Management Incentive Units. (a) From time to time from and including the date hereof, the Board shall, subject to Section 6.12(b), have the power and discretion to approve the issuance of any class of Units to any manager, employee, independent contractor or consultant of the Company or its Subsidiaries including employees of VEI providing services under the Administrative Services Agreement (each such person, a “Management Member”). The Board shall have power and discretion to approve which managers, employees, independent contractors, or consultants shall be offered and issued such Units (“Management Incentive Units”), the number of Management Incentive Units to be offered and issued to each Management Member and the purchase price and other terms and conditions (including any deemed Capital Contributions in respect thereof) with respect thereto; provided that (i) holders of Management Incentive Units shall not have any voting rights with respect to their Management Incentive Units and (ii) the Board shall not issue more than eight hundred (800) Management Incentive Units that are Class A-1 Preferred Units, six hundred (600) Management Incentive Units that are Class A Common Units or four hundred fifty (450) Management Incentive Units that are Class B Common Units. (b) The provisions of this Section 3.6 are designed to provide incentives to managers, employees, independent contractors or consultants of the Company or its Subsidiaries. This Section 3.6, together with the other terms of this Agreement and the Management Incentive Unit Agreements relating to Management Incentive Units, are intended to be a compensatory benefit plan within the meaning of Rule 701 of the Securities Act, and, unless and until the Company’s Equity Securities are publicly traded, the issuance of Management Incentive Units are, to the extent permitted by applicable federal securities laws, intended to qualify for the exemption from registration under Rule 701 of the Securities Act. (c) On the date of each grant of Management Incentive Units to a Management Member, the Board will establish (and document in the applicable Management Incentive Unit Agreement) an initial “Participation Threshold” amount with respect to each such Management Incentive Unit granted on such date. The Participation Threshold determined by the Board shall be based on the Company’s net fair market value at the date of issuance, and shall be calculated in such a manner that each such Management Incentive Unit would not be entitled to any distributions under Section 4.1 any earlier than such later date as the Company’s net fair market value has appreciated above that which existed on the date of issuance. (d) Each Management Incentive Unit’s Participation Threshold shall be adjusted after the grant of such Management Incentive Unit as follows: (i) In the event of any Distribution pursuant to Section 4.1(a)(iv), the Participation Threshold of each Management Incentive Unit outstanding at the time of such Distribution shall be reduced (but not below zero) by the amount of such Distribution. (ii) In the event of any change in the Company’s capital or economic structure not addressed above (including any redemption of outstanding Units), the Board may equitably adjust the Participation Thresholds of the outstanding Management Incentive Units to the extent necessary (in the Board’s good faith judgment) to prevent such capital structure change from changing the economic rights represented by the Management Incentive Units in a manner that is disproportionately favorable or unfavorable in relation to the economic rights of other classes or series of outstanding Units. (e) In connection with any approved issuance of Management Incentive Units to a Management Member hereunder, such Management Member shall execute a counterpart to this Agreement (or a joinder to this Agreement in a form acceptable to the Company), accepting and agreeing to be bound by all terms and conditions hereof, and shall enter into such other documents and instruments to effect such purchase (including, without limitation, a Management Incentive Unit Agreement) as are required by the Board. (f) If the Board so determines, the Management Incentive Units issued to any Management Member shall become vested in accordance with the vesting schedule determined by the Board in connection with the issuance of such Management Incentive Units (and reflected in the relevant Management Incentive Unit Agreement). Management Incentive Units that are subject to vesting and that are vested per such vesting schedule or by the Board are referred to herein as “Vested Units”. Management Incentive Units that are subject to vesting and that are not yet vested per such vesting schedule, or as otherwise provided by the Board, are referred to herein as “Unvested Units”. Management Incentive Units that are not subject to vesting or that are fully vested on the date of issuance shall be deemed “Vested Units” for all purposes hereunder. (g) The Management Incentive Units to be issued under this Agreement may be intended to be “profits interests,” within the meaning of IRS Revenue Procedures 93-27 and 2001-43. (h) Each Management Member shall make and file with the Internal Revenue Service a “Section 83(b) Election” with respect to the Management Incentive Units in such form as required by applicable Treasury Regulations. Any such Section 83(b) Election shall be filed within 30 days of the grant date of a Management Incentive Unit to a Management Member. Each Management Member acknowledges and understands that it is such Management Member’s sole obligation and responsibility to timely file such Section 83(b) Election, and neither the Company nor its legal or financial advisors shall have (i) any obligation or responsibility with respect to such filing or (ii) any liability resulting or arising from the failure to timely file such Section 83(b)
Appears in 2 contracts
Sources: Limited Liability Company Agreement (Vertex Energy Inc.), Limited Liability Company Agreement (Vertex Energy Inc.)
