Earnout Shares Clause Samples
The Earnout Shares clause defines the terms under which additional shares may be issued to a seller based on the future performance of the acquired business. Typically, this clause specifies performance targets—such as revenue or profit milestones—that must be met within a set period after closing for the seller to receive these extra shares. By linking part of the purchase price to post-closing results, the clause aligns incentives between buyer and seller and helps bridge valuation gaps during negotiations.
Earnout Shares. The parties hereto hereby agree that (x) 50% of the Pubco Ordinary Shares to be held by each Sponsor Member immediately following the Second Merger Effective Time and after giving effect to the Share Cancellation shall be fully vested and freely tradable, subject only to the restrictions set forth in that certain Letter Agreement, dated as of December 14, 2021, by and between the Sponsor Members and SPAC (as may be amended from time to time, the “Insider Letter Agreement”), and (y) the Sponsor Members will place, or cause to be placed, the remaining 50% of the Pubco Ordinary Shares to be issued to each Sponsor Member immediately following the Second Merger Effective Time and after giving effect to the Share Cancellation into escrow (the “Earnout Shares”) to be transferred to a mutually agreed upon escrow agent and held in such escrow pursuant to a customary escrow agreement to be mutually agreed upon by the Sponsor Members and Pubco, such escrow agent holding the number of Earnout Shares relating to any Sponsor Member as nominee of and for the benefit of such Sponsor Member, subject always to the terms of this Agreement and such escrow agreement. The Earnout Shares shall become fully vested such that they shall be released from escrow pursuant to such escrow agreement, and delivered to be held directly by the Sponsor Members immediately upon the satisfaction of the vesting and forfeiture as described below.
(a) The Earnout Shares shall become fully vested as described above if, at any time from the Second Merger Effective Time through the date that is the tenth anniversary of the Second Merger Effective Time the VWAP of Pubco Ordinary Shares is greater than or equal to $12.00 over any 20 trading days within any 30-day trading period (the “Triggering Event”); provided, that, the price target shall be equitably adjusted for stock splits, stock dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the Pubco Ordinary Shares. For purposes hereof, “VWAP” means, for any security as of any date(s), the dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in ...
Earnout Shares. (a) During the five (5)-year period from the one hundred and eightieth (180th) day following the Closing (the “Earnout Period”), AMPSA shall, upon the occurrence of any Triggering Event (as defined below), issue additional Shares to Ardagh (subject to any adjustments pursuant to Section 3.6(d)) as follows:
(i) 12,146,000 Shares (the “First Level Contingent Consideration”) if the AMPSA VWAP is greater than or equal to $13.00 over any ten (10) trading days within any thirty (30) trading day period during the Earnout Period (the “First Triggering Event”);
(ii) 12,146,000 Shares (the “Second Level Contingent Consideration”) if the AMPSA VWAP is greater than or equal to $15.00 over any ten (10) trading days within any thirty (30) trading day period during the Earnout Period (the “Second Triggering Event”);
(iii) 12,146,000 Shares (the “Third Level Contingent Consideration”) if the AMPSA VWAP is greater than or equal to $16.50 over any ten (10) trading days within any thirty (30) trading day period during the Earnout Period (the “Third Triggering Event”);
(iv) 12,146,000 Shares (the “Fourth Level Contingent Consideration”) if the AMPSA VWAP is greater than or equal to $18.00 over any ten (10) trading days within any thirty (30) trading day period during the Earnout Period (the “Fourth Triggering Event”); and
(v) 12,146,000 Shares (the “Fifth Level Contingent Consideration” and, together with the First Level Contingent Consideration, the Second Level Contingent Consideration, the Third Level Contingent Consideration and the Fourth Level Contingent Consideration, the “Contingent Consideration”) if the AMPSA VWAP is greater than or equal to $19.50 over any ten (10) trading days within any thirty (30) trading day period during the Earnout Period (the “Fifth Triggering Event” and, each of it and the First Triggering Event, the Second Triggering Event, the Third Triggering Event and the Fourth Triggering Event, a “Triggering Event”).
(b) Within five (5) Business Days after the occurrence of a Triggering Event, if at all, AMPSA shall issue or cause to be issued to Ardagh the applicable Contingent Consideration. Each tranche of Contingent Consideration in respect of a Triggering Event shall be paid only once, if at all; provided that the achievement of any higher level Triggering Event shall also cause any applicable lower level Triggering Event to be achieved, to the extent not previously achieved; provided, further, that for the avoidance of doubt, Ardagh shall not, s...
