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Maverick
Maverick, Attorney
Category: Legal
Satisfied Customers: 5934
Experience:  20 years experience as a civil trial and appellate lawyer
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My company provided me a "Profits Interest Unit Agreement"

Customer Question

My company provided me a "Profits Interest Unit Agreement" and I had questions regarding the award amount I am to receive:
Date of Grant: 7/30/2015
Vesting starts date: 7/7/2014
Threshold Amount: $300,000,000
Total Units: 100
Vesting schedule:
Percentage of Profits interest units:
%25 for the 1st, 2nd,3rd & 4th anniversary of date of grant
Submitted: 1 year ago.
Category: Legal
Expert:  Maverick replied 1 year ago.

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Answer:

From the information you have given it appears that you will have 25 units vest on each of the following dates:

7/30/16; 7/30/17; 7/30/18; and 7/30/19

It appears that your profits interest are based on increases in the future equity value of the firm resulting from appreciation above a threshold amount of $300,000,000.

It appears to say that you get 25% of the increase in equity above the threshold amount based on a pro-rata percentage of how many shares you have vested.

So if as of 7/30/16 the firm's equity increased say $100,000.00 and there are a total of 200 units vested, you would get 1/8th of $25,000.00

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Customer: replied 1 year ago.
Thanks- for better clarity ..I only have 100 units - it would not increase to 200 will it? If not what is the difference?
Expert:  Maverick replied 1 year ago.

From what you have stated it does not appear that your 100 units will go to 200. Rather, you have to remeber that when your first 25 units of the total 100 vest in 2016; then at that time there are other people who have units vesting too. So you are part of a group of say 200; but it could be 2000 or someother number.