Management Incentive Units. (a) From time to time from and including the date hereof, the Board shall, subject to Section 6.12(b), shall have the power and discretion to approve the issuance of any class of Class A Units and Class B Units in the aggregate to any manager, employee, independent contractor or consultant of the Company or its Subsidiaries including employees of VEI providing services under the Administrative Services Agreement (each such person, a “Management Member”); provided that no such Class A Units or Class B Units are authorized as of the date hereof. The Board shall have power and discretion to approve which managers, employees, independent contractors, or consultants shall be offered and issued such Units (“Management Incentive Units”), the number of Management Incentive Units to be offered and issued to each Management Member and the purchase price and other terms and conditions (including any deemed Capital Contributions in respect thereof) with respect thereto; provided that (i) holders of Management Incentive Units shall not have any voting rights with respect to their Management Incentive Units and (ii) the Board shall not issue more than eight hundred (800) Management Incentive Units that are Class A-1 Preferred Units, six hundred (600) Management Incentive Units that are Class A Common Units or four hundred fifty (450) Management Incentive Units that are Class B Common Units.
(b) The provisions of this Section 3.6 are designed to provide incentives to managers, employees, independent contractors or consultants of the Company or its Subsidiaries. This Section 3.6, together with the other terms of this Agreement and the Management Incentive Unit Agreements relating to Management Incentive Units, are intended to be a compensatory benefit plan within the meaning of Rule 701 of the Securities Act, and, unless and until the Company’s Equity Securities are publicly traded, the issuance of Management Incentive Units are, to the extent permitted by applicable federal securities laws, intended to qualify for the exemption from registration under Rule 701 of the Securities Act.
(c) On the date of each grant of Management Incentive Units to a Management Member, the Board will establish (and document in the applicable Management Incentive Unit Agreement) an initial “Participation Threshold” amount with respect to each such Management Incentive Unit granted on such date. The Participation Threshold determined by the Board shall be based on the Company’s net fair market value at the date of issuance, and shall be calculated in such a manner that each such Management Incentive Unit would not be entitled to any distributions under Section 4.1 any earlier than such later date as the Company’s net fair market value has appreciated above that which existed on the date of issuance.
(d) Each Management Incentive Unit’s Participation Threshold shall be adjusted after the grant of such Management Incentive Unit as follows:
(i) In the event of any Distribution pursuant to Section 4.1(a)(iv), the Participation Threshold of each Management Incentive Unit outstanding at the time of such Distribution shall be reduced (but not below zero) by the amount of such Distribution.
(ii) In the event of any change in the Company’s capital or economic structure not addressed above (including any redemption of outstanding Units), the Board may equitably adjust the Participation Thresholds of the outstanding Management Incentive Units to the extent necessary (in the Board’s good faith judgment) to prevent such capital structure change from changing the economic rights represented by the Management Incentive Units in a manner that is disproportionately favorable or unfavorable in relation to the economic rights of other classes or series of outstanding Units.
