Company Call Right and Involuntary Transfers. (a) Prior to the IPO Date the Company shall have the right but not the obligation to repurchase Restricted Shares and/or cancel outstanding Employee Options held by the Management Stockholder or his or her successor in interest thereunder (the “Call Right”) as set forth in this Section 2. The Call Right shall be exercised by written notice (the “Call Notice”) to the Management Stockholder given in accordance with Section 9(g) of this Agreement on or prior to the last date on which the Call Right may be exercised by the Company. (b) Upon the Management Stockholder’s Termination of Service for any reason, and for a period of six months thereafter, the Company shall have a Call Right to repurchase Restricted Shares in exchange for the Repurchase Price and to cancel Employee Options in exchange for the Cancellation Payment. The Call Right pursuant to this Section 2(b) may be exercised only once but may be exercised with respect to all or any portion of the Restricted Shares and Employee Options outstanding on the date of the Call Notice. (c) In addition, the Company shall have a Call Right effective immediately prior to a Change of Control to repurchase Restricted Shares in exchange for the Repurchase Price and to cancel Employee Options in exchange for the Cancellation Payment. The Call Right pursuant to this Section 2(c) may be exercised only once but may be exercised with respect to all or any portion of the Restricted Shares and Employee Options outstanding on the date of the Call Notice. (d) The Repurchase Price under Section 2(b) shall be determined as follows: (i) in the event the Management Stockholder’s Termination of Service is by reason of his or her death, disability, resignation with Good Reason or involuntary termination by the Company without Cause, the Repurchase Price shall be the Fair Market Value of the Restricted Shares on the date of the Call Notice; and (ii) in the event the Management Stockholders’ Termination of Service is for any other reason, the Repurchase Price shall be the lesser of (A) the Fair Market Value of the Restricted Shares on the date of the Call Notice and (B) the purchase price paid for the Restricted Shares. The Repurchase Price under Section 2(c) shall be the Fair Market Value of the Restricted Shares on the date of the Call Notice. The “Cancellation Payment” for Vested Options upon exercise of the Call Right shall be equal to the excess of the applicable Repurchase Price over the exercise price of such Vested Options; and the “Cancellation Payment” for all other Employee Options upon exercise of the Call Right shall be zero and such Employee Options will be canceled without payment therefor.
Appears in 3 contracts
Samples: Management Stockholders Agreement (Amc Entertainment Inc), Management Stockholders Agreement (Marquee Holdings Inc.), Management Stockholders Agreement (Amc Entertainment Inc)
Company Call Right and Involuntary Transfers. (a) Prior to the IPO Date the Company shall have the right but not the obligation to repurchase Restricted Shares and/or cancel outstanding Employee Options held by the Management Stockholder or his or her successor in interest thereunder (the “Call Right”"CALL RIGHT") as set forth in this Section 2. The Call Right shall be exercised by written notice (the “Call Notice”"CALL NOTICE") to the Management Stockholder given in accordance with Section 9(g9(h) of this Agreement on or prior to the last date on which the Call Right may be exercised by the Company.
(b) Upon the Management Stockholder’s 's Termination of Service for any reason, and for a period of six months thereafter, the Company shall have a Call Right to repurchase Restricted Shares in exchange for the Repurchase Price and to cancel Employee Vested Options in exchange for the Cancellation Payment. The Call Right pursuant to this Section 2(b) may be exercised only once but may be exercised with respect to all or any portion less than all of the Restricted Shares and Employee or Vested Options outstanding on the date of the Call Notice.
(c) In addition, the Company shall have a Call Right effective immediately prior to a Change of Control occurring after January 31, 2005 to repurchase Restricted Shares in exchange for the Repurchase Price and to cancel Employee Options in exchange for the Cancellation Payment. The Call Right pursuant to this Section 2(c) may be exercised only once but may be exercised with respect to all or any portion less than all of the Restricted Shares and Employee or Vested Options outstanding on the date of the Call Notice.
