Voting and Protective Provisions Preferred Shares Clause (Articles of Incorporation) (CBCA, OBCA)

Summary

This is a clause for preferred shares setting out the voting rights of preferred shareholders and containing protective provisions. This clause contains practical guidance, explanations, and drafting notes. This clause considers the effect of protective provisions on the voting rights of preferred shares and entitles the holders of such shares to vote only with respect to certain corporate actions. This clause anticipates investors holding preferred shares who may not have voting control of the corporation, but who require protective provisions entitling them to veto certain corporate actions such as modifying corporate articles, authorizing the issuance of new or diluting shares, entering into M&A agreements, share repurchases, and payment of dividends. This form of clause is to be used for articles of incorporation of a corporation incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44 ("CBCA"), or the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 ...