(e) In connection with any approved issuance of Management Incentive Units to a Management Member hereunder, such Management Member shall execute a counterpart to this Agreement (or a joinder to this Agreement in a form acceptable to the Company), accepting and agreeing to be bound by all terms and conditions hereof, and shall enter into such other documents and instruments to effect such purchase (including, without limitation, a Management Incentive Unit Agreement) as are required by the Board.
(f) If the Board so determines, the Management Incentive Units issued to any Management Member shall become vested in accordance with the vesting schedule determined by the Board in connection with the issuance of such Management Incentive Units (and reflected in the relevant Management Incentive Unit Agreement). Management Incentive Units that are subject to vesting and that are vested per such vesting schedule or by the Board are referred to herein as “Vested Units”. Management Incentive Units that are subject to vesting and that are not yet vested per such vesting schedule, or as otherwise provided by the Board, are referred to herein as “Unvested Units”. Management Incentive Units that are not subject to vesting or that are fully vested on the date of issuance shall be deemed “Vested Units” for all purposes hereunder.
(g) The Management Incentive Units to be issued under this Agreement may be intended to be “profits interests,” within the meaning of IRS Revenue Procedures 93-27 and 2001-43.
(h) Each Management Member shall make and file with the Internal Revenue Service a “Section 83(b) Election” with respect to the Management Incentive Units in such form as required by applicable Treasury Regulations. Any such Section 83(b) Election shall be filed within 30 days of the grant date of a Management Incentive Unit to a Management Member. Each Management Member acknowledges and understands that it is such Management Member’s sole obligation and responsibility to timely file such Section 83(b) Election, and neither the Company nor its legal or financial advisors shall have (i) any obligation or responsibility with respect to such filing or (ii) any liability resulting or arising from the failure to timely file such Section 83(b)
Appears in 1 contract
Sources: Limited Liability Company Agreement (Vertex Energy Inc.)
Management Incentive Units. (a) From time to time from and including after the date hereof, the Board shall, subject to Section 6.12(b), shall have the power and discretion to approve the issuance of any class of Units to any manager, employee, independent contractor officer, Manager, director, consultant or consultant advisor of the Company or any of its Subsidiaries including employees (each an “Eligible Service Provider”) of VEI providing services under authorized but unissued Units representing a fractional part of the Administrative Services interests in Profits, Losses and Distributions of the Members and having the rights and obligations specified with respect to Class B Units or such other class of Units as the Board may establish from time to time in this Agreement (each such person, a “Management MemberIncentive Units”). The Board shall have the power and discretion to establish a Management Incentive Plan setting forth such terms and conditions as the Board shall deem appropriate to facilitate the issuance of Management Incentive Units. The Board shall have the power and discretion to approve which managers, employees, independent contractors, or consultants Eligible Service Providers shall be offered and issued such Units (“Management Incentive Units”), the number of Management Incentive Units to be offered and issued to each such Eligible Service Provider, the vesting, forfeiture and other restrictions, if any, governing such Management Member and Incentive Units, the purchase price therefor, if any, and the any such other terms and conditions (including any deemed Capital Contributions in respect thereof) with respect thereto; provided that (i) holders of Management Incentive Units as it shall not have any voting rights with respect to their Management Incentive Units and (ii) the Board shall not issue more than eight hundred (800) Management Incentive Units that are Class A-1 Preferred Units, six hundred (600) Management Incentive Units that are Class A Common Units or four hundred fifty (450) Management Incentive Units that are Class B Common Units.
(b) The provisions of this Section 3.6 are designed to provide incentives to managers, employees, independent contractors or consultants of the Company or its Subsidiariesdeem appropriate. This Section 3.6, together with the other terms of this Agreement and the Management Incentive Unit Agreements relating to Management Incentive Units, are intended to be a compensatory benefit plan within the meaning of Rule 701 of the Securities Act, and, unless and until the Company’s Equity Securities are publicly traded, the issuance of Management Incentive Units are, to the extent permitted by applicable federal securities laws, intended to qualify for the exemption from registration under Rule 701 of the Securities Act.
