Earnout Clause Samples
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Earnout. (a) Following the Closing, and as additional consideration for the Merger and the transactions contemplated hereby, within five (5) Business Days after the occurrence of a Triggering Event (or if a Triggering Event occurs prior to Closing, within twenty (20) Business Days after the Closing Date) or the Final Earnout Distribution Date (in accordance with Section 3.4(a)(iv)), as applicable, Acquiror shall issue or cause to be issued to each Eligible Company Equityholder as of such date (in each case accordance with its respective Pro Rata Share) shares of Acquiror Common Stock (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to Acquiror Common Stock occurring after the Closing) (such shares, the “Earnout Shares”), upon the terms and subject to the conditions set forth in this Agreement; provided, however, that any Earnout Shares issued in respect of a Company Restricted Stock Award exchanged for an Adjusted Restricted Stock Award that remains unvested as of the Triggering Event (each such Adjusted Restricted Stock Award, an “Unvested Adjusted Restricted Stock Award” and any such Earnout Shares issued in connection therewith pursuant to this Section 3.4, the “Unvested Restricted Stock Award Earnout Shares”) shall vest in equal amounts (or as close as possible, with any excess shares vesting on the last vesting date) over the remaining vesting schedule of the applicable Adjusted Restricted Stock Award, and shall be subject to the same vesting conditions as applied to such Unvested Adjusted Restricted Stock Award; provided, further, that any such issuance of Earnout Shares will not be made to any Eligible Company Equityholder for which a filing under the HSR Act is required in connection with the issuance of Earnout Shares, until the applicable waiting period under the HSR Act has expired or been terminated:
(i) Upon the occurrence of Triggering Event I, a one-time issuance of one-third (1/3) of the Aggregate Earnout Shares minus any Earnout RSUs issued pursuant to Section 3.4(b) in connection with Triggering Event I;
(ii) Upon the occurrence of Triggering Event II, a one-time issuance of one-third (1/3) of the Aggregate Earnout Shares, plus any Forfeited Earnout Shares since Triggering Event I, minus any Earnout RSUs that are issued in connection with or otherwise remain outstanding a...
Earnout. (a) Sponsor hereby agrees that if, at the end of the Earn-Out Period no Earn-Out Vesting Event shall have occurred, then Sponsor shall, no later than ten (10) Business Days following the end of the Earn-Out Period, contribute, transfer, assign, convey and deliver to PubCo, and PubCo shall acquire and accept from Sponsor all of Sponsor’s right, title, and interest in, to and under, the Earn-Out Shares, for nil consideration (such Earn-Out Shares so contributed, transferred assigned, conveyed and delivered to PubCo by Sponsor, the “Earn-Out Forfeiture Shares”).
(b) PubCo and Sponsor acknowledge and agree that (i) each Earn-Out Forfeiture Share, when so contributed, transferred assigned, conveyed and delivered to PubCo by Sponsor in accordance with Section 7.2(a), shall be and be deemed to have been (x) surrendered and forfeited to PubCo by Sponsor for nil consideration and (y) cancelled by PubCo immediately upon surrender and forfeiture and cease to be issued and outstanding; and (ii) any other PubCo Shares which are not Earn-Out Forfeiture Shares shall continue to be issued and outstanding and owned by Sponsor for its own account.
(c) In addition to and not in place of the transfer restrictions set forth in Article V (and, for the avoidance of doubt, not limited by the exceptions or conditions set forth therein), subject to the consummation of the Initial Merger and the Acquisition Merger, Sponsor covenants and agrees that it shall not, during the period commencing on the Acquisition Effective Time and ending on the earlier to occur of (i) an Earn-Out Vesting Event or (ii) the last day of the Earn-Out Period (the “Earn-Out Restricted Period”), effect, undertake, enter into or publicly announce any Transfer with respect to any Earn-Out Shares. For the avoidance of doubt, Sponsor shall retain all of its rights as a shareholder of PubCo with respect to the Earn-Out Shares during the Earn-Out Restricted Period, including, without limitation, the right to vote any Earn-Out Shares that are entitled to vote, the right to appoint a proxy with respect to any vote of any Earn-Out Shares, and the right to receive any dividends or distributions in respect of such Earn-Out Shares. The foregoing restrictions in this Section 7.2(c) shall not apply to (i) Transfers of Earn-Out Shares in the event of completion of an Unqualified Liquidation Event; or (ii) Transfers required by Law. If any Transfer is made contrary to the provisions of this Section 7.2(c), such purported Tra...
