In addition to regulating the relationship and permitted and prohibited activities of shareholders and the company, certain types of shareholder agreements are used to limit the powers of the board of directors and transfer some or all of those powers from directors to shareholders. There are also a number of provisions of a shareholders` agreement that can be used to control the issuance and disposal of shares, including preferential subscription rights and pre-emption rights/initial offer rights. A provision of the right of pre-emption gives existing shareholders the right to acquire any new securities that a corporation proposes to spend; This allows existing shareholders to prevent their assets from being diluted when new shares are issued. Similarly, a pre-emption clause gives shareholders the right to acquire shares from another existing shareholder who wishes to sell his shares to a third party. . . .