Incentive Distributions Clause Samples
The Incentive Distributions clause defines how additional payments or rewards are allocated to parties based on the achievement of certain performance targets or milestones. Typically, this clause outlines the specific criteria that must be met to trigger incentive payments, such as surpassing revenue goals or completing a project ahead of schedule, and details the method for calculating and distributing these incentives. Its core practical function is to motivate parties to exceed baseline expectations by providing a clear, contractual mechanism for sharing the benefits of superior performance.
Incentive Distributions. After the aggregate of distributions of Net Ordinary Cash Flow and Net Extraordinary Cash Flow have caused each Member’s internal rate of return as defined herein to equal or exceed 13%, Inland shall be entitled to an incentive distribution (the “Incentive Distribution“) equal to 20% (the “Incentive Distribution Percentage”) of all amounts that would otherwise be available for distribution to the Members pursuant to Section 7.4(c). The calculation of the internal rate of return (“IRR”) shall take into account the amount and timing of all Capital Contributions and distributions made hereunder shall be determined in accordance with EXHIBIT 7-C attached hereto. For purposes of determining whether the IRR has been met hereunder, if any Member hereafter acquires a Property from the Company in accordance with the terms of this Agreement, or otherwise, any distributions made by the Company to the Members as a result of such transaction, whether in cash or in-kind, shall be deemed to have been a distribution of Net Extraordinary Cash Flow to the Members. The Incentive Distribution shall first be calculated within 10 days after the Company (directly or through its Subsidiaries) has sold all of its Properties, and shall be paid to Inland by the Company out of the next distribution of Net Extraordinary Cash Flow to be paid to Members hereunder within 10 days after the calculation of the Incentive Distribution. Under no circumstances shall the Incentive Distribution be payable during any period of time in which the Company or any Subsidiary owns any Property. The Incentive Distribution shall be paid to Inland after distributions to satisfy Company Loans, but before distributions to Members in accordance with their Percentage Interests. In the event that the aggregate amount of the Incentive Distribution to be paid to Inland is greater than the amount of Net Extraordinary Cash Flow which is available to satisfy the Incentive Distribution, each Member shall repay to the Company upon demand on a pro rata basis such portion of the distributions previously made by the Company to such Member as shall be necessary to permit the Company to pay the Incentive Distribution which is due to Inland hereunder. After the payment of the Incentive Distribution, any amounts remaining shall be distributed to the Members in accordance with their Percentage Interests. By way of example, suppose (i) the Net Extraordinary Proceeds from the sale of the last Property owned by the Company are $...
Incentive Distributions. (a) When and if Whitehall has achieved a 15% Internal Rate of Return with respect to its investments in the Company, then Participant shall be entitled to a cash payment in the amount of $500,000 to be paid to Participant within five business days of notice from Whitehall.
(b) In addition to the foregoing, when and if Whitehall has achieved a 20% Internal Rate of Return with respect to its investments in the Company, then Participant shall be entitled to (b) a cash payment in the amount of $500,000 to be paid to Participant within five business days of notice from Whitehall (the cash payments in the foregoing clauses 6(a) and 6(b) shall be known as “Incentive Distributions”).
Incentive Distributions. In any Calendar Year in which an Incentive Distribution is paid to Inland, there shall be allocated to Inland, net profits equal to the amount of Incentive Distribution that was paid to Inland. If the amount of net profits for the Calendar Year is less than the amount of Incentive Distribution paid to Inland in that Calendar Year, or if there is a net loss for the Calendar Year, there shall instead be allocated to Inland with respect to the Incentive Distribution being paid items of gross income to the extent necessary so that there shall be allocated to Inland so far as possible (and to the extent not so possible, in succeeding Calendar Years) an aggregate of net profits or items of gross income equal to the Incentive Distribution paid to Inland for the Calendar Year. Any amounts specially allocated hereunder to Inland in respect of an Incentive Distribution paid to Inland shall reduce the net profit or increase the net loss to be allocated among the Members in accordance with paragraph (a), above.
Incentive Distributions. The portion of any Distributions of Net Cash Flow to Campus Crest under Sections 4.1(a)(v) and/or (vi) and Sections 4.1(b)(v) and/or (vi) in excess of its Participating Percentage. Initial Capital Contribution shall mean the amount of cash or the Fair Market Value of any property contributed to the Company by the Members pursuant to Section 3.1 hereof.
