Pre-emptive Right Exclusions Clause Samples
A Pre-emptive Right Exclusions clause defines circumstances under which existing shareholders do not have the right to purchase new shares before they are offered to outside parties. Typically, this clause applies to specific types of share issuances, such as shares issued as part of an employee stock option plan or in connection with mergers and acquisitions, where pre-emptive rights would otherwise slow down or complicate the process. Its core function is to provide flexibility for the company to issue new shares in certain situations without being obligated to first offer them to current shareholders, thereby streamlining capital raising or strategic transactions.
Pre-emptive Right Exclusions. The Corporation shall not be obligated to deliver an Offer Notice or to otherwise comply with its obligations under Sections 2.1 or 2.2, and the Pre-emptive Right shall not apply to:
(a) any Subject Securities that are to be issued or sold for purposes of director, officer, employee or consultant incentive plans, employee share ownership programs or similar plans or programs, in each case, that have been approved by the board of directors of the Corporation, including the issuance of any Common Shares on the exercise, conversion or settlement of such Subject Securities;
(b) any Subject Securities that are to be issued in connection with a dividend reinvestment plan of the Corporation in effect from time to time;
(c) any Subject Securities that are to be issued or sold to satisfy existing instruments issued by the Corporation or its Affiliates as of the date of this Agreement (including for greater certainty, the Shareholder Rights Plan of the Corporation in effect from time to time);
(d) any Subject Securities that are to be issued or sold upon the exercise, exchange or conversion of any Offering Convertible Securities; or
(e) any Subject Securities that are to be issued or sold to any third party seller pursuant to any corporate transaction, such as a merger, amalgamation, arrangement or take-over bid, or share or asset purchase, or similar transactions, where Subject Securities are used to fund all or a portion of the applicable transaction price.
Pre-emptive Right Exclusions. The Corporation shall not be obligated to make an offer under or to otherwise comply with Section 5.1 and the Pre-Emptive Right shall not apply to, any Shares or convertible securities that are issued by the Corporation pursuant to:
(a) any transaction which is primarily a borrowing transaction with a financial institution in connection with which the lender is granted the right to acquire options, warrants, shares or other securities of the Corporation;
(b) the issuance of options, warrants, performance shares or other incentive equity securities or the issuance of any Shares in connection with the exercise of any options, warrants or other incentive equity securities granted by the Corporation pursuant to any security-based incentive plan or other arrangement, which is approved by the Board in accordance with the terms and conditions hereof; or
(c) the issuance of Shares by the Corporation in a share or asset purchase or other similar transaction where Shares or convertible securities of the Corporation are used to fund all or a portion of the applicable purchase price.