Earnout. (a) Pursuant to the Merger, there shall be issued to each holder of a share of SpinCo Common Stock and each holder of a SpinCo Equity Award, their pro rata portion, as determined in accordance with the terms of Section 3.1(a) and the Employee Matters Agreement, as applicable, of an aggregate of 15,000,000 shares of Domesticated Parent Common Stock (without duplication), subject to the forfeiture provisions set forth in Section 3.3(d) (the “Earnout Shares”).
(b) The Earnout Shares shall be subject to the following vesting conditions:
(i) If, at any time during the period commencing on the Closing Date and ending on the date that is five years after the Closing Date (the “Earnout Period”), the Parent Trading Price is greater than or equal to $12.50, 50% of the Earnout Shares held by each holder of Earnout Shares shall immediately vest and no longer be subject to the forfeiture conditions provided in Section 3.3(d).
(ii) If, at any time during the Earnout Period, the Parent Trading Price is greater than or equal to $15.00, the remaining 50% of the Earnout Shares held by each holder of Earnout Shares shall immediately vest and no longer be subject to the forfeiture conditions provided in Section 3.3(d).
(c) For the avoidance of doubt, if the vesting conditions applicable to more than one of the provisions of Section 3.3(b) have been satisfied at any one time, then all of the Earnout Shares subject to such satisfied vesting conditions shall immediately vest and no longer be subject to the forfeiture conditions provided in Section 3.3(d).
(d) If, upon the expiration of the Earnout Period, the vesting of any of the Earnout Shares has not occurred, then the applicable Earnout Shares that failed to vest pursuant to Section 3.3(b), as applicable, shall be automatically forfeited and deemed transferred to Parent for cancellation for no consideration, and no Person (other than Parent) shall have any further right with respect thereto.
(e) If, during the Earnout Period, the Domesticated Parent Common Stock outstanding as of immediately following the Merger Effective Time shall have been changed into a different number of shares or a different class, by reason of any Equity Adjustment, or any similar event shall have occurred, then the applicable Parent Trading Price specified in Section 3.3(b) shall be equitably adjusted to reflect such change.
(f) If, during the applicable portion of the Earnout Period, there is a Change of Control that will result in the holders of D...
Earnout. (a) At the Closing, subject to the terms and conditions set forth herein, Pubco shall cause the holders of Company Interests immediately prior to the Closing (collectively, the “Earnout Participants”) to be issued an aggregate of an additional Two Million (2,000,000) shares of Pubco Class A Common Stock (the “Earnout Shares”), which shall be unvested and subject to forfeiture, as described in this Section 1.10. The Earnout Shares shall vest upon the first to be satisfied of any of the following conditions:
(i) if, at any time during the period beginning on the Closing Date and ending on the fifth (5th) anniversary of the Closing (the “Earnout Period”), the closing price of the Pubco Class A Common Stock as reported on the Stock Exchange is greater than or equal to $15.00 (the “Earnout Price”) for a period of at least 20 days (which need not be consecutive) out of 30 consecutive trading days, all of the Earnout Shares shall immediately vest; and
(ii) in the event that there is a Sale of Pubco during the Earnout Period, and the holders of Pubco Common Stock receive a Sale Price that is greater than or equal to the Earnout Price, all of the Earnout Shares shall immediately vest.
(b) The number of Earnout Shares to be issued to each Earnout Participant shall be equal to the product of Two Million (2,000,000) and the percentage set forth opposite such Earnout Participant’s name on Schedule 1.9, rounded down to the nearest whole number.
