Preemptive Rights
An investor's right to purchase the investor's pro rata (i.e., proportionate) share of any additional securities issued by a company. Preemptive rights generally do not arise from the sale of securities issued to employees, directors, and consultants pursuant to agreed limits (frequently under a stock option plan) or from the issuance of securities in connection with independent mergers or acquisitions with unrelated third parties.
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- Industry/Domain: Financial services
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