(c) On the date of each grant of Management Incentive Units to a Management Member, the Board will establish (and document in the applicable Management Incentive Unit Agreement) an initial “Participation Threshold” amount with respect to each such Management Incentive Unit granted on such date. The Participation Threshold determined by the Board shall be based on the Company’s net fair market value at the date of issuance, and shall be calculated in such a manner that each such Management Incentive Unit would not be entitled to any distributions under Section 4.1 any earlier than such later date as the Company’s net fair market value has appreciated above that which existed on the date of issuance.
(d) Each Management Incentive Unit’s Participation Threshold shall be adjusted after the grant of such Management Incentive Unit as follows:
(i) In the event of any Distribution pursuant to Section 4.1(a)(iv), the Participation Threshold of each Management Incentive Unit outstanding at the time of such Distribution shall be reduced (but not below zero) by the amount of such Distribution.
(ii) In the event of any change in the Company’s capital or economic structure not addressed above (including any redemption of outstanding Units), the Board may equitably adjust the Participation Thresholds of the outstanding Management Incentive Units to the extent necessary (in the Board’s good faith judgment) to prevent such capital structure change from changing the economic rights represented by the Management Incentive Units in a manner that is disproportionately favorable or unfavorable in relation to the economic rights of other classes or series of outstanding Units.
(e) In connection with any approved issuance to any Eligible Service Provider of Management Incentive Units to a Management Member hereunder, such Management Member Eligible Service Provider shall execute a counterpart to this Agreement (Agreement, or otherwise be deemed to have become a joinder party to this Agreement in by executing a form acceptable to the Company)Management Incentive Unit Agreement, accepting and agreeing to be bound by all terms and conditions hereof, and shall enter into such other documents and instruments to effect such purchase (including, without limitation, a Management Incentive Unit Agreement) as are required by the Board.
(f) If . This Section 3.8, together with any Management Incentive Plan and the Board so determines, Management Incentive Unit Agreements pursuant to which the Management Incentive Units issued to any Management Member shall become vested in accordance with the vesting schedule determined by the Board in connection with the issuance of such Management Incentive Units (and reflected in the relevant Management Incentive Unit Agreement). Management Incentive Units that are subject to vesting and that are vested per such vesting schedule or by the Board are referred to herein as “Vested Units”. Management Incentive Units that are subject to vesting and that are not yet vested per such vesting schedule, or as otherwise provided by the Boardissued, are referred to herein as “Unvested Units”. Management Incentive Units that are not subject to vesting or that are fully vested on the date of issuance shall be deemed “Vested Units” for all purposes hereunder.
(g) The Management Incentive Units to be issued under this Agreement may be intended to be “profits interests,” qualify as a compensatory benefit plan within the meaning of IRS Revenue Procedures 93-27 Rule 701 of the Securities Act and 2001-43.
(h) Each Management Member shall make and file with the Internal Revenue Service a “Section 83(b) Election” with respect to the issuance of Management Incentive Units in such form as required pursuant hereto is intended to qualify for the exemption from registration under the Securities Act provided by applicable Treasury Regulations. Any such Section 83(b) Election Rule 701; provided that the foregoing shall be filed within 30 days of not restrict or limit the grant date of a Company's ability to issue any Management Incentive Unit Units pursuant to a Management Member. Each Management Member acknowledges and understands that it is such Management Member’s sole obligation and responsibility any other exemption from registration under the Securities Act available to timely file such Section 83(b) Election, and neither the Company nor its legal or financial advisors shall have (i) any obligation or responsibility with respect to such filing or (ii) any liability resulting or arising from the failure to timely file such Section 83(b)Company.
Appears in 1 contract
Sources: Limited Liability Company Agreement (ChromaDex Corp.)
