Unit Splits or Combinations Clause Samples
The "Unit Splits or Combinations" clause defines how ownership units, such as shares or partnership interests, may be divided into smaller units or combined into larger ones. This clause typically outlines the procedures and conditions under which such changes can occur, including who has the authority to approve them and how records are updated to reflect the new unit structure. Its core practical function is to provide flexibility in managing ownership interests while ensuring that all changes are properly documented and authorized, thereby maintaining clarity and order in the entity’s ownership records.
Unit Splits or Combinations. In case the outstanding Common Units shall be subdivided into a greater number of Common Units, the Exercise Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be reduced, and, conversely, in case the outstanding Common Units shall each be combined into a smaller number of Common Units, the Exercise Price in effect at the opening of business on the day following the date upon which such combination becomes effective shall be increased, in each case, to equal the product of the Exercise Price in effect on such date and a fraction, (i) the numerator of which shall be the number of Common Units outstanding immediately prior to such subdivision or combination, as applicable, and (ii) the denominator of which shall be the number of Common Units outstanding immediately after such subdivision or combination, as applicable. Such reduction or increase, as applicable, shall become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective (the “Alteration Date”).