Restricted Unit Grant Agreement
Agreement Date and Date
of Grant:
Company:
Grantee:
February [ ], 2014
ACME LLC
Jason Gabbard
Membership Units:
[
] Common Units of the Company, which shall be considered a
“profits interest” as such term is defined in Revenue Procedure 93-27
Operating Agreement:
the Operating Agreement of the Company, dated as of November 20,
1879, and as amended from time to time
Cliff Amount:
25% of the Membership Units
Monthly Vest:
2.0833% (or 1/48) of the Membership Units, vesting monthly on a
monthly basis as set forth herein (i.e., a vesting schedule of 4 years)
ARTICLE 1. ADMISSION OF THE GRANTEE AND GRANT OF RESTRICTED
MEMBERSHIP UNITS
Section 1.1. Admission of the Grantee as a Member. The Grantee is hereby admitted as a
Member of the Company, and the Grantee hereby agrees to be bound by the Operating Agreement.
Section 1.2. Grant of Restricted Membership Units. As of the Date of Grant, the Grantee, in
connection with its admission as a Member of the Company and in consideration for rendering Services to
the Company, shall receive the Membership Units. Membership Units are non-voting. The Membership
Units shall, except as otherwise provided in this Agreement and the Operating Agreement, have the same
rights, preferences, limitations, and privileges as all other issued and outstanding Membership Units of
the Company, including, without limitation, the rights to receive allocations of Profits and Losses. All
Membership Units granted pursuant to this Section 1.2. shall be subject to vesting pursuant to ARTICLE
3.
Section 1.3. Revaluation of the Members’ Capital Accounts. As a result of such admission,
the Capital Accounts shall be revalued as and to the extent provided in the Operating Agreement.
Section 1.4. Compliance with Securities Act. The Grantee represents and warrants that the
Grantee has acquired the Membership Units for the Grantee’s own account for investment, and not with a
view to any distribution thereof so as to cause a violation of the Securities Act of 1933, as amended (the
“Securities Act”), or any rules or regulations thereunder. In addition to all other restrictions contained in
this Agreement or the Operating Agreement or required by law, the Grantee shall not sell, assign, gift,
place in trust, place in joint names, transfer, mortgage, pledge, alienate, hypothecate, devise, distribute or
in any way encumber or dispose of (including encumbrances or dispositions in bankruptcy or otherwise,
by operation of law or court order) any of the Membership Units (hereinafter referred to as a
“Disposition”) except (a) either (1) pursuant to an effective registration statement under the Securities Act
as then in effect covering such Membership Units and such proposed Disposition, or (2) upon first
furnishing an opinion of counsel satisfactory to the Company stating that the proposed Disposition is not
in violation of the registration requirements of the Securities Act, and (b) the proposed transferee of the
Membership Units makes such undertakings and agreements with the Company as the Company may
reasonably require to insure continued compliance with this Agreement, the Operating Agreement and the
Securities Act. The Grantee further acknowledges that the Membership Units are restricted, unregistered
securities and that the Grantee must hold them indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available and that the Company is under no
obligation to register the Membership Units or to comply with any such exemption. In addition, the
Membership Units are subject to certain restrictions on transfer which are set forth in the Operating
Agreement.
Section 1.5. Tax Treatment of the Grant of Membership Units; Section 83(b) Election. It is
the intention of the parties that the Membership Units granted under and pursuant to this Agreement shall
be treated as a “profits interest” under and pursuant to Revenue Procedure 93-27 (as clarified by Revenue
Procedure 2001-43) for federal income tax purposes. Accordingly, it is intended that the receipt of the
Membership Units should not be taxable to the Grantee. Notwithstanding the intention of the parties to
treat the grant of the Membership Units as a grant of a “profits interest”, the Company is not hereby and
does not guarantee the intended income tax consequences, and the Grantee is urged to consult its own tax
advisors. The Grantee may elect to file with the Internal Revenue Service an election with respect to the
Membership Units under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”),
and the Company will cooperate on any such filing.
