Common use of Class B Incentive Units Clause in Contracts

Class B Incentive Units. The Company is authorized to grant awards (each, a “Company Incentive Award”) that consist of an aggregate number of Class B Incentive Units representing 5% of the total outstanding Capital Proceeds Equity Interests of the Company as of the Effective Date (the “Pre-Approved Class B Issuance”) or such greater amount of Class B Incentive Units, if any, as may be determined by the Executive Committee, subject to approval of the NSAM Designees (to the extent required) in accordance with Section 5.3(h), directly or indirectly, to employees and other service providers of the Company or any of its Subsidiaries (other than the Principals unless approved in accordance with Section 5.3(h), to the extent such approval is required), which Class B Incentive Units will have the rights and obligations set forth herein and will be subject to the terms of the Incentive Unit Plan and the Award Agreements contemplated thereby; provided, that such Award Agreements comply with the provisions of this Agreement. During any Fiscal Year, the Executive Committee shall be permitted to distribute up to 20% of the Pre-Approved Class B Issuance to employees and other service providers of the Company or its Subsidiaries, subject to minimum vesting requirements of at least two years (the “Annual Permitted Class B Issuance”), or such greater amount of Class B Incentive Units, if any, as may be approved by the Executive Committee, subject to approval of the NSAM Designees (to the extent required) in accordance with Section 5.3(h); provided, that if all or any portion of the Annual Permitted Class B Issuance is not distributed in any Fiscal Year, such undistributed amount shall be available for distributions in subsequent Fiscal Years, and the Annual Permitted Class B Issuance shall be increased to reflect such undistributed amount; provided, further, that in no event may any employee or other service provider of the Company or its Subsidiaries receive Class B Incentive Units representing more than 2.5% of the total outstanding Capital Proceeds Equity Interests of the Company without the consent of the Executive Committee subject to the approval of the NSAM Designees (to the extent required) in accordance with Section 5.3(d). Any Company Incentive Award may be granted in consideration for services provided or to be provided by the recipient of such award and such consideration need not reflect the Fair Market Value of the additional Units that are the subject of such award. The Class B Incentive Units will carry no consent, approval, veto or other voting rights under this Agreement, and for the avoidance of doubt, shall not be deemed to be Common Units under any circumstance. Upon the issuance of additional Units in respect of a Company Incentive Award, the Executive Committee shall modify Exhibit B and the books and records of the Company to accurately reflect the capital contributions, Capital Accounts and number of Units of all Members, determined as of the time of such issuance of additional Units, and to reflect the admission of the additional Members as Members.

Class B Incentive Units. (i) The Managing Member may, without the consent of the Major Decision Committee, issue in the aggregate up to five percent (5%) of the Effective Date Common Units, so-called “Class B Incentive Units”, to employees and Officers of the Company is authorized as part of their compensation, whether or not pursuant to grant awards an Approved Incentive Unit Plan, provided that (eachA) the Class B Incentive Units shall be Profits Interests in all events and accordingly shall be pari passu with the Common Units with respect to any distributions made under Section 4.1(b) (but not Section 4.1(a)), a “Company Incentive Award”(B) that consist of an the aggregate number of Class B Incentive Units representing 5% of the total outstanding Capital Proceeds Equity Interests of the Company as issued pursuant to this Section 2.3(c) shall not exceed one percent (1%) of the Effective Date Common Units per year after giving effect to all issuances, and (the “Pre-Approved Class B Issuance”C) or such greater amount any proposed issuance to a member of Class B Incentive Units, if any, as may be determined by the Executive Committee, subject to approval of the NSAM Designees (to the extent required) in accordance with Section 5.3(h), directly or indirectly, to employees and other service providers of the Company or any of its Subsidiaries (other than the Principals unless approved in accordance with Section 5.3(h), to the extent such approval is required), which Class B Incentive Units will have the rights and obligations set forth herein and will Island Senior Management shall be subject to the terms of the Incentive Unit Plan and the Award Agreements contemplated thereby; provided, that such Award Agreements comply with the provisions of this Agreement. During any Fiscal Year, the Executive Committee shall be permitted to distribute up to 20% of the Pre-Approved Class B Issuance to employees and other service providers of the Company or its Subsidiaries, subject to minimum vesting requirements of at least two years (the “Annual Permitted Class B Issuance”), or such greater amount of Class B Incentive Units, if any, as may be approved by the Executive Committee, subject to approval of the NSAM Designees (to the extent required) in accordance with Section 5.3(h); provided, that if all or any portion of the Annual Permitted Class B Issuance is not distributed in any Fiscal Year, such undistributed amount shall be available for distributions in subsequent Fiscal Years, and the Annual Permitted Class B Issuance shall be increased to reflect such undistributed amount; provided, further, that in no event may any employee or other service provider of the Company or its Subsidiaries receive Class B Incentive Units representing more than 2.5% of the total outstanding Capital Proceeds Equity Interests of the Company without the consent of the Executive Committee subject to the approval of the NSAM Designees (to the extent required) in accordance with Section 5.3(d). Any Company Incentive Award may be granted in consideration for services provided or to be provided by the recipient of such award and such consideration need not reflect the Fair Market Value of the additional Units that are the subject of such award5.3. The Class B Incentive Units will carry no consent, approval, veto or other voting rights under this Agreement, and for the avoidance of doubt, shall are not be deemed considered to be Common Units under Units. (ii) By executing this Agreement, each Member authorizes and directs the Company to elect to have the “Safe Harbor” described in the proposed Revenue Procedure set forth in Internal Revenue Service Notice 2005-43 (the “Notice”) apply to any circumstanceinterest in the Company transferred to a service provider by the Company on or after the effective date of such Revenue Procedure in connection with services provided to or for the benefit of the Company. Upon For purposes of making such Safe Harbor election, the Managing Member is hereby designated as the “partner who has responsibility for U.S. federal income tax reporting” by the Company and, accordingly, execution of such Safe Harbor election by Managing Member constitutes execution of a “Safe Harbor Election” in accordance with Section 3.03(1) of the Notice. The Company and each Member hereby agree (A) to use commercially reasonable efforts to comply with all requirements of the Safe Harbor described in the Notice and (B) that each Member shall prepare and file all U.S. federal income tax returns reporting the income tax effects of each Unit issued by the Company that is subject to the Safe Harbor in a manner consistent with the requirements of the Notice. The officers of the Company shall file, or cause the Company to file, all returns, reports and other documentation as may be required to perfect and maintain the Safe Harbor Election with respect to grants of Profits Interests covered by such Safe Harbor Election. It shall be a condition subsequent to the issuance of additional Units in respect any unvested Profits Interests of any Member, that such Member makes a Company Incentive Award, the Executive Committee shall modify Exhibit B timely and the books and records proper election under Section 83(b) of the Company Code with respect to accurately reflect the capital contributions, Capital Accounts and number of Units of all Members, determined as of the time of such unvested Profits Interests. Any issuance of additional Unitsany unvested Profits Interests (whether issued on or after the date hereof) for which a Member fails to make a timely and proper 83(b) election shall be void ab initio unless otherwise determined by the Managing Member. EACH MEMBER ACKNOWLEDGES THAT IT IS THE MEMBER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S OR THE MANAGING MEMBER’S (OR ANY OF THEIR RESPECTIVE AFFILIATES’ OR ADVISOR’S OR REPRESENTATIVES’) TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF THE CODE, and to reflect the admission of the additional Members as MembersEVEN IF THE MEMBER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON SUCH MEMBER’S BEHALF.