Meaning and transaction use
An SEC-filed proxy describes incentive units split between time vesting and exit vesting tied to MOIC and IRR hurdles. [S1]
An SEC-filed award agreement makes exit vesting conditional on continued employment and specified investor MOIC and IRR outcomes. [S2]
Proposed control method: maintain a participant-level register of grants, conditions, service, performance evidence, forfeitures and approvals.
Worked example
Illustrative award only. Assume 10,000 units, of which 60% time-vest over four equal annual tranches and 40% depend on an exit hurdle. Two annual tranches have vested and the exit hurdle is unmet.
Scroll the table horizontally to view all columns.
| Measure | Calculation | Result |
|---|---|---|
| Time-vesting pool | 10,000 x 60% | 6,000 units |
| Annual time tranche | 6,000 / 4 | 1,500 units |
| Time-vested after two tranches | 1,500 x 2 | 3,000 units |
| Total vested percentage | 3,000 / 10,000 | 30% |
The illustrative vested amount is 3,000 units, or 30%; the 4,000 exit-vesting units remain unvested.
Proposed transaction review process
Document grants
Record participant, instrument, units, price and grant approval.
Map conditions
Set service, performance, exit, acceleration and leaver rules.
Track evidence
Update service dates, performance results and corporate events.
Approve outcomes
Document vesting, forfeiture, repurchase, exercise and register changes.
Evidence checklist
Plan
Plan rules, award agreement and board approvals.
Service
Start date, employment status, leave and termination records.
Performance
MOIC, IRR, KPI or exit calculations and approvals.
Ownership
Award register, cap table, exercises, repurchases and tax records.
Decision framework
| Situation | Proposed action |
|---|---|
| A participant leaves | Apply the documented leaver and repurchase terms. |
| A transaction occurs | Test acceleration, assumption, substitution and cash-out clauses. |
| A return hurdle is met early | Apply any documented accelerated-vesting provision. |
| Records conflict | Pause the ownership update and reconcile source documents. |
Common errors to check
- Treating granted units as vested units.
- Ignoring continued-employment conditions.
- Applying acceleration without a qualifying event.
- Updating the cap table without approval evidence.
Reconcile the management award register
Bring the plan, award agreements, service records and return calculations to a vesting review. Confirm every vested, unvested and forfeited unit.
Discuss the transactionPrimary references and editorial scope
- SEC filing: Time and exit-vesting incentive units
Example split between time vesting and exit vesting tied to MOIC and IRR hurdles. Reference checked 17 September 2026. - SEC filing: MOIC and IRR exit-vesting award
Example continued-employment condition and return-based exit vesting. Reference checked 17 September 2026.
General transaction education using public United States filings. Figures are hypothetical. Executed plan, award, employment, tax and equity documents govern actual vesting.
General business information. Obtain advice appropriate to the legal, tax, accounting and financing facts. No offer, lender commitment or transaction outcome is represented. All worked examples use expressly assumed figures. Editorial draft date: 17 September 2026.