Earnout Shares. (a) At the Closing, a number of shares of DoveBid Series D-1 Preferred Stock, DoveBid Series C Preferred Stock, DoveBid Series DD Preferred Stock and DoveBid Common Stock, in the Relative Percentages, representing 66.67% of the DoveBid Common Stock Equivalents represented by the Total Shares (such shares, collectively, the "Earnout Shares") shall be issued to Seller but remain as uncertificated shares of DoveBid Capital Stock in the name of Seller for the number and kind of shares of DoveBid Capital Stock set forth in this Section 3.4(a) and held in escrow by DoveBid until such time as all or a portion of such shares of DoveBid Capital Stock are released pursuant to and in accordance with the provisions of this Section 3.4, Section 7.16 and Article 10. Any shares of DoveBid Common Stock or other equity securities issued or distributed by DoveBid (including shares issued upon a Capital Change) in respect of Earnout Shares (the "New Earnout Shares") shall be issued to each Interim Holder (or such Interim Holder's transferees) or, from and after the Dissolution, each Final Holder (or such Final Holder's transferees) according to its Pro Rata Share but remain as uncertificated shares of DoveBid Capital Stock in the name of each Interim Holder (or such Interim Holder's transferees) or, from and after the Dissolution, each Final Holder (or such Final Holder's transferees) according to its Pro Rata Share and held in escrow by DoveBid until such time as all or a portion of such shares of DoveBid Capital Stock are released pursuant to and in accordance with the provisions of this Section 3.4, Section 7.16 and Article 10. The Earnout Shares and any New Earnout Shares are collectively referred to herein as the "Earnout Fund." Cash dividends on the Earnout Fund shall not be added to the Earnout Fund but shall be distributed to the record holders of such Earnout Fund.
(b) DoveBid shall release the Earnout Fund to each Interim Holder (or such Interim Holder's transferees) or, from and after the Dissolution, each Final Holder (or such Final Holder's transferees) as follows:
(i) If, before the Closing, Seller obtains written commitments, in form and substance reasonably satisfactory to Buyer, from each of Ford Motor Company and Lucent Technologies and at least three other current customers of Seller, which commitments identify Seller as each such customer's current preferred vendor for asset management and disposition services and contain agreements by each such customer ...
Earnout Shares. The Stockholders shall be entitled to receive, as additional consideration for the Merger and without any action on the part of the Purchaser, Merger Sub, the Company or the Stockholders, additional shares of Purchaser Common Stock (the “Earnout Shares”) as set forth below. At the time any such Earnout Shares are earned and become issuable as provided below, (i) a total of 90.6% (rounded to the nearest whole share) of the Earnout Shares then earned and issuable shall be issued to the Stockholders on a pro-rata basis based on their Stockholder Per Share Percentage, and (ii) the remaining Earnout Shares that would otherwise have been issuable shall not be issuable to the Stockholders but in lieu thereof the number of authorized shares available for issuance under the Purchaser Equity Plan shall be automatically increased by an equivalent number of shares of Purchaser Common Stock.
(a) Following the Closing Date, if the daily volume weighted average price of Purchaser Common Stock in any 20 trading days within a 30 trading day period prior to the forty-two (42) month anniversary of the Closing Date is greater than or equal to $20.00 per share (the “First Earnout”), then the Stockholders shall be entitled to receive such number of additional shares of Purchaser Common Stock as equals the quotient of $20,000,000 divided by the Closing Price Per Share.
(b) Following the Closing Date, if the daily volume weighted average price of Purchaser Common Stock in any 20 trading days within a 30 trading day period prior to the six (6) year anniversary of the Closing Date is greater than or equal to $35.00 per share (the “Second Earnout”), then the Stockholders shall be entitled to receive such number of additional shares of Purchaser Common Stock as equals the quotient of $20,000,000 divided by the Closing Price Per Share.
(c) Following the Closing Date, if the daily volume weighted average price of Purchaser Common Stock in any 20 trading days within a 30 trading day period prior to the eight (8) year anniversary of the Closing Date is greater than or equal to $45.00 per share (the “Third Earnout” and together with the First Earnout and Second Earnout, the “Earnouts”), then the Stockholders shall be entitled to receive such number of additional shares of Purchaser Common Stock as equals the quotient of $20,000,000 divided by the Closing Price Per Share.
(d) In the event that after the Closing Date and during the period when any Earnout may still be earned (the “Earnout P...
Earnout Shares. In the event that (a) the Company’s Adjusted EBITDA for the twelve (12) month period commencing on the first full month that is after Closing Date (the “Earnout Period”)1 is $5,000,000 or more (the “Adjusted EBITDA Target) or (b) the closing JAC Stock Price is $12.00 or more after the Closing Date (the “Stock Price Target”) and prior to the end of the Earnout Period, the Company shall issue:
(i) 898,473 shares of JAC Common Stock to the Stockholders, pro rata in accordance with their ownership of Company Shares;
(ii) 11,231 shares of JAC Common Stock to Exit Strategy Partners, LLC; and
(iii) a number of shares of JAC Common Stock equal to (X) the number of JAC Obligation Shares minus (Y) 11,231 shares of JAC Common Stock to the Sponsors, pro rata in accordance with the number of shares forfeited by each Sponsor as contemplated by Section 2.8(i). If shares of JAC Common Stock become issuable pursuant to this Section 2.6, the Company shall issue or cause its transfer agent to issue such shares within ten (10) days after the filing of the Company’s Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as applicable, demonstrating achievement of the Adjusted EBITDA Target in the event that shares become issuable pursuant to Section 2 .6(b)(i) above and within five (5) days after the end of the applicable ten (10) trading day period in the event that the shares become issuable pursuant to Section 2.6(b)(i) above. The number of shares of JAC Common Stock issuable pursuant to this Section 2.6 shall be equitably adjusted in the event of a stock split, stock dividend, reverse stock split, reclassification, reorganization or similar transaction.