(d) The Repurchase Price under Section 2(b) shall be determined as follows: (i) in the event the Management Stockholder’s 's Termination of Service is by reason of his or her death, disability, resignation with Good Reason or involuntary termination by the Company without Cause, the Repurchase Price shall be the Fair Market Value of the Restricted Shares on the date of the Call Notice; and (ii) in the event the Management Stockholders’ ' Termination of Service is for any other reason, the Repurchase Price shall be the lesser of (A) the Fair Market Value of the Restricted Shares on the date of the Call Notice and (B) the purchase price paid for the Restricted Shares (and if shares of AMC were contributed under the Subscription Agreement, for purposes of determining the purchase price paid for Restricted Shares, the value of each contributed AMC share shall equal $19.50). The Repurchase Price under Section 2(c) shall be the Fair Market Value of the Restricted Shares on the date of the Call Notice. The “Cancellation Payment” Payment for Vested Options upon exercise of the Call Right shall be equal to the excess of the applicable Repurchase Price over the exercise price of such Vested Options; and the “Cancellation Payment” Payment for all other Employee Options upon exercise of the Call Right shall be zero and such Employee Options will be canceled without payment therefor.
(e) Subject to Section 2(g) below, the repurchase of Restricted Shares and cancellation of Vested Options pursuant to the exercise of a Call Right shall take place on a date specified by the Company, but in no event following the later of the 60th day following the date 3 of the Call Notice or the 10th day following the receipt by the Company of all necessary Governmental Approvals. On such date, the Management Stockholder shall transfer the Restricted Shares subject to the Call Notice to the Company, free and clear of all liens and encumbrances, by delivering to the Company the certificates representing the Restricted Shares to be purchased, duly endorsed for transfer to the Company or accompanied by a stock power duly executed in blank, with such other documents and information as the Company may reasonably request, the Company shall pay to the Management Stockholder the Repurchase Price; and the Employee Options subject to the Call Notice shall be cancelled and the Company shall pay the Management Stockholder the Cancellation Price therefor. The Company and the Management Stockholder each shall use his, her or its reasonable efforts to expedite all proceedings contemplated hereunder at the earliest practicable date.
(i) In the case of any transfer of title or beneficial ownership of Restricted Shares upon default, foreclosure, forfeit, divorce, court order or otherwise, other than by a voluntary decision on the part of a Management Stockholder (each, an "INVOLUNTARY TRANSFER"), the Management Stockholder shall promptly (but in no event later than two days after the Involuntary Transfer) furnish written notice (the "INVOLUNTARY TRANSFER NOTICE") to the Company indicating that the Involuntary Transfer has occurred, specifying the name of the person to whom the shares were transferred (the "INVOLUNTARY TRANSFEREE"), giving a detailed description of the circumstances giving rise to, and stating the legal basis for, the Involuntary Transfer.
(ii) Upon the receipt of the Involuntary Transfer Notice, and for a period of six months thereafter, the Company shall have the right to repurchase, and the Involuntary Transferee shall have the obligation to sell, all (but not less than all) of the Restricted Shares acquired by the Involuntary Transferee for a repurchase price equal to the Fair Market Value of such Restricted Shares as of the date of the Involuntary Transfer (the "INVOLUNTARY TRANSFER REPURCHASE PRICE" and such right, the "INVOLUNTARY TRANSFER REPURCHASE Right"). The Involuntary Transfer Repurchase Right shall be exercised by written notice (the "INVOLUNTARY TRANSFER REPURCHASE NOTICE") to the Involuntary Transferee given in accordance with Section 9(h) of this Agreement on or prior to the last date on which the Involuntary Transfer Repurchase Right may be exercised by the Company.