(c) In the event that there is a Sale of Pubco during the Earnout Period, and immediately prior to (but subject to) the consummation of the Sale, the holders of Pubco Common Stock receive a Sale Price that is less than the Earnout Price, (i) if such Sale Price is payable in cash or in the form of privately held securities or other consideration other than publicly tradable securities, then all of the Earnout Shares shall be deemed forfeited and cancelled for no consideration or (ii) if such price is payable in the form of publicly tradable securities, then Pubco shall cause the acquiror in such Sale to provide for the conversion of all of the Earnout Shares into the kind and amount of such publicly tradable securities receivable upon such Sale of Pubco that the holders of Pubco Common Stock receive in such Sale and shall provide that the Earnout Shares, as so converted, shall remain subject to vesting as set forth in this Section 1.10, with an appropriate adjustment to the Earnout Price to provide to the Earnout Participants the ...
Earnout. Following the Closing Date, the Merger Consideration may be increased as follows: the Shareholders shall be eligible to receive, on a pro rata basis determined based on their percentage of the total number of outstanding shares of iLead Common Stock shown on Schedule 4.7, a contingent consideration payment (the “Earnout Payment”) based on the Pre-Tax Earnings Amount. Such Earnout Payment, if any, shall be made by THK to the Shareholders in an amount based upon the earnings target reached as set forth below, fifty percent (50%) of which (less the Bonus Pool Amount) shall be payable in cash by wire transfer of immediately available funds and fifty percent (50%) of which shall be payable in THK Common Stock valued at the average closing price (in U.S. Dollars) per share of THK Common Stock on the last five trading days of the First Twelve Quarters. The Earnout Payment shall be payable as follows:
(a) If the Pre-Tax Earnings Amount is less than $533,333, then no Earnout Payment shall be payable to the Shareholders;
(b) If the Pre-Tax Earnings Amount is equal to or between $533,333 and $1,199,999, then the Earnout Payment shall be equal to Three Million Dollars ($3,000,000) less the Bonus Pool Amount and be payable to the Shareholders;
(c) If the Pre-Tax Earnings Amount is equal to or between $1,200,000 and $1,866,665, then the Earnout Payment shall be equal to Six Million Dollars ($6,000,000) less the Bonus Pool Amount and be payable to the Shareholders;
(d) If the Pre-Tax Earnings Amount is equal to or between $1,866,666 and $2,533,332, then the Earnout Payment shall be equal to Nine Million Dollars ($9,000,000) less the Bonus Pool Amount and be payable to the Shareholders;
(e) If the Pre-Tax Earnings Amount is equal to or between $2,533,333 and $3,199,999, then the Earnout Payment shall be equal to Twelve Million Dollars ($12,000,000) less the Bonus Pool Amount and be payable to the Shareholders;
(f) If the Pre-Tax Earnings Amount is equal to or between $3,200,000 and $3,866,665, then the Earnout Payment shall be equal to Fifteen Million Dollars ($15,000,000) less the Bonus Pool Amount and be payable to the Shareholders; and
(g) If the Pre-Tax Earnings Amount is equal to $3,866,666 or higher, then the Earnout Payment shall be equal to Eighteen Million Dollars ($18,000,000) less the Bonus Pool Amount and be payable to the Shareholders. The Earnout Payment, if required to be delivered by THK to the Shareholders as described above, shall be delivered by THK to ...
Earnout. (a) After the Closing, subject to the terms and conditions set forth in this Section 4.4, the Company Shareholders as will be set forth in Exhibit H to the Acquisition Agreement (the “Earnout Shareholders”) shall have the right to receive in the aggregate up to a maximum of an additional 4,000,000 Purchaser Class A Ordinary Shares (subject to equitable adjustment for share splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities into which such shares are exchanged or converted) (the “Earnout Shares”). The Earnout Shareholders’ right to receive the Earnout Shares shall vest and become due and issuable as follows:
(i) in the event that, between one (1) month after the Closing Date and the date that is twelve (12) months after the Closing Date, the VWAP of the Purchaser Class A Ordinary Shares over any twenty (20) Trading Days within any thirty (30) Trading Day period is greater than or equal to $15 (“Earnout Event 1”), then the Earnout Shareholders shall be entitled to receive 1,000,000 Earnout Shares, with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(ii) in the event that the revenue of the Purchaser and its Subsidiaries on a consolidated basis by or before the first full fiscal year after the Closing Date, calculated based on a full fiscal year, as set forth in the consolidated audited financial statements in the annual report of the Purchaser for that year, is equal to or exceeds $50,000,000 (“Earnout Event 2”), then the Earnout Shareholders shall be entitled to receive 1,000,000 Earnout Shares, with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(iii) in the event that the revenue of the Purchaser and its Subsidiaries on a consolidated basis by or before the second full financial year after the Closing Date, calculated based on a full fiscal year, as set forth in the consolidated audited financial statements in the annual report of the Purchaser for that year, is equal to or exceeds $100,000,000 (“Earnout Event 3”), then the Earnout Shareholders shall be entitled to receive 2,000,000 Earnout Shares, less any Earnout Shares previously issued in connection with Earnout Event 2, such that any Earnout Shares already issued under Earnout Event 2 shall not be reissued under this Section 4.4(a)(iii), with each Earnout Shareholder receiving its Pro Rata Portion thereof.