Earnout Shares. Prior to or as soon as practicable following the date of this Agreement, the Company shall take any action (including the giving of notice to the Accredited Sellers (as such term is defined in the Macro Agreement)) as is required by the Macro Agreement and the Macro Side Letters so that, in accordance with the terms of the Macro Agreement and the Macro Side Letters, the right to receive a share of Company Common Stock under the Macro Agreement and the Macro Side Letters shall be converted into the right to receive the Merger Consideration when and if such shares of Company Common Stock become issuable to the Accredited Sellers pursuant to the terms of the Macro Agreement and the Macro Side Letters.
Earnout Shares. Subject to the terms and conditions of this Agreement, at or prior to the Merger Closing, PubCo shall cause Seller to deposit the Earnout Shares into the Earnout Escrow Account (as defined below) to be released to the Seller or surrendered by the Seller to PubCo for forfeiture and cancellation subject to the surrender provisions set forth on Annex I hereto.
Earnout Shares. (a) Immediately prior to and contingent upon the Closing, a number of Sponsor Promote Shares set forth opposite each Sponsor’s name on Schedule I hereto (assuming no stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, or any similar event occurs between the date hereof and the Closing) shall immediately become subject to the vesting provisions set forth in Section 1.2(b) (such shares, the “Earnout Shares”) (it being understood that such Earnout Shares shall no longer be subject to the vesting provisions of the Letter Agreement (as defined below)). Earnout Shares shall continue to be Earnout Shares if held by any permitted transferee of Earnout Shares. For the avoidance of doubt, it is acknowledged and agreed that any shares of Parent Common Stock held by the Sponsors that are not Earnout Shares shall not be subject to the provisions of this Section 1.2.
Earnout Shares. The Company Equityholders shall be entitled to receive contingent consideration, if earned, payable (i) from the Company Contribution Effective Time until the Second Merger Effective Time, by US NewCo to Company Equityholders solely in US NewCo Interests, and (ii) at all times after the Second Merger Effective Time, by Bermuda NewCo to the Company Equityholders solely in Bermuda NewCo Shares (the “Earnout Shares”), upon the following events and in the following amounts:
(i) if Measurement EBITDA for the First Measurement Period as finally determined pursuant to Section 2.01(c) is equal to or greater than $10,500,000, then Bermuda NewCo shall issue to the Company Equityholders, within seven (7) business days of such date of final determination pursuant to Section 2.01(c), an aggregate number of Bermuda NewCo Shares equal to $15,000,000 divided by the First Bermuda NewCo Earnout Share Price, which shall be allocated among the Company Equityholders in accordance with the Allocation Schedule (in each case rounded to the nearest whole Bermuda NewCo Share);
(ii) if Measurement EBITDA for the Second Measurement Period as finally determined pursuant to Section 2.01(c) is equal to or greater than $15,750,000, then Bermuda NewCo shall issue to the Company Equityholders, within seven (7) business days of such date of final determination pursuant to Section 2.01(c), an aggregate number of Bermuda NewCo Shares equal to $15,000,000 divided by the Second Bermuda NewCo Earnout Share Price, which shall be allocated among the Company Equityholders in accordance with the Allocation Schedule (in each case rounded to the nearest whole Bermuda NewCo Share); and
(iii) if Measurement EBITDA for the Third Measurement Period as finally determined pursuant to Section 2.01(c) is equal to or greater than $21,000,000, then Bermuda NewCo shall issue to the Company Equityholders, within seven (7) business days of such date of final determination pursuant to Section 2.01(c), an aggregate number of Bermuda NewCo Shares equal to $15,000,000 divided by the Third Bermuda NewCo Earnout Share Price, which shall be allocated among the Company Equityholders in accordance with the Allocation Schedule (in each case rounded to the nearest whole Bermuda NewCo Share).
Earnout Shares. In addition to the Closing Merger Consideration, commencing 60 days following the Closing Date, the Holders shall be entitled to receive Earnout Shares, subject to the occurrence of the Triggering Events as hereinafter provided. The right to acquire the Earnout Shares shall expire in the event that such Earnout Shares are not earned, in accordance with Section 3.03(c), on or prior to the seventh anniversary of the Closing Date (the “Earnout Termination Date”).