Dilution protection

Dilution protection

Standard provision that changes the conversion ratio in the case of a stock dividend or extraordinary distribution to avoid dilution of a convertible bondholder's potential equity position. Adjustment usually requires a split or stock dividend in excess of 5% or issuance of stock below book value.

Antidilution Clause

1. In common and preferred stock, the right of a shareholder to maintain the same percentage of ownership in a company, should the company issue more stock. This protects the investor from devaluation of his/her shares if the company decides to hold a round of financing. In preferred stock, the anti-dilution clause also indicates the right of a shareholder to purchase more shares in a new round of financing at the offering price up to his/her previous percentage of ownership. Most U.S. states only recognize the anti-dilution clause if it is made explicit in the corporation's charter.

2. In convertible securities, the right of a holder to maintain the same conversion ratio in the event of a stock split. For example, if a convertible bond may be exchanged for 100 shares of common stock and there is a 2-for-1 stock split, the same convertible bond can be exchanged for 200 shares. This protects the investor from devaluation of the conversion option.
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Dilution Protection - Pursuant to the terms of the subscription agreement between the Company and Signet dated 15 May 2012 under which Polo subscribed for 2,857,143 Signet Shares at a price of US$3.
9 million shares of Common Stock containing full anti dilution protection expired unexercised.
50 per Signet Share (details of which are set out in the announcement by the Company dated 16 May 2012), Polo was granted dilution protection by Signet.
In connection with the sale of its Series A Preferred Stock, holders of all of the convertible notes issued by Vuzix in June 2014 and holders of approximately 86% of the warrants issued in connection with Vuzix' July 2013 public offering and simultaneous debt conversion, agreed to irrevocably waive their rights to anti dilution protection under their respective instruments, thereby eliminating approximately $10 million of derivative liability from Vuzix' balance sheet.
3d at 875 (noting the "famousness prong reinstate[es] the balance--by carefully limiting the class of trademarks eligible for dilution protection, Congress and state legislatures granted the most potent form of trademark protection in a manner designed to minimize undue impact on other uses.
2002) (noting that the "animating concern of the dilution protection is that the user of the diluting mark appropriates or free rides on the investment made by the trademark holder.
Trademark Dilution: Federal, State, and International Law, Second Edition" Offers Clear Guidance on the Evolving Laws Governing Trademark Dilution Protection