Common use of Management Incentive Plan (MIP Clause in Contracts

Management Incentive Plan (MIP. Purpose: To assist the Company in attracting and retaining key employees and to provide such persons with long-term incentives and rewards for superior performance and maximizing shareholder value. Participants: The participants (the “Participants”) in the MIP as of the Effective Time (the “Effective Date”) shall be: (i) members of the Key Management Team, and (ii) such other key employees of the Company who are selected from time to time by the CEO and CFO of the Company to participate in the MIP, are awarded MIP Units and are approved by the Board or an authorized committee thereof (the “Board”). For purposes of finalizing and executing the Employment Agreement Term Sheets with the members of the Key Management Team on or before execution of the Merger Agreement, the Parties agree that the vesting, forfeiture and related terms set forth in this MIP section of this term sheet shall apply only to the Key Management Team and that the vesting, forfeiture and related provisions that will be applicable to other management employees will be proposed by the Key Management Team after execution of the Merger Agreement, must be approved by Moon (between execution of the Merger Agreement and the Effective Time) to be effective and will be no more favorable to any such employees than the terms for the Key Management Team. MIP Units Available Under the MIP: Prior to closing, the Board will determine the total number of MIP Units available for allocation under the MIP. The holders of MIP Units shall be entitled to receive distributions equal to 15% of the Company’s distributable cash as and when distributed (the “15% MIP Distribution”) to holders of Equity Interests during any period all holders of Equity Interests have achieved at least a 9% IRR (“Target IRR”) and an IRR of not more than 14% (13% if the aggregate initial investment of the Key Management Team and the Additional Employees is equal to or greater than $22 million). During any period all holders of Equity Interests have achieved an IRR in excess of 14% (13% if the aggregate initial investment of the Key Management Team and the Additional Employees is equal to or greater than $22 million), the holders of MIP Units shall be entitled to receive distributions equal to 20% of the Company’s distributable cash as and when distributed (the “20% MIP Distribution”). MIP Units shall be entitled to receive on each Distribution Date on which a MIP Distribution is made or Scheduled Liquidity Event date an allocable share of any MIP Distribution based on a fraction, the numerator of which equals the Participant’s total awarded MIP ▇▇▇▇▇ and the denominator of which is the total MIP Units awarded under the MIP as of such date. Unawarded MIP Units Payment: To the extent that there are any MIP Units that have not been awarded as of the Distribution Date of any MIP Distribution, Participants will be eligible to receive an additional payment equal to the portion of the product of (i) the MIP Distribution attributable to such unawarded MIP Units times (ii) a ratio of (x) a Participant’s total MIP Units awarded as of such Distribution Date and (y) the total number of MIP Units awarded under the MIP as of such Distribution Date. Scheduled MIP Distributions: The Company will provide liquidity to holders of MIP Units as follows: • on the Initial Payout Date, Participants will be entitled to receive a payout by the Company pursuant to the terms of the MIP equal to 50% of the MIP Distribution (if any) that would be payable with respect to a Participant’s MIP Units upon a hypothetical sale of the Company at Fair Market Value, provided, that the Target IRR were achieved upon such hypothetical sale and, provided further, that the MIP Distribution shall be calculated based solely on the 15% MIP Distribution; • on the Second Payout Date, Participants will be entitled to receive a payout by the Company pursuant to the terms of the MIP equal to 62.5% of the MIP Distribution (if any) that would be payable with respect to a Participant’s MIP Units upon a hypothetical sale of the Company at Fair Market Value, provided, that the Target IRR were achieved upon such hypothetical sale and taking into account any and all prior payments made under the MIP and, provided further, that the MIP Distribution shall be calculated based solely on the 15% MIP Distribution; and • on the Final Payout Date, Participants will be entitled to receive payout by the Company pursuant to the terms of the MIP equal to 100% of the MIP Distribution (if any) that would be payable with respect to a Participant’s MIP Units upon a hypothetical sale of the Company at Fair Market Value, provided, that the Target IRR were achieved upon such hypothetical sale and taking into account any and all prior payments made under the MIP and, provided further, that the MIP Distribution shall be calculated based solely on the 15% MIP Distribution. Participants may also be entitled to receive an Unawarded MIP Units Payment as of the Initial Payout Date, Second Payout Date or Final Payout Date, as applicable.