(iv) in the event that the revenue of the Purchaser and its Subsidiaries on ...
Earnout. (a) Following the Closing, and as additional contingent consideration for the Mergers and the other Transactions, within ten (10) Business Days after the occurrence of an Earnout Event, PubCo shall issue or cause to be issued to such shareholders of the Company (the “Earnout Participants,” as listed on the Schedule I attached hereto) pro rata the following additional shares of PubCo Ordinary Shares (which shall be equitably adjusted for share subdivisions, share consolidations, share dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to PubCo Ordinary Shares occurring on or after the date hereof, the “Earnout Shares” as set forth on Schedule I), upon the terms and subject to the conditions set forth in this Agreement and the other Ancillary Agreements:
(i) upon the occurrence of Earnout Event I, a one-time issuance of 15,000,000 Earnout Shares; and
(ii) upon the occurrence of Earnout Event II, a one-time issuance of 20,000,000 Earnout Shares.
(b) For the avoidance of doubt, the Earnout Participants shall be entitled to receive Earnout Shares upon the occurrence of each Earnout Event.
(c) No Earnout Shares issuable pursuant to this Section 2.8, if any, shall be released to any Company Shareholder who is required to file notification pursuant to the HSR Act or under any applicable antitrust or other competition Laws of any non-U.S. jurisdictions (collectively, “Foreign Antitrust Laws”) until any applicable waiting period pursuant to the HSR Act or Foreign Antitrust Laws has expired or been terminated (provided, that any such Company Shareholder has notified PubCo of such required filing pursuant to the HSR Act or Foreign Antitrust Laws in connection therewith following reasonable advance notice from PubCo of the reasonably anticipated issuance of Earnout Shares).
Earnout. (i) From and after the period commencing on the six month anniversary of the Closing until December 31, 2025, (the “First Calculation Period”), in the event that over any twenty (20) consecutive Trading Days within any thirty (30)-Trading Day period during the First Calculation Period the daily VWAP of the shares of Parent Common Stock is greater than or equal to US$15.00 per share (the “First Earnout Event”), promptly (but in any event within ten (10) Business Days) after the occurrence of the First Earnout Event, the Persons that were Company Securityholders immediately prior to the Effective Time (the “Earnout Securityholders”) shall be entitled to receive, their Pro Rata Portion, as set forth in the Closing Consideration Spreadsheet, of one third of the Incentive Merger Consideration as additional consideration for the Merger.
(ii) From and after the six month anniversary of the Closing until December 31, 2027 (the “Second Calculation Period”), in the event that over any twenty (20) Trading Days within any thirty (30)-Trading Day period during the Second Calculation Period the daily VWAP of the shares of Parent Common Stock is greater than or equal to US$20.00 per share (the “Second Earnout Event”), promptly (but in any event within ten (10) Business Days) after the occurrence of the Second Earnout Event, Earnout Securityholders shall be entitled to receive, their Pro Rata Portion, as set forth in the Closing Consideration Spreadsheet, of an additional one third of the Incentive Merger Consideration as additional consideration for the Merger.
(iii) From and after the six month anniversary of the Closing until December 31, 2029 (the “Third Calculation Period”), in the event that over any twenty (20) Trading Days within any thirty (30)-Trading Day period during the Third Calculation Period the daily VWAP of the shares of Parent Common Stock is greater than or equal to US$25.00 per share (the “Third Earnout Event” and, together with the First Earnout Event and Second Earnout Event, each a “Earnout Event” and together, the “Earnout Events”), promptly (but in any event within ten (10) Business Days) after the occurrence of the Third Earnout Event, the Earnout Securityholders shall be entitled to receive, their Pro Rata Portion, as set forth in the Closing Consideration Spreadsheet, of an the final one third of the Incentive Merger Consideration, as additional consideration for the Merger.