(iii) Subject to Section 2(g) below, the repurchase of Restricted Shares pursuant to the exercise of the Involuntary Transfer Repurchase Right shall take place on a date specified by the Company, but in no event following the later of the 60th day following the date of the date of the Involuntary Transfer Repurchase Notice or the 10th day following the receipt by the Company of all necessary Governmental Approvals. On such date, the Involuntary Transferee shall transfer the Restricted Shares subject to the Involuntary Transfer Repurchase Notice to the Company, free and clear of all liens and encumbrances, by delivering to the Company the certificates representing the Restricted Shares to be purchased, duly endorsed for transfer to the Company or accompanied by a stock power duly executed in blank, with such other documents and information as the Company may reasonably request, and the Company shall pay to the Involuntary Transferee the Involuntary Transfer Repurchase Price. The Company and the Involuntary Transferee each shall use his, her or its reasonable efforts to expedite all proceedings contemplated hereunder at the earliest practicable date. If the Involuntary Transferee does not transfer the Restricted Shares to the Company as required, such Restricted Shares shall be deemed to be cancelled and the Company shall make payment in respect of such Restricted Shares, without any interest accrued thereon, upon delivery thereof.
(g) Notwithstanding anything to the contrary herein,
(i) The Company shall not be permitted to purchase any Restricted Shares held by any Management Stockholder or Involuntary Transferee upon exercise of the Call Right or the Involuntary Transfer Repurchase Right if the Board determines that:
(A) The purchase of Restricted Shares would render the Company or its subsidiaries unable to meet their obligations in the ordinary course of business taking into account any pending or proposed transactions, capital expenditures or other budgeted cash outlays by the Company, including, without limitation, any proposed acquisition of any other entity by the Company or any of its subsidiaries;
(B) The Company is prohibited from purchasing the Restricted Shares by applicable law restricting the purchase by a corporation of its own shares; or
(C) The purchase of Restricted Shares would constitute a breach of, default, or event of default under, or is otherwise prohibited or limited by, the terms of any loan agreement, indenture, or other agreement or instrument to which the Company or any of its subsidiaries is a party (the "FINANCING Documents") or the Company is not able to obtain the requisite consent of any of its senior lenders to the purchase of the Restricted Shares. The events described in (A) through (C) above each constitute a "REPURCHASE DISABILITY."
(ii) In the event of a Repurchase Disability, the Company shall notify in writing the Management Stockholder or Involuntary Transferee with respect to whom the Call Right or the Involuntary Transfer Repurchase Right has been exercised (a "DISABILITY NOTICE"). The Disability Notice shall specify the nature of the Repurchase Disability. The Company shall thereafter repurchase the Restricted Shares (and/or cancel Employee Options) described in the Call Notice or Involuntary Transfer Repurchase Notice as soon as reasonably practicable after all Repurchase Disabilities cease to exist (or the Company may elect, but shall have no obligation, to cause its nominee to repurchase the Restricted Shares (and/or cancel Employee Options) while any Repurchase Disabilities continue to exist). In the event the Company suspends its obligations to repurchase the Restricted Shares (and/or cancel Employee Options) pursuant to a Repurchase Disability, (A) the Company shall provide written notice to each applicable Management Stockholder or Involuntary Transferee as soon as practicable after all Repurchase Disabilities cease to exist (the "REINSTATEMENT NOTICE"); (B) the Fair Market Value of the Restricted Shares subject to the Call Notice or Involuntary Transfer Repurchase Notice shall be determined as of the date the Reinstatement Notice is delivered to the Management Stockholder or Involuntary Transferee, which Fair Market Value shall be used to determine the Repurchase Price or Involuntary Transfer Repurchase Price in the manner described above; and (C) the repurchase shall occur on a date specified by the Company within 10 days following the determination of the Fair Market Value of the Shares.
Appears in 1 contract
Company Call Right and Involuntary Transfers. (a) Prior to the IPO Date the Company shall have the right but not the obligation to repurchase Restricted Shares and/or cancel outstanding Employee Options held by the Management Stockholder or his or her successor in interest thereunder (the “Call Right”"CALL RIGHT") as set forth in this Section 2. The Call Right shall be exercised by written notice (the “Call Notice”"CALL NOTICE") to the Management Stockholder given in accordance with Section 9(g9(h) of this Agreement on or prior to the last date on which the Call Right may be exercised by the Company.
(b) Upon the Management Stockholder’s 's Termination of Service for any reason, and for a period of six months thereafter, the Company shall have a Call Right to repurchase Restricted Shares in exchange for the Repurchase Price and to cancel Employee Vested Options in exchange for the Cancellation Payment. The Call Right pursuant to this Section 2(b) may be exercised only once but may be exercised with respect to all or any portion less than all of the Restricted Shares and Employee or Vested Options outstanding on the date of the Call Notice.
