Rule 701 Plan Clause Samples
The Rule 701 Plan clause establishes a framework for granting equity-based compensation, such as stock options or restricted stock, to employees, directors, and certain consultants of a private company under the exemption provided by Rule 701 of the Securities Act of 1933. This clause typically outlines eligibility, the types of awards available, and compliance requirements, including limits on the aggregate value of securities issued and necessary disclosure obligations if certain thresholds are exceeded. Its core function is to enable private companies to incentivize and retain key personnel with equity awards while remaining compliant with federal securities laws and avoiding the need for costly registration of securities.
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Rule 701 Plan. This Section 3.5 together with the equity agreements pursuant to which the Residual Units are issued to Management Unitholders are intended to qualify as a compensatory benefit plan within the meaning of Rule 701 of the Securities Act (and any similarly applicable state "blue-sky" securities laws) and the issuance of Residual Units pursuant hereto is intended to qualify for the exemption from registration under the Securities Act provided by Rule 701 (and any similarly applicable state "blue-sky" securities laws); provided, that the foregoing shall not restrict or limit the Company's ability to issue any Residual Units pursuant to any other exemption from registration under the Securities Act available to the Company. The Company may make the Residual Units and any issuance thereof and any applicable equity agreement subject to the terms and conditions of any other equity incentive plan consistent with the terms of this Agreement, as may have been adopted by the Company.
Rule 701 Plan. This Agreement is a Rule 701 plan pursuant to which all Initial Units held by Initial Service Providers and all Units that constitute solely an economic interest in the profits and appreciation of the Company following the date of the issuance of such Units (a “Profits Interest”) shall be issued and granted in compliance with the securities registration exemption provided by Rule 701 of the Securities Act or another applicable exemption (such plan as in effect from time to time, the “Incentive Plan”). All Profits Interests that were issued prior to the Conversion were intended to constitute "profits interests” in the Company within the meaning of IRS Revenue Procedure 93-27. In addition to the Initial Units authorized to be issued under Section 3.2, the Board is hereby authorized to issue Profits Interest Units from time to time, in such amounts as it sees fit to Service Providers as may be authorized by the Board from time to time. For the avoidance of doubt, all Profits Interest Units shall be subject to the rights of the holders of Units to drag along the holders of Profits Interest Units pursuant to Section 11.3.
Rule 701 Plan. This Section 2.10 together with the equity agreements pursuant to which the Class F Units are issued are intended to qualify as a compensatory benefit plan within the meaning of Rule 701 of the Securities Act (and any similarly applicable state “blue-sky” securities laws) and the issuance of Class F Units pursuant hereto is intended to qualify for the exemption from registration under the Securities Act provided by Rule 701 (and any similarly applicable state “blue-sky” securities laws); provided that the foregoing shall not restrict or limit the Company’s ability to issue any Class F Units pursuant to any other exemption from registration under the Securities Act available to the Company. The Company may make the Class F Units and any issuance thereof and any applicable equity agreement subject to the terms and conditions of any other equity incentive plan consistent with the terms of this Agreement, as may be adopted by the Company.
Rule 701 Plan. This Agreement is a Rule 701 plan pursuant to which all Initial Units held by Initial Service Providers and all Units that constitute a “profits interest” in the Company within the meaning of IRS Revenue Procedure 93-27 (a “Profits Interest”) shall be issued and granted in compliance with the securities registration exemption provided by Rule 701 of the Securities Act or another applicable exemption (such plan as in effect from time to time, the “Incentive Plan”). The Company may elect in the future to grant Profits Interest Units to Service Providers. In connection with any future issuance of Profits Interest Units, the Board is hereby authorized to negotiate and enter into award agreements with each Service Provider to whom it grants Units that constitute a Profits Interest (such agreements, “Award Agreements”). Each Award Agreement shall include such terms, conditions, rights and obligations as may be determined by the Board, in its sole discretion.
Rule 701 Plan. The arrangements contemplated by this Plan constitute a “written compensation contract” within the meaning of Rule 701(c) of the Securities Act. EXHIBIT B - Page 7 Exaro Energy III LLC, a Delaware limited liability company (the “Company”), hereby grants to _______________________ (the “Participant”), an Eligible Employee, as defined in the Management Incentive Plan of the Company, as amended from time to time (the “Plan”), an award of _____ Management Incentive Units (“MIUs”), subject to the following terms and conditions:
Rule 701 Plan. This Agreement is a Rule 701 plan pursuant to which all Initial Units held by Initial Service Providers and all Units that constitute a “profits interest” in the Company within the meaning of IRS Revenue Procedure 93-27 (a “Profits Interest”) shall be issued and granted in compliance with the securities registration exemption provided by Rule 701 of the Securities Act or another applicable exemption (such plan as in effect from time to time, the “Incentive Plan”). In addition to the Initial Units authorized to be issued under Section 3.2, the Board is hereby authorized to issue 45,555 Profits Interest Units (the “Initial PIU Pool”) to Service Providers, either directly or through Impermanence. In connection with any future issuance of Profits Interest Units, the Board is hereby authorized to negotiate and enter into award agreements with each Service Provider to whom it grants Units that constitute a Profits Interest (such agreements, “Award Agreements”). Each Award Agreement shall include such terms, conditions, rights and obligations as may be determined by the Board, in its sole discretion. Solely relative to the issuance of the Initial PIU Pool, the Board hereby authorizes ▇▇. ▇▇▇▇▇▇▇, in his capacity as CEO of the Company, to issue such Profits Interest Units to such Service Providers and in such amounts that he determines to be in the best interest of the Company (provided that such Units are not issued to ▇▇. ▇▇▇▇▇▇▇, his family members or affiliates), in each case, subject to the form of Award Agreement titled “Profits Interest Grant Agreement,” attached as Exhibit A hereto.