Management Incentive Units. (a) From Subject to the terms of the Stockholders Agreement, the Board may, in its sole discretion and without the consent of any Limited Partner, at any time, and without the need for any amendment hereunder, from time to time from and including after the date hereof, the Board shall, subject to Section 6.12(b), have the power and discretion to approve the issuance of any class of Units to any manager, employee, independent contractor or consultant of the Company or its Subsidiaries including employees of VEI providing services under the Administrative Services Agreement (each such person, a “Management Member”). The Board shall have power and discretion to approve which managers, employees, independent contractors, or consultants shall be offered and issued such Units (“Management Incentive Units”), the number of Management Incentive Units to be offered and issued to each Management Member and the purchase price and other terms and conditions (including any deemed Capital Contributions in respect thereof) with respect thereto; provided that (i) holders of Management Incentive Units shall not have any voting rights with respect to their Management Incentive Units and (ii) the Board shall not issue more than eight hundred (800) Management Incentive Units that are Class A-1 Preferred Units, six hundred (600) Management Incentive Units that are Class A Common Units or four hundred fifty (450) Management Incentive Units that are Class B Common Units.
(b) The provisions of this Section 3.6 are designed to provide incentives to managers, employees, independent contractors or consultants of the Company or its Subsidiaries. This Section 3.6, together with the other terms of this Agreement and the Management Incentive Unit Agreements relating to Management Incentive Units, are intended to be a compensatory benefit plan within the meaning of Rule 701 of the Securities Act, and, unless and until the Company’s Equity Securities are publicly traded, the issuance of Management Incentive Units areto any Person that is an employee, officer, consultant, contractor or advisor of the Partnership or its Subsidiaries, upon the terms and subject to the conditions set forth in this Agreement. Management Incentive Units issued under this Agreement (a) may be intended, as determined by the Board, to be “profits interests” as described in Revenue Procedure 93-27, Revenue Procedure 2001-43, and Notice 2005-43 (promulgated by the extent permitted United States Internal Revenue Service) with an initial Fair Market Value equal to zero and (b) shall be subject to the provisions of a written agreement satisfactory in form and substance to the Board evidencing the issuance of such Units. Further, each Management Limited Partner that is a United States Person or entity shall make and file with the Internal Revenue Service a “Section 83(b) Election” in such form as required by applicable federal securities laws, intended to qualify for the exemption from registration under Rule 701 Treasury regulations (Treas. Reg. §1.83-2). Any Section 83(b) Election shall be filed within thirty days of the Securities Actdate of issuance of a Management Incentive Unit to a Management Limited Partner.
(cb) On the date of each grant issuance of Management Incentive Units to a Management MemberLimited Partner who is, or, as a result of such grant, becomes a Partner pursuant to such grant, the Board will shall establish (and document in the applicable Management Incentive Unit Agreement) an initial “Participation Threshold” amount with respect to each such Management Incentive Unit granted on such date. The Participation Threshold Unless otherwise determined by the Board or provided in the applicable Management Incentive Unit Agreement, the Participation Threshold with respect to a Management Incentive Unit shall be based on equal to the Companydifference between (i) the amount that would be distributed with respect to all Units pursuant to Sections 4.1(g) and 4.1(h) in a hypothetical transaction in which the Partnership’s net fair market value at the date of issuanceassets had been liquidated in accordance with this Agreement (as in effect immediately prior to such liquidation) and applicable law, and shall be calculated the proceeds of such liquidation were applied and distributed pursuant to the rights and preferences set forth in this Agreement (as in effect immediately prior to such a manner that each liquidation) minus (ii) the total Capital Contributions (if any) made by the Management Limited Partner receiving such Management Incentive Unit would with respect to all Management Incentive Units received by such Management Limited Partner as part of the same issuance. At the Board’s discretion, the Participation Threshold with respect to a Management Incentive Unit may increase over time in accordance with a methodology established by the Board at the time of issuance thereof. The Board may designate a series number for each subset of Management Incentive Units consisting of Management Incentive Units having the same Participation Threshold, which Participation Threshold differs from the Participation Thresholds of all Management Incentive Units not be entitled to any distributions under Section 4.1 any earlier than included in such later date as the Company’s net fair market value has appreciated above that which existed on the date of issuancesubset.