ARTICLE 2. CERTAIN DEFINITIONS
Section 2.1. Certain Definitions. As used in this Agreement:
“Cause Event” means any of the following:
(i)
conduct reasonably determined by the Company’s Board of Directors to constitute a
refusal by the Grantee to faithfully and diligently perform his duties;
(ii)
fraud, misappropriation or embezzlement, or any other action of material misconduct
by the Grantee against the Company or any of its affiliates or subsidiaries;
(iii) any violation of any Company policy as reflected in any employee handbook or
Company code of conduct, or as communicated to the Grantee from time to time; (iv) disclosure of any of the Company’s confidential information in a manner contrary to
any agreement between the Company and the Grantee or any stated Company policy;
(v)
engagement in any competitive activity that would constitute a breach of the
Grantee’s duty of loyalty to the Company, or in any conduct that is materially injurious to the
Company’s prospects, business or results of operations;
(vi) commission of a material violation of any law, rule or regulation of any
governmental or regulatory body material to the business of the Company, or engagement in
conduct reasonably likely to result in the violation of any such law, rule or regulation or the
revocation of any of Company’s licenses, permits or governmental permissions necessary to
conduct the Company’s business;
(vii) conviction of, or entry of a guilty or nolo contendere plea to, a felony or any crime
involving moral turpitude; or -2-
(viii)
gross negligence or willful misconduct on the part of Grantee.
“Person” shall mean any individual, firm, association, corporation, partnership, limited
liability company, trust, estate or other entity.
“Termination Event” shall mean the termination of the Grantee’s Services to the
Company, whether at the behest of the Company, due to the Grantee’s resignation of its
employment or directorship with the Company, or upon the death or disability of the
Grantee. The Company shall determine the date as of which any employment,
directorship or consultancy has terminated.
ARTICLE 3. VESTING OF MEMBERSHIP UNITS
Section 3.1. Vesting Schedule. All Membership Units shall be treated as time vesting
Membership Units and shall be unvested, subject to the vesting conditions as follows. Subject to the other
terms and conditions of this Agreement, no Membership Units shall be deemed to be vested until Grantee
has completed twelve full months of continuous Service with the Company beginning on the Date of
Grant, at which time the Cliff Amount shall vest. Thereafter, and for so long as Grantee shall remain in
continuous employment or Service with the Company, the Monthly Vest shall apply as Grantee completes
each full month of continuous Service, until all of the Membership Units have vested; provided, that in
the final month of such vesting schedule an additional number of units shall vest to make the total vested
units equal the number of Membership Units. For the avoidance of doubt, except as set forth above, when
Grantee’s Services terminate, in the reasonable discretion of the Managing Member of the Company, all
vesting shall immediately and automatically cease as of the end of the last full month of Grantee’s
Services with the Company.
Section 3.2. Forfeitures. Except as the Company may otherwise determine, all unvested
Membership Units shall be forfeited immediately upon a Termination Event. Notwithstanding anything
to the contrary contained in Section 3.1. or elsewhere in this Agreement, all of the Membership Units
(whether vested or unvested) shall be forfeited upon termination for a Cause Event.
ARTICLE 4. REDEMPTION
Section 4.1. Company Right to Redeem Vested Membership Units upon a Termination
Event. In addition to and not in limitation of the rights of the Company and the restrictions on the
Membership Units contained in the Operating Agreement, in the event of a Termination Event for any
reason or no reason, the Company shall, for a period of 180 days after such Termination Event, have the
option, but not the obligation, to purchase all or any portion (at the election of the Company) of the vested
Membership Units held by the Grantee (the “Redemption”). The purchase price for any Membership
Units in the Redemption shall be the fair market value of such Membership Units as determined by an
appraiser selected by the Company at the time of Redemption (the “Purchase Price”). Upon the
Redemption, the Company shall pay the applicable Purchase Price upon such terms as shall be determined
by the Managing Member in the Managing Member’s reasonable discretion.
Section 4.2. Other Provisions. For the avoidance of doubt but not in limitation of any provision
of this Agreement or the Operating Agreement, it is understood that, if the Company does not purchase
any vested Membership Units pursuant to Section 4.1. , the restrictions contained in the Operating
Agreement shall continue to apply to all such vested Membership Units not so purchased.
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ARTICLE 5. TRANSFERS
Section 5.1. Restrictions on Transfer. In addition to and not in limitation of the rights of the
Company and the restrictions contained in the Operating Agreement, the Grantee shall not be entitled to
transfer any of the Membership Units unless such Membership Units have previously vested.
ARTICLE 6. NOTICES
Section 6.1. Notices. All notices or other communications required or permitted to be given
under any of the provisions of this Agreement shall be in writing and shall be deemed to have been duly
given when delivered via e-mail to the addresses set forth below (with notice of change of address not
being valid until actually received).
ARTICLE 7. MISCELLANEOUS
Section 7.1. Conversion to Corporate Form. If the Managing Member incorporates the
Company as a corporation, the Grantee shall receive, in exchange for the Membership Units, shares of
capital stock of such corporation having the same relative economic interest and vesting provisions as is
set forth in this Agreement, including stock options or restricted stock or both, subject in each case to (i)
any modifications required solely as a result of the conversion to corporate form and (ii) any
modifications to conform to the provisions relating to actions of shareholders and a board of directors set
forth in the jurisdiction of incorporation. The Grantee hereby agrees to cooperate in whatever way
reasonably requested by the Company to facilitate the conversion of the Company.
