Common use of Profits Interests Clause in Contracts

Profits Interests. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) as a separate “Profits Interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest of such Incentive Member qualifies as a “Profits Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. In the event that distributions to a Member pursuant to Section 5.02 are limited as a result of the first sentence of this Section 3.08, the Board of Managers is authorized to adjust future distributions to the Members in whatever manner it reasonably deems appropriate so that, after such adjustments are made, each Member receives, to the maximum extent possible, an amount of distributions equal to the amount of distributions such Member would have received were such sentence not part of this Agreement. Additionally, in accordance with Rev. Proc. 2001-43, 2001-2 CB 191, the Company shall treat a Member holding an Incentive Unit as the owner of such Unit from the date it is granted, and shall file its IRS Form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with such Profits Interest as if it were fully vested. Each Incentive Member agrees to take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits Interest. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the fair market value of such Profits Interest issued to an Incentive Member, either at the time of grant of the Profits Interest or at the time the Profits Interest becomes substantially vested. The undertakings contained in this Section 3.08 shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. Each Incentive Member shall be required to file an election pursuant to Section 83(b) of the Code (a “Section 83(b) Election”) with respect to its Incentive Units no later than ten days after receipt of such Incentive Units. The provisions of this Section 3.08 shall apply regardless of whether or not an Incentive Member files a Section 83(b) Election with respect to its Incentive Units.

Profits Interests. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) Interest as a separate “Profits Interestprofits interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343. Notwithstanding anything herein to the contrary, and it is the intention distributions in respect of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) Profits Interests pursuant to Section 5.02 6.2(c) (solely with respect to such Member’s Profits Interests) shall be limited to the extent necessary so that the each Profits Interest of such Incentive Member qualifies as a “Profits Interestprofits interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. In the event that distributions to a Member pursuant to Section 5.02 6.2(c) are limited as a result of the first sentence of this Section 3.08preceding sentence, the Board of Managers Managing Member is authorized to adjust future distributions to the Members Member in whatever the manner it reasonably deems appropriate so that, after such adjustments are made, each Member receives, to the maximum extent possible, an amount of distributions equal to the amount of distributions such Member would have received were such sentence not part of this Agreement; provided, however, that any such adjustment to distributions shall be consistent with the treatment of the Profits Interests as “profits interests”. Additionally, in accordance with Rev. Proc. 2001-43, 2001-2 CB C.B. 191, the Company shall treat a Member holding an Incentive Unit Profits Interests as the owner of such Unit Profits Interests from the date it is grantedof grant, and shall file its IRS Form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with such Profits Interest as if it were fully vested. Each Incentive Member holding Profits Interests agrees to take into account such distributive share in computing its U.S. federal income tax liability for the entire period during which it holds the Profits InterestInterests. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the fair market value Fair Market Value of such Profits Interest Interests issued to an Incentive a Member, either at the time of grant of the Profits Interest or at the time the Profits Interest becomes substantially vested. The undertakings contained in this Section 3.08 5.1(e) shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. Each Incentive Member The provisions of this Section 5.1(e) shall be required to file apply regardless of whether or not the holder of a Profits Interest files an election pursuant to Section 83(b) of the Code (a “Section 83(b) Election”) with respect to its Incentive Units no later than ten days after receipt of such Incentive Units. The provisions of this Section 3.08 shall apply regardless of whether or not an Incentive Member files a Section 83(b) Election with respect to its Incentive UnitsCode.