(dc) Each Management Incentive Unit’s Participation Threshold shall be adjusted after the grant of such Management Incentive Unit as follows:
provided in the applicable Management Incentive Unit Agreement or, in the absence of any such provision, in the following manner: (i) In in the event of any Distribution pursuant to Section 4.1(a)(iv)Sections 4.1(g) or 4.1(h) or any redemption or repurchase of Units by the Partnership, the Participation Threshold of each Management Incentive Unit outstanding at the time of such Distribution Distribution, redemption or repurchase shall be reduced (but not below zero) by the amount of such Distribution.
Distribution pursuant to Sections 4.1(g) or 4.1(h) or the portion of the amount paid by the Partnership to redeem or repurchase such Units to the extent attributable to Sections 4.1(g) or 4.1(h); and (ii) In in the event of any change in the CompanyPartnership’s capital or economic structure not addressed above (including any redemption of outstanding Units)above, the Board may equitably adjust the Participation Thresholds of the outstanding Management Incentive Units to the extent necessary (in the Board’s good faith judgment) to prevent such capital structure change from changing the economic rights represented by the Management Incentive Units in a manner that is disproportionately favorable or unfavorable in relation to the economic rights of other classes or series of outstanding Units.
(ed) In connection with any approved issuance of Management Incentive Units to a Management Member hereunder, such Management Member shall execute a counterpart to this Agreement (or a joinder to this Agreement in a form acceptable to the Company), accepting and agreeing to be bound by all terms and conditions hereof, and shall enter into such other documents and instruments to effect such purchase (including, without limitation, a Management Incentive Unit Agreement) as are required by the Board.
(f) If the Board so determines, the The Management Incentive Units issued to any Management Member Limited Partner shall become vested in accordance with the vesting schedule set forth in the relevant Management Incentive Unit Agreement or, in the absence of a Management Incentive Unit Agreement, as otherwise determined by the Board in connection with the issuance of such Management Incentive Units. Such vesting schedule may, in the sole discretion of the Board, include acceleration of vesting of any Management Incentive Units in the event of a Sale of the Partnership.
(e) Notwithstanding any provision to the contrary contained in this Agreement or in any Management Incentive Unit Agreement and unless otherwise determined by the Board in connection therewith, any Unvested Management Incentive Units that do not become vested immediately prior to, or in connection with, any Sale of the Partnership, shall be forfeited and cancelled with concurrent effect upon the consummation of any such transaction, and no Management Limited Partner nor any other Person shall have any further rights or obligations with respect to such forfeited options or shares. The provisions of this Agreement that relate to Management Incentive Units (and reflected in together, if applicable, with the relevant terms of any Management Incentive Unit Agreement) are intended to qualify as provisions of a compensatory benefit plan within the meaning of Rule 701 of the Securities Act of 1933, as amended.
(f) The Partnership shall be entitled, if necessary or desirable, to withhold (or secure payment from a Management Limited Partner in lieu of withholding) the amount of any withholding or other tax due from the Partnership with respect to any amount payable or interests issuable hereunder, and the Partnership may defer such payment or issuance unless indemnified to its satisfaction.
(g) In connection with the issuance of any Units to Management Limited Partners hereunder, each such Management Limited Partner acknowledges and agrees, that as a condition to any such issuance:
(i) The Partnership will have no duty or obligation to disclose to any Management Limited Partner any material information regarding the General Partner, the Partnership or their respective Subsidiaries.
(ii) No Management Limited Partner will have any right to be advised of any material information regarding the General Partner, the Partnership or their respective Subsidiaries at any time prior to, upon or in connection with the repurchase of any Management Incentive Units upon the termination of such Management Limited Partner’s employment with the Partnership or its Subsidiaries or as otherwise provided hereunder or in any written agreement evidencing the issuance of any Units.