Section 7.2. Assignment. The duties and obligations of the Grantee hereunder are not
assignable by the Grantee without the prior written consent of the Company.
Section 7.3. Further Actions. Each of the parties to this Agreement hereby agrees to perform
all further acts and execute, acknowledge and deliver any documents that may be reasonably necessary,
appropriate or desirable to carry out the provisions and purposes of this Agreement.
Section 7.4. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective heirs, executors, administrators, personal representatives, successors, and
permitted assigns. The term “personal representative” as used in this Agreement with respect to an
individual shall mean such individual’s guardian, committee, executor, administrator or other legal
representative duly empowered to act on its or her behalf following its or her death or legal incapacity.
This Agreement shall not be binding upon, and this Agreement shall not create any liability for or to, any
Managing Member of the Company (other than the Grantee, if applicable) or any subsidiary or affiliate of
the Company.
Section 7.5. Severability. If any provision of this Agreement shall be deemed invalid or
unenforceable as written, it shall be construed, to the extent possible, in a manner which shall render it
valid and enforceable, and any limitations on the scope or duration of any such provision necessary to
make it valid and enforceable shall be deemed to be part thereof; no invalidity or unenforceability shall
affect any other portion of this Agreement. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other jurisdiction.
Section 7.6. Incorporation by Reference. Every exhibit, schedule, agreement and other
appendix attached to or referred to in this Agreement is incorporated in this Agreement by reference
unless this Agreement expressly otherwise provides.
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Section 7.7. Entire Agreement. This Agreement, including any Exhibits and Schedules
attached hereto, together with any agreements referred to herein and any consulting, employment,
confidentiality and/or restrictive covenant agreement(s) entered into between the Grantee and the
Company or any Affiliate of the Company, contain the entire agreement among the parties hereto with
respect to the Company and supersede all prior agreements, covenants, arrangements, letters,
communications, representations or warranties, whether oral or written, by any party hereto with respect
to the Company or its business. No party shall be bound by any condition, definition, warranty or
representation, unless and only to the extent (i) expressly set forth or provided for in this Agreement or in
any other agreement entered into by a party on or subsequent to the date hereof, set forth in writing and
signed by the party to be bound thereby, or (ii) this Agreement (including the Exhibits and Schedules
hereto), or such other agreements, are amended pursuant to their terms. This Agreement expressly
supersedes and bars extra contractual statements and promises of any kind.
Section 7.8. Amendment. Except as otherwise expressly provided in this Agreement, no
amendment, modification or discharge of this Agreement shall be valid or binding unless agreed to in
writing by all of the Persons who are parties hereto at the time such amendment is agreed to.
Section 7.9. No Waiver. No waiver of any breach or default hereunder shall be considered valid
unless in writing and signed by the party giving such waiver, and no waiver shall be deemed a waiver of
any other prior or subsequent breach or default of the same or similar nature. No failure on the part of
any party to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
Section 7.10. Additional Remedies. All remedies, rights, powers and privileges, either under
this Agreement or by law or otherwise afforded the parties to this Agreement, shall be cumulative and
shall not be exclusive of any remedies, rights, powers and privileges provided by law. Each party hereto
may exercise all such remedies afforded to it in any order or priority.
Section 7.11. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof; provided, however, that each party
will have a right to seek injunctive or other equitable relief in a court of law. The prevailing party will be
entitled to receive from the non-prevailing party all costs, damages and expenses, including reasonable
attorneys’ fees, incurred by the prevailing party in connection with that action or proceeding, whether or
not the controversy is reduced to judgment or award. The prevailing party will be that party who may be
fairly said by the arbitrator(s) to have prevailed on the major disputed issues. Grantee hereby consents to
arbitration in the State of New York in the county of New York.
Section 7.12. Governing Law. This Agreement and any amendments hereof shall be governed
by and construed in accordance with the internal law (both substantive and procedural) of the State of
Delaware applicable to contracts made and to be performed therein.
Section 7.13. Legal Review. THE GRANTEE AGREES THAT HE OR SHE HAS BEEN
AFFORDED THE OPPORTUNITY TO REVIEW THIS AGREEMENT WITH COUNSEL, LEGAL
AND OTHERWISE, OF ITS CHOICE.
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DRAFT 01/29/14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
ACME LLC
GRANTEE
Chief Executive Officer
Address: 489 Fifth Avenue,
Suite 3100
e-mail:
@the-forefront.com
Name:
Email for notice:
[Profit Interests Agreement – Signature Page]
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