Board-out Clause

Categories: Mergers and Acquisitions,

A provision in a publicly traded company's charter or bylaws that allows the board of directors to invoke the supermajority provision. Should the board of directors decide to exercise the board-out clause, then the consent of more than a simple majority of shareholders will be needed for certain actions - especially in the case of a merger or acquisition. This clause is almost always used as an anti-takeover measure.