(iii) Neither the issuance of any Units nor any provision contained in this Agreement or in any written agreement evidencing the issuance of any Units shall entitle such Management Limited Partner to remain in the employment or service, as applicable, of the Partnership or its Subsidiaries or affect the right of the Partnership to terminate any Management Limited Partner’s employment or service, as applicable, at any time for any reason.
(iv) Such Management Limited Partner will have consulted, or will have had an opportunity to consult with, independent legal counsel regarding his, her or its rights and obligations under this Agreement and any written agreement evidencing any issuance of Units and such Management Limited Partner fully understands the terms and conditions contained herein and therein.
(v) Prior to the purchase of any Units hereunder or pursuant to any written agreement evidencing the purchase of any Units, such Management Limited Partner will deliver to the Partnership an executed consent from such Management Limited Partner’s spouse (if any) in the form of Exhibit A attached hereto. If, at any time subsequent to the date that such Management Limited Partner is issued any Units and before the Repurchase Option ceases to be effective, such Management Limited Partner becomes legally married (whether in the first instance or to a different spouse), such Management Limited Partner shall cause his or her spouse to execute and deliver to the Partnership a consent in the form of Exhibit A attached hereto. Such Management Limited Partner’s failure to deliver to the Partnership an executed consent in the form of Exhibit A at any time when such Management Limited Partner would otherwise be required hereby to deliver such consent shall constitute such Management Limited Partner’s continuing representation and warranty that such Management Limited Partner is not legally married as of such date.
(h) If a Management Limited Partner is no longer employed by the Partnership or any of its Subsidiaries for any reason (including, but not limited to, death or disability) or is no longer dedicating a substantial portion of his or her professional time and attention (as determined by the Board or its designee) to providing services to the Partnership or any of its Subsidiaries for any reason (including, but not limited to, death or disability), all Unvested Management Incentive Units held by such Management Limited Partner or one or more transferees of such Management Limited Partner, as applicable, in each case other than the Partnership or the General Partner, shall automatically expire and be forfeited to the Partnership. Unless otherwise determined by the Board or provided in the applicable Management Incentive Unit Agreement, if a Management Limited Partner is no longer employed by the Partnership or any of its Subsidiaries for any reason (including, but not limited to, death or disability) or is no longer dedicating a substantial portion of his or her professional time and attention (as determined by the Board or its designee) to providing services to the Partnership or any of its Subsidiaries for any reason (including, but not limited to, death or disability), all Vested Management Incentive Units held by such Management Limited Partner or one or more transferees of such Management Limited Partner, other than the Partnership or the General Partner, will be subject to repurchase by the Partnership (solely at its option) pursuant to the terms and conditions set forth in this Section 3.5(h) (the “Repurchase Option”).
(i) Commencing upon the Termination Date of a Management Limited Partner (it being understood that typically the Partnership shall not acquire any Vested Management Incentive Units prior to the 181st day following the date upon which the Management Incentive Units that are subject to vesting such repurchase have become Vested Management Incentive Units), the Partnership may elect to repurchase all or any portion of the Management Incentive Units, (A) in the event of such Management Limited Partner’s termination for Cause, participation in a Competitive Activity or resignation, at a price equal to the lower of the Original Cost or the Fair Market Value of the Management Incentive Units being repurchased and that are vested (B) otherwise, at a price per Unit equal to the Fair Market Value of such vesting schedule Management Incentive Units as of the date of such repurchase (or, if such Fair Market Value is equal to zero, for no consideration by delivering a Repurchase Notice (as defined below) stating the Partnership’s intent to effect such repurchase).
(ii) Subject to Section 3.5(h)(i) above, the Partnership may elect to exercise the Repurchase Option to purchase the Management Incentive Units subject to repurchase by delivering written notice (the “Repurchase Notice”) to the Holder or by Holders of the Board are referred to herein as “Vested Units”. Management Incentive Units no later than ninety (90) days after the later of (i) the Termination Date, (ii) the date the Partnership becomes aware of such Management Limited Partner’s participation in a Competitive Activity, and (iii) the 181st day following the last date upon which any of the Management Incentive Units that are subject to vesting and that are not yet vested per such vesting schedule, or as otherwise provided by the Board, are referred to herein as “Unvested Units”. repurchase have become Vested Management Incentive Units that are not subject to vesting or that are fully vested on Units. The Repurchase Notice will set forth the date number of issuance shall be deemed “Vested Units” for all purposes hereunder.
