Upon Annual NAV Increase Clause Samples
The 'Upon Annual NAV Increase' clause establishes specific actions or consequences that are triggered when the Net Asset Value (NAV) of a fund or investment vehicle increases over a one-year period. Typically, this clause may dictate adjustments to management or performance fees, trigger incentive payments, or alter investor rights based on the annual NAV growth. For example, if the NAV rises by a certain percentage, fund managers might become eligible for a performance bonus, or investors may receive additional distributions. The core function of this clause is to align incentives and ensure that stakeholders are rewarded or obligations are adjusted in response to positive financial performance, thereby promoting transparency and fairness in the management of investment returns.
Upon Annual NAV Increase. 40.0% of annual increase in NAV per share, if any, as of each December 31, multiplied by the number of outstanding shares as of such December 31, paid by January 31 of the subsequent year and payable in the form of our shares at the price then being paid by the public to purchase our shares (most recent NAV per share), subordinated to payment to investors of an annual 6.5% cumulative, non-compounded return in the calendar year preceding the January 31 payment date (from operating cash flow). For the purpose of calculating the subordinated participation, only increases over the highest previous NAV per share calculation shall be included, reduced by any prior return of capital.
Upon Annual NAV Increase. The Company shall pay to the Advisor or one of its Affiliates 40.0% of the annual increase in NAV Per Share, if any, as of each December 31, multiplied by the number of outstanding shares as of such December 31, paid by January 31 of the subsequent year and payable in the form of Shares at the price then being paid by the public to purchase Shares (the most recently published NAV Per Share after giving effect to any accrual of the Subordinated Participation Fee due under this Section 9(g), subordinated to payment to Stockholders of the Stockholders’ 6.5% Return preceding the January 31 payment date. For the purpose of calculating the Subordinated Participation Fee, only increases over the highest previous price per Share paid by the public shall be included, reduced by any prior return of capital.