RESTRICTION ON PAYMENTS TO SHAREHOLDERS Clause Samples

The "Restriction on Payments to Shareholders" clause limits or prohibits a company from making certain payments, such as dividends, distributions, or share buybacks, to its shareholders. Typically, this clause applies during the term of a loan or financing agreement, ensuring that the company retains sufficient funds to meet its financial obligations, such as repaying lenders or maintaining operational stability. By restricting these payments, the clause protects creditors and other stakeholders by preventing the company from depleting its assets to the detriment of its financial health or contractual commitments.
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RESTRICTION ON PAYMENTS TO SHAREHOLDERS. Neither the Borrower nor the Guarantor shall declare, pay or make any dividend or distribution (in cash, property or obligations) on any shares of any class of capital stock (now or hereafter outstanding) of the Borrower or the Guarantor (other than Payments in Kind and shares of Series B Preferred Stock issued in payment of accrued dividends), or apply any of its funds, property or assets to the purchase, redemption, sinking fund or other retirement of, or agree to purchase or redeem any shares of any class of capital stock (now or hereafter outstanding) of the Borrower or the Guarantor, or any warrants, options or other rights with respect to any shares of any class of capital stock (now or hereafter outstanding) of the Borrower or the Guarantor; provided, however, that: (i) the Guarantor may declare and pay cash dividends and make cash interest payments for 1997 in an aggregate amount not to exceed $500,000.00; and (ii) the Borrower may declare and pay dividends and otherwise make distributions and payments to the Guarantor in order to, and in amounts sufficient to, permit the Guarantor to and the Guarantor shall be permitted to declare and pay cash dividends and make cash interest payments to its shareholders, to the holders of the Subordinated Debentures, in an amount not to exceed in the aggregate $500,000.00 (for dividends and interest payments combined), in 1997, on an accrual (not cash) basis, subject to the following conditions: (a) no more than $125,000.00 in dividends and interest payments, combined, may be made in any Quarter, on an accrual (not cash) basis, except that if for any reason all or any portion of such payment cannot be made in any Quarter, the amount not made in such Quarter may be cumulated and paid in subsequent Quarters until the end of the fiscal year (provided that no such payment may be carried over into the next fiscal year); (b) no quarterly or cumulative dividend or interest payment may be made if any Event of Default has occurred and is continuing, or if the Agent determines, in its reasonable judgment, that a potential Event of Default is likely to occur, based upon the information furnished to the Agent by the Borrower pursuant to Section 6.10 above; and (c) no quarterly or cumulative dividend or interest payment may be made in an amount which exceeds the consolidated cumulative (year-to-date) net income (as reduced by any quarterly losses in such year) of Aloha Airgroup, Inc., and its subsidiaries, Aloha Airlines, Inc...
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RESTRICTION ON PAYMENTS TO SHAREHOLDERS. Neither the Borrower nor its Subsidiaries shall declare, pay or make any dividend or distribution (in cash, property or obligations) on any shares of any class of capital stock (now or hereafter outstanding) of the Borrower or its Subsidiaries, or apply any of its funds, property or assets to the purchase, redemption, sinking fund or other retirement of, or agree to purchase or redeem any shares of any class of capital stock (now or hereafter outstanding) of the Borrower or its Subsidiaries, or any warrants, options or other rights with respect to any shares of any class of capital stock (now or hereafter outstanding) of the Borrower or its Subsidiaries, provided, however, that nothing in this Section 5.14 shall prohibit or restrict the Borrower's ability to perform its obligations under Section 7.9 of the Purchase Agreement.
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Related to RESTRICTION ON PAYMENTS TO SHAREHOLDERS

  • Restriction on Timing of Distributions Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Termination of Employment under such procedures as established by the Company in accordance with Section 409A of the Code, benefit distributions that are made upon Termination of Employment may not commence earlier than six (6) months after the date of such Termination of Employment, or if earlier, the date of death. Therefore, in the event this Section 2.5 is applicable to the Executive, any distribution which would otherwise be paid to the Executive within the first six months following the Termination of Employment shall be accumulated and paid in a lump sum on the first day of the seventh month following the Termination of Employment, or, if earlier, within sixty (60) days from the date of the Executive’s death. All subsequent distributions shall be paid in the manner specified.

  • Restriction on Sale Notwithstanding the Plan and any other provision of the Agreement to the contrary, the Grantee will not be permitted to sell any Ordinary Shares acquired under the Plan unless and until the necessary approvals have been obtained from the SAFE and remain effective, as determined by the Company in its sole discretion.

  • Limitation on Payments In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) but for this Section 5, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s benefits under Section 3 will be either: (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: (i) reduction of cash payments; (ii) cancellation of awards granted “contingent on a change in ownership or control” (within the meaning of Code Section 280G), (iii) cancellation of accelerated vesting of equity awards; (iv) reduction of employee benefits. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of Executive’s equity awards. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 will be made in writing by the Company’s independent public accountants immediately prior to a Change of Control or such other person or entity to which the parties mutually agree (the “Firm”), whose determination will be conclusive and binding upon Executive and the Company. For purposes of making the calculations required by this Section 5, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. The Company will bear all costs the Firm may incur in connection with any calculations contemplated by this Section 5.

  • Restriction on Timing of Distribution Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Separation from Service under such procedures as established by the Bank in accordance with Section 409A of the Code, benefit distributions that are made upon Separation from Service may not commence earlier than six (6) months after the date of such Separation from Service. Therefore, in the event this Section 2.5 is applicable to the Executive, any distribution which would otherwise be paid to the Executive within the first six months following the Separation from Service shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Separation from Service. All subsequent distributions shall be paid in the manner specified.

  • Restrictions on Payments An employee shall not be entitled to payment for inclement weather as provided for in this clause unless the employee remains on the job until the provisions set out in this clause have been observed.