(c) In addition, the Company shall have a Call Right effective immediately prior to a Change of Control occurring after January 31, 2005 to repurchase Restricted Shares in exchange for the Repurchase Price and to cancel Employee Options in exchange for the Cancellation Payment. The Call Right pursuant to this Section 2(c) may be exercised only once but may be exercised with respect to all or any portion less than all of the Restricted Shares and Employee or Vested Options outstanding on the date of the Call Notice.
(d) The Repurchase Price under Section 2(b) shall be determined as follows: :
(i) in the event the Management Stockholder’s 's Termination of Service is by reason of his or her death, disability, resignation with Good Reason or involuntary termination by the Company without Cause, the Repurchase Price shall be the Fair Market Value of the Restricted Shares on the date of the Call Notice; and (ii) in the event the Management Stockholders’ ' Termination of Service is for any other reason, the Repurchase Price shall be the lesser of (A) the Fair Market Value of the Restricted Shares on the date of the Call Notice and (B) the purchase price paid for the Restricted Shares (and if shares of AMC were contributed under the Subscription Agreement, for purposes of determining the purchase price paid for Restricted Shares, the value of each contributed AMC share shall equal $19.50). The Repurchase Price under Section 2(c) shall be the Fair Market Value of the Restricted Shares on the date of the Call Notice. The “Cancellation Payment” Payment for Vested Options upon exercise of the Call Right shall be equal to the excess of the applicable Repurchase Price over the exercise price of such Vested Options; and the “Cancellation Payment” Payment for all other Employee Options upon exercise of the Call Right shall be zero and such Employee Options will be canceled without payment therefor.
(e) Subject to Section 2(g) below, the repurchase of Restricted Shares and cancellation of Vested Options pursuant to the exercise of a Call Right shall take place on a date specified by the Company, but in no event following the later of the 60th day following the date of the Call Notice or the 10th day following the receipt by the Company of all necessary Governmental Approvals. On such date, the Management Stockholder shall transfer the Restricted Shares subject to the Call Notice to the Company, free and clear of all liens and encumbrances, by delivering to the Company the certificates representing the Restricted Shares to be purchased, duly endorsed for transfer to the Company or accompanied by a stock power duly executed in blank, with such other documents and information as the Company may reasonably request, the Company shall pay to the Management Stockholder the Repurchase Price; and the Employee Options subject to the Call Notice shall be cancelled and the Company shall pay the Management Stockholder the Cancellation Price therefor. The Company and the Management Stockholder each shall use his, her or its reasonable efforts to expedite all proceedings contemplated hereunder at the earliest practicable date.
(i) In the case of any transfer of title or beneficial ownership of Restricted Shares upon default, foreclosure, forfeit, divorce, court order or otherwise, other than by a voluntary decision on the part of a Management Stockholder (each, an "INVOLUNTARY TRANSFER"), the Management Stockholder shall promptly (but in no event later than two days after the Involuntary Transfer) furnish written notice (the "INVOLUNTARY TRANSFER NOTICE") to the Company indicating that the Involuntary Transfer has occurred, specifying the name of the person to whom the shares were transferred (the "INVOLUNTARY TRANSFEREE"), giving a detailed description of the circumstances giving rise to, and stating the legal basis for, the Involuntary Transfer.
(ii) Upon the receipt of the Involuntary Transfer Notice, and for a period of six months thereafter, the Company shall have the right to repurchase, and the Involuntary Transferee shall have the obligation to sell, all (but not less than all) of the Restricted Shares acquired by the Involuntary Transferee for a repurchase price equal to the Fair Market Value of such Restricted Shares as of the date of the Involuntary Transfer (the "INVOLUNTARY TRANSFER REPURCHASE PRICE" and such right, the "INVOLUNTARY TRANSFER REPURCHASE RIGHT"). The Involuntary Transfer Repurchase Right shall be exercised by written notice (the "INVOLUNTARY TRANSFER REPURCHASE NOTICE") to the Involuntary Transferee given in accordance with Section 9(h) of this Agreement on or prior to the last date on which the Involuntary Transfer Repurchase Right may be exercised by the Company.
