Annual Work Program and Budget. For each Calendar Year, so long as the Joint Development Agreement is in effect, the Company shall prepare the Annual Work Program and Budget in accordance with the terms of the Joint Development Agreement and the Company shall be bound by the Annual Work Program and Budget approved pursuant to the terms of the Joint Development Agreement. For each Calendar Year (or partial Calendar Year) following the date upon which the Joint Development Agreement is terminated, an Annual Work Program and Budget shall be adopted as follows: (a) On or before August 15 in the Calendar Year immediately preceding the relevant Calendar Year (or, following the termination of the Joint Development Agreement, as promptly as practicable), the President and General Manager shall prepare, or cause to be prepared, and submit to the Management Board a proposed Annual Work Program and Budget for such applicable Calendar Year. Each such proposed Annual Work Program and Budget shall contain at least the following: (i) inclusion of expenditures required by the Company under the terms of any Company Contract during such Calendar Year, except with the approval of such Management Board to the contrary; (ii) an itemized estimate of the Appalachian Overhead and Company Operating Expenses for such Calendar Year; (iii) itemized estimates of the expenditures covered by the proposed Annual Work Program and Budget (including each Member’s share thereof) by budget category, containing sufficient detail (to the extent available) to afford the ready identification of the nature, scope and duration of the activity in question; (iv) estimates of the schedule pursuant to which each Member’s share of expenses included in the Annual Work Program and Budget are anticipated to be incurred by the Company; and (v) any other information requested in writing by a Member that can reasonably be provided by the Company. (b) Itemized expenditures in an Annual Work Program and Budget may extend over more than one Calendar Year because such itemized expenditures represent activities or operations that require commitments in excess of one Calendar Year. Once itemized expenditures are approved by the Management Board, the President and General Manager shall not be required to resubmit them for approval of the Management Board on an annual or other periodic basis, but instead all such items shall be automatically included in future Annual Work Program and Budgets as items which have already been approved.
Appears in 1 contract
Sources: Limited Liability Company Agreement
Annual Work Program and Budget. For each Calendar Year, so long as the Joint Development Agreement is in effect, the Company shall prepare the Annual Work Program and Budget in accordance with the terms of the Joint Development Agreement and the Company shall be bound by the Annual Work Program and Budget approved pursuant to the terms of the Joint Development Agreement. For each Calendar Year (or partial Calendar Year) following the date upon which the Joint Development Agreement is terminated, an Annual Work Program and Budget shall be adopted as follows:
(a) On or before August 15 in the Calendar Year immediately preceding the relevant Calendar Year (or, following the termination of the Joint Development Agreement, as promptly as practicable), the President and General Manager shall prepare, or cause to be prepared, and submit to the Management Board a proposed Annual Work Program and Budget for such applicable Calendar Year. Each such proposed Annual Work Program and Budget shall contain at least the following:
(i) inclusion of expenditures required by the Company under the terms of any Company Contract during such Calendar Year, except with the approval of such Management Board to the contrary;
(ii) an itemized estimate of the Appalachian Overhead and Company Operating Expenses for such Calendar Year;
(iii) itemized estimates of the expenditures covered by the proposed Annual Work Program and Budget (including each Member’s share thereof) by budget category, containing sufficient detail (to the extent available) to afford the ready identification of the nature, scope and duration of the activity in question;
(iv) estimates of the schedule pursuant to which each Member’s share of expenses included in the Annual Work Program and Budget are anticipated to be incurred by the Company; and
(v) any other information requested in writing by a Member that can reasonably be provided by the Company.
(b) Itemized expenditures in an Annual Work Program and Budget may extend over more than one Calendar Year because such itemized expenditures represent activities or operations that require commitments in excess of one Calendar Year. Once itemized expenditures are approved by the Management Board, the President and General Manager shall not be required to resubmit them for approval of the Management Board on an annual or other periodic basis, but instead all such items shall be automatically included in future Annual Work Program and Budgets as items which have already been approved.
(c) The President and General Manager shall regularly consult with the Management Board during the preparation of each proposed Annual Work Program and Budget. Following receipt of a proposed Annual Work Program and Budget, each Member shall furnish to the President and General Manager and Management Board any comments, suggestions or proposed amendments it may have respecting such proposed Annual Work Program and Budget as soon as may be reasonably practicable, and the President and General Manager shall consider and discuss such comments, suggestions and proposed amendments with such Management Board. Unless otherwise agreed by the Management Board, within sixty (60) days after distribution of each proposed Annual Work Program and Budget for a Calendar Year, the Management Board and the President and General Manager shall meet to consider, modify (if necessary) and approve or reject such proposed Annual Work Program and Budget. Subject to Section 3.2(d), approval of an Annual Work Program and Budget shall require the approval of the Management Board in accordance with Section 2.3.
