Extraordinary Dividends or Distributions Clause Samples
The "Extraordinary Dividends or Distributions" clause defines how the parties will handle unusually large or non-recurring payments made by a company to its shareholders, such as special dividends or distributions of assets. This clause typically outlines the criteria for what constitutes an extraordinary dividend, how such events affect contractual obligations—like adjustments to purchase price, conversion rates, or other financial terms—and may specify notification or approval requirements. Its core function is to ensure fairness and maintain the intended economic balance of the agreement by addressing the impact of unexpected, significant payouts that could otherwise distort the value or terms of the deal.
Extraordinary Dividends or Distributions. If, at any time or from time to time after the date of this Note, the Maker shall declare a dividend or any other distribution upon the Common Stock payable otherwise than out of current earnings, retained earnings or earned surplus and otherwise than in shares of Common Stock, then the Conversion Price in effect immediately prior to such declaration shall be reduced by an amount equal, in the case of a dividend or distribution in cash, to the amount thereof payable per share of Common Stock or, in the case of any other dividend or distribution, to the value thereof per share of Common Stock at the time such dividend or distribution was declared, as determined by the Board of Directors of the Maker in good faith. Such reductions shall take effect as of the date on which a record is taken for the purposes of the subject dividend or distribution, or, if a record is not taken, the date as of which the holders of record of Common Stock entitled to such dividend or distribution are to be determined. Nothing contained in this Section 3(e)(vi) shall be deemed to permit the payment of any dividend in violation of the Loan Agreement.
Extraordinary Dividends or Distributions. If, at any time or from time to time after the issuance of this Warrant, the Company shall declare a dividend or any other distribution upon the Common Shares payable otherwise than out of current earnings, retained earnings or earned surplus and otherwise than in Common Shares, then the Exercise Price in effect immediately prior to such declaration shall be reduced by an amount equal, in the case of a dividend or distribution in cash, to the amount thereof payable per Common Share or, in the case of any other dividend or distribution, to the value thereof per Common Share at the time such dividend or distribution was declared, as determined by the Board of Directors of the Company in good faith. Such reductions shall take effect as of the date on which a record is taken for the purposes of the subject dividend or distribution, or, if a record is not taken, the date as of which the holders of record of Common Shares entitled to such dividend or distribution are to be determined.
Extraordinary Dividends or Distributions. If the Company, at any time after the date of this Agreement, pays a dividend or makes a distribution in cash, securities or other assets to the holders of Common Stock (in their capacity as such) or other shares of capital stock into which the Warrants are convertible, other than (i) a dividend or distribution described in Section 12(a)(i)(A), (ii) regular quarterly or other periodic dividends declared and paid pursuant to a dividend policy established by the Board not to exceed in any fiscal year of the Company twenty percent (20%) of the consolidated net income of the Company and its consolidated subsidiaries (determined in accordance with United States generally accepted accounting principles) for the immediately preceding fiscal year, (iii) distributions made to the holders of Common Stock upon the consummation of a Reorganization Event or (iv) dividends and distributions made in connection with the Company’s liquidation or dissolution (any such non-excluded dividends or distributions, an “Extraordinary Dividend”), then the Trigger Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, dollar-for-dollar by the amount of cash and/or the fair market value (as reasonably determined in good faith by the Board of Directors of the Company, without regard to any illiquidity or minority discounts) of any securities or other assets paid or distributed on each share of Common Stock in respect of such Extraordinary Dividend.
Extraordinary Dividends or Distributions. If the Company, at any time after the date of this Warrant Agreement, pays a dividend or makes a distribution in securities or other non-cash assets to the holders of Common Stock (in their capacity as such) or other shares of capital stock into which the Warrants are convertible, other than (i) a dividend or distribution described in Section 12(a)(i)(A), or (ii) distributions made to the holders of Common Stock upon the consummation of a Reorganization Event (any such non-excluded dividends or distributions, an “Extraordinary Dividend”), then the Exercise Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, dollar-for-dollar by the fair market value (as reasonably determined in good faith by the Board of Directors of the Company, without regard to any illiquidity or minority discounts) of any securities or other assets paid or distributed on each share of Common Stock in respect of such Extraordinary Dividend.
Extraordinary Dividends or Distributions. If, at any time or from time to time after the issuance of this Warrant, the Company shall declare a dividend or any other distribution upon its common stock in liquidation or payable otherwise than out of current earnings, retained earnings or earned surplus and otherwise than in shares of the Company's common stock, then the Exercise Price in effect immediately prior to such declaration shall be reduced by an amount equal, in the case of a dividend or distribution in cash, to the amount thereof payable per common share or, in the case of any other dividend or distribution, to the value thereof per common share at the time such dividend or distribution was declared, as determined by the Board of Directors of the Company in good faith. Such reductions shall take effect as of the date on which a record is taken for the purposes of the subject dividend or distribution, or, if a record is not taken, the date as of which the holders of record of common stock entitled to such dividend or distribution are to be determined.