(iii) Subject to Section 2(g) below, the repurchase of Restricted Shares pursuant to the exercise of the Involuntary Transfer Repurchase Right shall take place on a date specified by the Company, but in no event following the later of the 60th day following the date of the date of the Involuntary Transfer Repurchase Notice or the 10th day following the receipt by the Company of all necessary Governmental Approvals. On such date, the Involuntary Transferee shall transfer the Restricted Shares subject to the Involuntary Transfer Repurchase Notice to the Company, free and clear of all liens and encumbrances, by delivering to the Company the certificates representing the Restricted Shares to be purchased, duly endorsed for transfer to the Company or accompanied by a stock power duly executed in blank, with such other documents and information as the Company may reasonably request, and the Company shall pay to the Involuntary Transferee the Involuntary Transfer Repurchase Price. The Company and the Involuntary Transferee each shall use his, her or its reasonable efforts to expedite all proceedings contemplated hereunder at the earliest practicable date. If the Involuntary Transferee does not transfer the Restricted Shares to the Company as required, such Restricted Shares shall be deemed to be cancelled and the Company shall make payment in respect of such Restricted Shares, without any interest accrued thereon, upon delivery thereof.
(g) Notwithstanding anything to the contrary herein,
(i) The Company shall not be permitted to purchase any Restricted Shares held by any Management Stockholder or Involuntary Transferee upon exercise of the Call Right or the Involuntary Transfer Repurchase Right if the Board determines that:
(A) The purchase of Restricted Shares would render the Company or its subsidiaries unable to meet their obligations in the ordinary course of business taking into account any pending or proposed transactions, capital expenditures or other budgeted cash outlays by the Company, including, without limitation, any proposed acquisition of any other entity by the Company or any of its subsidiaries;
(B) The Company is prohibited from purchasing the Restricted Shares by applicable law restricting the purchase by a corporation of its own shares; or
(C) The purchase of Restricted Shares would constitute a breach of, default, or event of default under, or is otherwise prohibited or limited by, the terms of any loan agreement, indenture, or other agreement or instrument to which the Company or any of its subsidiaries is a party (the "FINANCING DOCUMENTS") or the Company is not able to obtain the requisite consent of any of its senior lenders to the purchase of the Restricted Shares. The events described in (A) through (C) above each constitute a "REPURCHASE DISABILITY."
(ii) In the event of a Repurchase Disability, the Company shall notify in writing the Management Stockholder or Involuntary Transferee with respect to whom the Call Right or the Involuntary Transfer Repurchase Right has been exercised (a "DISABILITY NOTICE"). The Disability Notice shall specify the nature of the Repurchase Disability. The Company shall thereafter repurchase the Restricted Shares (and/or cancel Employee Options) described in the Call Notice or Involuntary Transfer Repurchase Notice as soon as reasonably practicable after all Repurchase Disabilities cease to exist (or the Company may elect, but shall have no obligation, to cause its nominee to repurchase the Restricted Shares (and/or cancel Employee Options) while any Repurchase Disabilities continue to exist). In the event the Company suspends its obligations to repurchase the Restricted Shares (and/or cancel Employee Options) pursuant to a Repurchase Disability, (A) the Company shall provide written notice to each applicable Management Stockholder or Involuntary Transferee as soon as practicable after all Repurchase Disabilities cease to exist (the "REINSTATEMENT NOTICE"); (B) the Fair Market Value of the Restricted Shares subject to the Call Notice or Involuntary Transfer Repurchase Notice shall be determined as of the date the Reinstatement Notice is delivered to the Management Stockholder or Involuntary Transferee, which Fair Market Value shall be used to determine the Repurchase Price or Involuntary Transfer Repurchase Price in the manner described above; and (C) the repurchase shall occur on a date specified by the Company within 10 days following the determination of the Fair Market Value of the Shares.
Appears in 1 contract
Samples: Management Stockholders Agreement (Marquee Holdings Inc.)
