management's implementation of anti-M&A violates the operating principle of maximizing the interests of shareholders and should not be encouraged.