(d) In the event an Annual Work Program and Budget is not approved on or prior to the first day of the Calendar Year to which such Annual Work Program and Budget pertains (for purposes of this Section 3.2(d), the “relevant Calendar Year”), the Management Board shall be deemed to have approved an Annual Work Program and Budget for the relevant Calendar Year that includes the following: (i) Company Operating Expenses equal to the product of the amount of Company Operating Expenses approved in the preceding Calendar Year’s Annual Work Program and Budget and the Operating Expense Multiplier for the relevant Calendar Year; (ii) Appalachian Overhead equal to the amount of Appalachian Overhead approved in the preceding Calendar Year’s Annual Work Program and Budget, with such adjustments as are necessary to reflect previously approved changes in staffing or facilities costs of the Company or Technical Services to be performed that will be implemented during the Calendar Year in question; (iii) those multi-year expenditures previously approved by the Management Board pursuant to previous Annual Work Program and Budget, that are attributable to the relevant Calendar Year; (iv) existing payment commitments to any Person under Company Contracts (including the Services Agreements) in such Calendar Year and other costs and expenses necessary to allow the Company to comply with their obligations under all Company Contracts (including the Services Agreements); (v) taxes payable by the Company; and (vi) to the extent not accounted for under clause (ii) above, payroll and benefits of all employees and all charges to the Company under the Secondment Agreements in respect of any Person seconded to the Company Group.
(e) Any Member may propose to amend an Annual Work Program and Budget by notice to the Management Board and the President and General Manager. Approval of any such amendment shall require the approval of the Management Board in accordance with Section 2.2(ee). Notwithstanding any provision of Section 2.5 to the contrary, each Member shall have sixty (60) days to consider any proposed amendment that would increase the estimated costs of any Annual Work Program and Budget by more than ten percent (10%). To the extent that such amendment is approved by the Management Board, the relevant Annual Work Program and Budget shall be deemed amended accordingly, provided that any such amendment shall not invalidate any commitment or expenditure already made by the Company in accordance with any previous authorization given pursuant hereto.
(f) Approval by the Management Board of an Annual Work Program and Budget shall constitute the Management Board’s deemed approval for the Company to expend up to ten percent (10%) in excess of the authorized amount for any category of the Annual Work Program and Budget, not to exceed in the aggregate ten percent (10%) of the aggregate amount applicable to the Annual Work Program and Budget, and less, in each case, any amounts included as line items for contingencies and overruns with respect to such operations in such category of the Annual Work Program and Budget. The President and General Manager shall promptly notify the Management Board of any expenditure made by the Company in the exercise of the rights pursuant to this Section 3.2(f). The ten percent (10%) deemed approval level set forth in this Section 3.2(f) shall be calculated with respect to the original amount of the Annual Work Program and Budget or, once amended, the amended amount of the Annual Work Program and Budget, provided that no expenditures incurred pursuant to Section 3.2(g) shall be deemed to be included in an approved Annual Work Program and Budget for purposes of calculating the ten percent (10%) deemed approval levels pursuant to this Section 3.2(f), nor shall any such expenditures be considered to be amounts expended in excess of the authorized amount of any Annual Work Program and Budget for purposes of calculating the ten percent (10%) deemed approval levels.
(g) Notwithstanding anything to the contrary in this Agreement, the President and General Manager is expressly authorized to cause the Company to make Emergency Expenditures and incur liabilities without prior authorization or approval when necessary or advisable, in the President and General Manager’s good faith judgment, to deal with emergencies, including explosions, fires, spills, or any other similar event, which may endanger property, lives, or the environment and it is impractical to get the Management Board approval for such expenditures and incurrence of such liabilities. The President and General Manager shall as soon as practicable report to the Management Board the nature of any such emergency which arises, the measures it intends to take in respect of such emergency and the estimated related expenditures.
(h) To the extent reasonably within the control of the President and General Manager, operations described in an Annual Work Program and Budget shall be conducted at the time prescribed in such Annual Work Program and Budget.
(i) For the avoidance of doubt, any reference in this Agreement to an approved Annual Work Program and Budget shall include an Annual Work Program and Budget is deemed to have been approved by the Management Board, and shall incorporate all approved amendments thereto and all modifications to the Annual Work Program and Budget described herein that require no action on the part of the Management Board or the Members.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Exco Resources Inc)