subscription privilege

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Subscription privilege

The right of current shareholders of a corporation to buy newly issued shares before they are available to the public.

Preemptive Right

In stock, the ability of a shareholder to maintain the same percentage of ownership in a company should the company issue more stock by subscribing to a proportional number of shares at or below the market price. This protects the investor from devaluation of his/her shares if the company decides to hold a round of financing. The purchase of this proportional number of shares usually takes place before the new issue is offered to the secondary market, and must be exercised before a certain date (known as the expiration date) if the shareholder is to maintain the same percentage of ownership. It is also called a subscription right. See also: Anti-dilution provision.

subscription privilege

References in periodicals archive ?
In the event there are any unexercised Rights after the Basic Subscription Privileges and Over-subscription Privileges have been fulfilled, then any such remaining unexercised Rights shall be offered to members of management, including Directors.
05 per share and represent the number of shares that MacAndrews & Forbes would otherwise have been entitled to subscribe for in the rights offering pursuant to its basic subscription privilege (which is approximately 60% of the total shares offered in the rights offering and private placement combined).
Chemical Mellon received subscriptions to purchase approximately 9,750,000 Warrants pursuant to the Over Subscription Privilege but only 1,471,565 Warrants remained after the exercise of the Basic Subscription Privilege.
In addition, the subscription rights include an over-subscription privilege pursuant to which each rights holder that exercises its basic subscription privilege in full (as described in the prospectus supplement being mailed on or about December 18, 2006 to stockholders of record as of the Record Date) may also subscribe for additional shares at the same subscription price of $1.
The Basic Subscription Privilege provided that for every five common shares held, shareholders received the right to purchase two additional common shares at 75 cents ($0.
Pursuant to an over-subscription privilege in the rights offering, each rights holder that exercises its basic subscription privilege in full may also subscribe for additional shares at the same subscription price per share, to the extent that other stockholders do not exercise their subscription rights in full.
A total of 5,606,048 shares were issued pursuant to the Offering including 1,121,210 shares issued as part of the additional 25% over subscription privilege.
The 433,532 shares not subscribed for pursuant to the exercise of the basic subscription privileges and over-subscription privileges were purchased by the standby purchaser for a purchase price of approximately USD3m.