Common use of Internal Rate of Return Clause in Contracts

Internal Rate of Return. “Internal Rate of Return” shall mean the internal rate of return realized by the Principal Stockholders on the Invested Capital as a result of the Investment Proceeds realized or deemed realized by the Principal Stockholders, calculated without reduction for any taxes imposed on such Investment Proceeds and after giving effect to any vested Awards. The Internal Rate of Return shall be determined in respect of any Liquidity Event as if the Principal Stockholders liquidated their entire remaining Investment in such Liquidity Event for a price equal to the fair market value of the remaining Investment on the date of the Liquidity Event, as reasonably determined by the Administrator. In determining the Internal Rate of Return as of any date, all Investment Proceeds theretofore received, directly or indirectly, by the Principal Stockholders in respect of their Investment shall be taken into account, and no other amounts theretofore received by the Principal Stockholders shall be taken into account.