Carveouts to Anti-Dilution Protections

The video tutorial explains anti-dilution protections, which safeguard preferred shareholders from negative impacts when new equity is issued. It details how these protections adjust conversion rates and introduces carve outs, which are exceptions that do not trigger these protections. Common carve outs include stock conversions, stock options, dividends, and employee compensation. The video also covers scenarios like mergers, acquisitions, and commercial transactions where carve outs apply, and the role of shareholder approval in these processes.

What are some examples of transactions that might not trigger anti-dilution protections?

How does the approval of a majority of preferred class holders affect the triggering of anti-dilution protections?