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that the business and affairs of the corporation shall be
conducted subject to the terms and conditions hereof.” Among the
actions that can be taken only by unanimous vote of the Board of
Directors are: “(i) obligating the Corporation to participate in
any exhibition or exposition; * * * [and] (v) entering into any
extraordinary agreement or incurring any extraordinary expense
not in the usual and regular course of business * * *”.
Article 10 of the stockholders’ agreement, entitled
“Agreement Regarding Revenues”, provides “that the ‘net profits’
(as defined herein)4 to the Corporation from its exhibition and
exposition operations shall be allocated to the Stockholders”
under three different scenarios, depending on where “the
exhibition or exposition takes place”. Kogan’s percentage of net
profits under the three scenarios is always less than 20 percent
of net profits and equal to one-half of Pollak’s and Tseytin’s
percentages, which are always equal to each other. Under the
three scenarios, Agalarov’s percentages of net profits vary to
include 50 percent of net profits for trade shows in the former
Soviet Union, 10 percent of net profits for trade shows in
Romania, and 20 percent of net profits for trade shows in the
United States. The stockholders’ agreement does not refer to or
4The last sentence of Article 10 of the stockholders’
agreement provides: “For purposes hereof, the term net profits
means the gross revenues from the operations of the Corporation
less all cost and expenses and taxes.”
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Last modified: May 25, 2011