(g) The Management Incentive Units to be issued under this Agreement may be intended acquired from such Holder(s), the aggregate consideration to be “profits interests,” within paid for such Management Incentive Units and the meaning time and place for the closing of IRS Revenue Procedures 93-27 the transaction. If any Management Incentive Units are held by any transferees of a Management Limited Partner, the Partnership will purchase the Management Incentive Units elected to be purchased from all such Holder(s) of Management Incentive Units, pro rata according to the number of Management Incentive Units held by each such Holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest Unit). If Management Incentive Units of different classes are to be purchased pursuant to the Repurchase Option and 2001-43such Management Incentive Units are held by any transferees of a Management Limited Partner, the number of each class of Management Incentive Units to be purchased will be allocated among all such Holders, pro rata according to the total number of Management Incentive Units to be purchased from such Persons.
(hiii) Each The consummation of the transactions contemplated by this Section 3.5(h) will take place on the date designated in the applicable Repurchase Notice, which date will not be more than ninety (90) days after the delivery of such notice. The Partnership will pay for the Management Member shall Incentive Units to be purchased by it by first offsetting amounts outstanding under any bona fide debts owed by such Management Limited Partner to the General Partner, the Partnership or any of their respective Subsidiaries, now existing or hereinafter arising (regardless of whether such amounts are owed by the Holder of such Management Incentive Units) and will pay the remainder of the purchase price by delivery of a check payable to the Holder of such Management Incentive Units. Notwithstanding anything contained herein to the contrary, all repurchases of Management Incentive Units by the Partnership will be subject to applicable restrictions contained in the Act and other applicable law of the Partnership’s jurisdiction of organization and in the General Partner’s, the Partnership’s or any of their respective Subsidiaries’ debt and equity financing agreements (including, without limitation, the inability to cause Subsidiaries to distribute the requisite funds to the Partnership). If any such restrictions prohibit or make impossible the repurchase of Management Incentive Units hereunder which the Partnership is otherwise entitled to make, the Partnership may make such repurchases as soon as it is permitted and file with able to do so under such restrictions. The Partnership, as the Internal Revenue Service a “Section 83(b) Election” with respect case may be, will receive customary representations and warranties from each seller regarding the sale of the Management Incentive Units, including representations that such seller has good and marketable title to the Management Incentive Units to be Transferred free and clear of all liens, claims and other encumbrances, and each Seller may be required to enter into customary repurchase documentation to provide such representations and warranties. The Partnership may deem any such repurchase upon exercise of the Repurchase Option consummated upon delivery to the seller(s) of the applicable purchase price.
(iv) In order to secure the obligations of all holders of Management Incentive Units in respect of any exercise of a Repurchase Option hereunder, each holder of Management Incentive Units hereby constitutes and appoints the General Partner (and any designee of the General Partner), with full power of substitution, as such holder’s true and lawful agent and attorney-in-fact, with full power and authority in such form as required by applicable Treasury Regulations. Any holder’s name, place and stead, to execute, swear to, acknowledge, deliver, file and record all instruments and other documents and do such Section 83(b) Election shall be filed within 30 days of other acts which the grant date of a Management Incentive Unit General Partner deems appropriate or necessary to a Management Member. Each Management Member acknowledges and understands that it is such Management Member’s sole obligation and responsibility to timely file such Section 83(b) Election, and neither the Company nor its legal effect or financial advisors shall have (i) evidence any obligation or responsibility with respect to such filing or (ii) any liability resulting or arising from the failure to timely file such Section 83(b)re
Appears in 1 contract