Limitation on Dividends and Stock Redemptions Sample Clauses
The Limitation on Dividends and Stock Redemptions clause restricts a company’s ability to pay dividends to shareholders or repurchase its own stock under certain conditions. Typically, this clause applies when the company has outstanding debt or must maintain specific financial ratios, and it may prohibit or limit such payments until those obligations are met. Its core function is to protect creditors and ensure the company retains sufficient capital to meet its financial commitments, thereby reducing the risk of insolvency or default.
Limitation on Dividends and Stock Redemptions. The Company shall not, and shall not permit any Subsidiary to, declare or pay any dividends on its capital stock (other than dividends payable in its own capital stock) or redeem, repurchase or otherwise acquire or retire any capital stock of the Company or any Subsidiary or any warrant, option or other right in respect thereof, except (i) any Subsidiary may declare and pay dividends to, or repurchase its capital stock from, the Company or another Subsidiary (except that no Subsidiary that is a Guarantor may declare or pay any dividend to, or purchase its capital stock from, a Subsidiary that is not a Guarantor); (ii) the Company may purchase shares of its capital stock pursuant to the requirements of its employee benefit plans; and (iii) the Company may declare and pay cash dividends and repurchase additional shares of its capital stock or warrants, options or other rights in respect thereof (any of the foregoing actions described in this clause (iii), a “Restricted Payment”); provided that the Company shall not make any Restricted Payment if (a) at the time of such Restricted Payment, the Debt Rating is less than BB+ by S&P or less than Ba1 by ▇▇▇▇▇’▇ or a Default or an Event of Default exists or would result from such Restricted Payment and (b) after giving effect to such Restricted Payment, the aggregate amount of Restricted Payments made in the then-current fiscal year would exceed the greater of (I) $150,000,000 and (II) the sum of (x) the aggregate amount of Restricted Payments made on or prior to the most recent day during such fiscal year (if any) on which none of the conditions described in the preceding clause (a) were in effect and (y) the product of $37,500,000 multiplied by the number of fiscal quarters ended during such fiscal year after the day described in the preceding clause (x).
Limitation on Dividends and Stock Redemptions. At any time that the S&P Rating is lower than BBB- or the ▇▇▇▇▇’▇ Rating is lower than Baa3, the Company shall not, nor shall it permit any Subsidiary to, declare or pay any dividends on its capital stock (other than dividends payable in its own capital stock) or redeem, repurchase or otherwise acquire or retire any of its capital stock at any time outstanding (or any warrant, option or other right in respect thereof), except (i) any Subsidiary may declare and pay dividends to the Company or to a Wholly-Owned Subsidiary; (ii) any Subsidiary may repurchase its capital stock; (iii) the Company may purchase shares of its capital stock pursuant to the requirements of its employee benefit plans; and (iv) the Company may declare and pay other cash dividends and repurchase its outstanding capital stock (or warrants, options or other rights in respect thereof) in an aggregate amount not exceeding in any fiscal year the sum of (x) the Specified Amount (as defined below) plus (y) the excess of the Specified Amount for the immediately prior fiscal year over the aggregate amount of cash dividends paid during the immediately prior fiscal year. For purposes of the foregoing, “Specified Amount” means $50,000,000 plus, if the Company issues common stock as consideration in any Acquisition (a “Share Increase Event”), an amount equal to the product of (A) the number of shares of common stock converted or issued in connection with such Share Increase Event divided by the total number of shares outstanding immediately prior to such Share Increase Event multiplied by (B) the Specified Amount immediately prior to such Share Increase Event (after giving effect to any prior Share Increase Event).
Limitation on Dividends and Stock Redemptions. Section 8.06(e)(i) is amended and restated in its entirety to read as follows:
(i) the Borrower may declare or pay cash dividends to its stockholders and purchase, redeem or otherwise acquire shares of its Capital Stock or warrants, rights or options to acquire any such shares for cash solely; provided that all such dividends or acquisition of shares for cash in any period of four consecutive fiscal quarters (including the fiscal quarter in which any such dividend or acquisition may be made) shall not exceed (A) an amount equal to twenty-five percent (25%) of Consolidated EBITDA for the period of four consecutive fiscal quarters as of the last day of the fiscal quarter most recently ended, if the Consolidated Total Leverage Ratio, on a Pro Forma Basis, is greater than or equal to 1.0 to 1.0, or (B) an amount equal to fifty percent (50%) of Consolidated EBITDA for the period of four consecutive fiscal quarters as of the last day of the fiscal quarter most recently ended, if the Consolidated Total Leverage Ratio, on a Pro Forma Basis, is less than 1.0 to 1.0; and provided further that the Borrower may make additional dividends or acquisitions of shares for cash in connection with the issuance of Subordinated Debt otherwise permitted hereunder, in an amount up to thirty-five percent (35%) of the Net Cash Proceeds received therefrom, so long as the maturity of the subject Subordinated Debt is at least 180 days beyond the Revolving Termination Date then applicable hereunder and the dividend is made or the shares are acquired substantially concurrently with the issuance of the subject Subordinated Debt;
Limitation on Dividends and Stock Redemptions. The Company shall not, nor shall it permit any Subsidiary to, declare or pay any dividends on its capital stock (other than dividends payable in its own capital stock) or redeem, repurchase or otherwise acquire or retire any of its capital stock at any time outstanding, except (i) any Subsidiary may declare and pay dividends to the Company or to a Wholly-Owned Subsidiary; (ii) any Subsidiary may repurchase its capital stock; (iii) the Company may purchase shares of its capital stock pursuant to the requirements of its employee benefit plans; and (iv) the Company may declare and pay cash dividends in any fiscal year in an aggregate amount not exceeding the Specified Amount (as defined below). For purposes of the foregoing, "Specified Amount" means $35,000,000 plus, to the extent any of the 5.00% Convertible Senior Notes due May 15, 2006 issued by the Company are converted to common stock of the Company or the Company issues common stock as consideration in any Acquisition (each a "Share Increase Event"), an amount equal to the product of (i) the number of shares of common stock converted or issued in connection with such Share Increase Event divided by the total number of shares outstanding immediately prior to such Share Increase Event multiplied by (ii) the Specified Amount immediately prior to such Share Increase Event (after giving effect to any prior Share Increase Event).