Opinion ID: 2402127
Heading Depth: 1
Heading Rank: 3

Heading: Warrantholders' Key Protections

Text: Before exercising their Warrants, the plaintiffs and other Warrantholders, as a matter of law, did not possess nor could they exercise any rights as stockholders of United Artists. Although the Warrants had a seven-year term, the equity element of the Warrants could lapse before the expiration of that term in certain circumstances, such as the occurrence of a merger. In such circumstances, the Warrantholders were protected by a standard anti-destruction provision, which states in pertinent part: In case of any reclassification or change of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the exercise of this Warrant) or any similar corporate reorganization on or after the date hereof, then and in each such case, the Registered Holder of this Warrant, upon the exercise hereof at any time after the consummation of such reclassification, change, reorganization, merger or conveyance, shall be entitled to receive, in lieu of the shares or other securities and property receivable upon the exercise hereof prior to such consummation, the shares or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised this Warrant immediately prior thereto .... [3] In connection with the restructuring, the equity-holders in the restructured United Artists were required to enter into a Stockholders Agreement, to which the Warrantholders would become bound in the event they exercised the Warrants. [4] Under that Stockholders Agreement, the stockholders had the right and the obligation to participate in any Change of Control transaction. The term Change of Control was defined as: any transaction (whether by merger, consolidation, sale of assets or otherwise), or series of related transactions within a six (6) month period, pursuant to which [the particular Anschutz-controlled entity that was then the controlling stockholder of United Artists] and its Affiliates (as a group) cease to Beneficially Own at least 25% of the issued and outstanding shares of capital stock of the Company having the right to vote (in the aggregate). The term Affiliate was broadly defined in the Stockholders Agreement and encompassed any of the UA Holders, or any other entity controlled, directly or indirectly, by the UA Holders or Anschutz himself.