Anti-Greenmail Provision

Anti-Greenmail Provision

A special clause located within a firm's corporate charter that acts as a deterrence against the board of directors passing a share buy-back.

Notes:

This provision acts as a preventative measure, restraining managers from buying back company stock at significant premiums due to greenmail. As a majority shareholder may be able to influence the board into purchasing shares at a significant premium, the anti-greenmail provision requires that requires that a majority of shareholders (excluding the majority shareholder) agree to the buyback.

See also: All-Holder's Rule, Anti-Takeover Measure, Bankmail, Best Price Rule, Greenmail, Whitemail