Incentive Distributions. (i) Within 10 days after a Major Capital Event by the Company (or one of its Subsidiaries), and the determination of the amount of Net Extraordinary Cash Flow which is distributable to each Member with respect to such Property, the Manager shall cause each Member’s internal rate of return (“IRR”) to be calculated taking into account the amount and timing of all Capital Contributions and all distributions made hereunder prior to such Major Capital Event with respect to all of the Properties of the Company in accordance with EXHIBIT 7-A attached. Inland shall be entitled to an incentive distribution (the “Incentive Distribution“) set forth below (the “Incentive Distribution Percentage) depending upon the IRR of the Members and as reflected in Section 7.4(c)(iii) and (iv): Members’ Internal Rate of Return (“IRR”) (The calculation of the IRR shall take into account the amount and timing of all Capital Contributions of and distributions to Members and shall be determined in accordance with the rules contained in EXHIBIT 7-A.) Incentive Distribution to Inland By way of example, suppose (i) the net proceeds from the sale of a Property owned by the Company are $200, (ii) there are no Company Loans and no Default Contributions have been made, (iii) the Members’ Unreturned Capital is $70 which will be distributed pursuant to Section 7.4(c)(i), and (iv) after an additional $30 is distributed to the Members under Section 7.4(c)(ii), each Member will have achieved an IRR of greater than 11%, but less than 13%. Then, the next $100 would be distributed as follows: $5 would be distributed to Inland as an Incentive Distribution, and the remaining $95 would be distributed $76 to SAU and $19 to Inland in accordance with their respective Percentage Interests. (See EXHIBIT 7-B). For purposes of determining whether the IRR has been met hereunder, no Member shall be deemed to have received the amount of the Incentive Distributions paid to Inland hereunder. No amount paid by the Company to Inland as Incentive Distribution is intended to constitute a fee or other remuneration for services.
(ii) Each calculation of the Incentive Distribution will be made on a cumulative basis. After determination of the aggregate amount of the Incentive Distribution payable at any time to Inland hereunder, the Incentive Distribution shall be adjusted as follows: (A) the amount of the Incentive Distribution payable to Inland shall be decreased by the amount of any and all Incentive Distributions pre...
Incentive Distributions. (a) The General Partner, on behalf of the Partnership, shall, in respect of each Distribution Period, declare payable to holders of Special Interest Rights at the close of business on the Distribution Record Date for such Distribution Period as a distribution on the Special Interest Rights, an incentive distribution amount (the “Incentive Distribution Right”) calculated as follows: Incentive Distribution Right = 25% x [(Total Distributions – (Outstanding Units x (Base IDR Distribution per Unit/Distribution Frequency)))/75%] x (1 – Tax Rate) The Incentive Distribution Right shall be payable to the holders of Special Interest Rights in cash in accordance with such holder’s proportionate interest in the Special Interest Rights on such Distribution Record Date.
(b) For each Distribution Period until the end of the Initial Distribution Term, the General Partner, on behalf of the Partnership, shall, in respect of each Distribution Period, declare payable to the holders of Special Interest Rights at the close of business on the Distribution Record Date for such Distribution Period as a distribution on the Special Interest Rights, a performance distribution amount (the “Temporary Performance Distribution Right”) calculated as follows: Temporary Performance Distribution Right = 33% x [(Total Distributions – (Outstanding Units x (Base TDPR Distribution per Unit/Distribution Frequency)))/80%] The Temporary Performance Distribution Right shall be payable to the holders of Special Interest Rights in that number of newly issued Class D Units equal to the Temporary Performance Distribution Right amount divided by the Market Price and the Capital Contribution for each such Class D Unit will be the Market Price on the date of issuance of such Unit.
(c) The Incentive Distribution Right and the Temporary Performance Distribution Right will only be payable to holders of the Special Interest Rights when the calculations set forth above in subsections 5.3(a) and 5.3(b), respectively, yield a positive number.
(d) Appropriate adjustments to the amount of the Base IDR Distribution per Unit, so as to properly reflect changes in the number of Outstanding Units as a result of any issuance of Class C Units, ECT Preferred Units, ECT Class B Units or Fund Units, or any subdivision, consolidation, reclassification, conversion, recapitalization, amalgamation, merger, reorganization or other similar event affecting the capital of any of the Partnership, ECT or the Fund shall be made as agr...
Incentive Distributions. As defined in the last paragraph of Section 5.2.B.
Incentive Distributions