Provision
Definition of 'Provision'A legal clause or condition contained within a contract that requires or prevents either one or both parties to perform a particular requirement by some specified time. Specified requirements can include, but are not limited to, sunset, soft call, anti-dilution, and anti-greenmail provisions. |
|
Investopedia explains 'Provision'Provisions were created to protect the interests of one or both parties named in a contract or legal document. For example, the anti-greenmail provision contained within some companies' charters protects shareholders from the board wanting to pass stock buybacks. Although stock buybacks can be a good thing for shareholders, some buybacks allow board members to sell their stock to the company at inflated premiums. |
Related Definitions
Articles Of Interest
-
A Breakdown Of Stock Buybacks
Find out what these company programs achieve and what it means for stockholders. -
Bond Call Features: Don't Get Caught Off Guard
Learn why early redemption occurs and how to avoid potential losses. -
What happens when a company buys back its shares?
When a company performs a share buyback, there are a few things that the company can do with the securities they buy back. The company can reissue the stock on the market at a later time. In ... -
What is an evergreen provision and how does it affect shareholders?
It is common for publicly-traded corporations to provide more than just regular salary compensation to their management and key personnel. Often, corporate boards will decide to provide special ... -
The Basics Of Mergers And Acquisitions
Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work. -
Everything Investors Need To Know About Earnings
We go over the concepts behind the excitement over the most important figure in the stock market. -
Is a dividend reduction a signal to sell?
Although a dividend reduction is generally viewed as a signal to sell, the decision is not as clear-cut as if the dividend were to be eliminated altogether, which would be an unequivocal sell ... -
Carl Icahn's Investing Strategy
Buying up failing investments and turning them around helped to create the "Icahn lift" phenomenon. -
Using Social Media To Reach Customer Service Departments
Companies are increasingly using social media and this provides customers with another channel to receive customer service. -
How Often Should You Contact Clients?
Figuring out how often an investment advisor should contact clients is not easy.
Free Annual Reports