Earnout. (a) Following the Closing, as additional consideration for the Merger, within five (5) Business Days after the occurrence of a Triggering Event, DCRB shall issue or cause to be issued to the Eligible Company Equityholders (in accordance with their Applicable Earnout Share), the following number of shares of DCRB Class A Common Stock (which number shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to DCRB Class A Common Stock occurring on or after the Closing and prior to the date of such payment (other than the conversion of the DCRB Founders Stock into DCRB Class A Common Stock at the Closing), the “Earnout Shares”), upon the terms and subject to the conditions set forth in this Agreement and the Ancillary Agreements:
(i) upon the occurrence of Triggering Event I, a one-time issuance of 9,000,000 Earnout Shares;
(ii) upon the occurrence of Triggering Event II, a one-time issuance of 9,000,000 Earnout Shares; and
(iii) upon the occurrence of a Triggering Event III, a one-time issuance of 5,250,000 Earnout Shares.
(b) For the avoidance of doubt, the Eligible Company Equityholders shall be entitled to receive Earnout Shares upon the occurrence of each Triggering Event; provided, however, that each Triggering Event shall only occur once, if at all, and in no event shall the Eligible Company Equityholders be entitled to receive more than an aggregate of 23,250,000 Earnout Shares; provided, further, that in no event shall the issuance of Earnout Shares upon the occurrence of a Triggering Event III occur prior to the one (1) year anniversary of the Closing Date.
(c) If, during the Earnout Period, there is a Change of Control pursuant to which DCRB or its stockholders have the right to receive consideration implying a value per share of DCRB Class A Common Stock (as agreed in good faith by the Sponsor and the DCRB Board) of:
(i) less than $18.00, then this Section 3.03 shall terminate and no Earnout Shares shall be issuable hereunder;
(ii) greater than or equal to $18.00 but less than $20.00, then, only in the event that no other Earnout Shares have been issued prior to the date of such Change of Control, (A) immediately prior to such Change of Control, DCRB shall issue 9,000,000 shares of DCRB Class A Common Stock to the Eligible Company Equityholders in accordance with each Eligible Company Equ...
Earnout. After the Closing, subject to the terms and conditions set forth herein, certain Company Stockholders (collectively, the “Earnout Participants”), as more particularly described on Annex I hereto, shall have the contingent right to receive up to an aggregate maximum of 15,000,000 shares of Pubco Class A Common Stock (the “Earnout Shares”), to be allocated among the Earnout Participants as set forth on Annex I, as additional consideration from Pubco based on the performance of the Pubco Class A Common Stock, as follows:
(a) In the event that the VWAP of the Pubco Class A Common Stock equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “First Share Price Target”) for twenty (20) out of any thirty (30) Trading Days during the period beginning on the Closing Date and ending on the date that is thirty-six (36) months after the Closing Date (the “Earnout Period”), then, subject to the terms and conditions of this Agreement, Pubco shall issue to the Earnout Participants 5,000,000 Earnout Shares (the “First Earnout Share Payment”).
(b) In the event that the VWAP of the Pubco Class A Common Stock equals or exceeds $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Second Share Price Target”) for twenty (20) out of any thirty (30) Trading Days during the Earnout Period, then, subject to the terms and conditions of this Agreement, Pubco shall issue to the Earnout Participants 5,000,000 Earnout Shares (the “Second Earnout Share Payment”).
(c) In the event that the VWAP of the Pubco Class A Common Stock equals or exceeds $17.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) (the “Third Share Price Target”, and together with the First Share Price Target and the Second Share Price Target, the “Share Price Targets”) for twenty (20) out of any thirty (30) Trading Days during the Earnout Period, then, subject to the terms and conditions of this Agreement, Pubco shall issue to the Earnout Participants 5,000,000 Earnout Shares (the “Third Earnout Share Payment”, and together with the First Earnout Share Payment and the Second Earnout Share Payment, the “Earnout Share Payments”).