Exhibit 10.24
INCENTIVE UNIT AWARD AGREEMENT
(Incentive Units of Partnership)
THIS INCENTIVE UNIT AWARD AGREEMENT (this “Agreement”) by and between Buzz Management Aggregator L.P., a Delaware limited partnership (“Partnership”), Buzz Holdings L.P., a Delaware limited partnership (“Parent”), and the individual named on the Signature Page hereto (“Participant”) is made as of the date set forth on such Signature Page.
WHEREAS, Partnership is an interest holder in Parent, and Parent is an indirect interest holder of the entity that employs Participant (the “Employer”);
WHEREAS, on the terms and subject to the conditions hereof, Participant desires to subscribe for and acquire from Partnership, and Partnership desires to issue and provide to Participant Class B Units of Partnership (collectively, the “Incentive Units”), in the amounts set forth on the Signature Page, as hereinafter set forth;
WHEREAS, on the terms and subject to the conditions hereof, Partnership desires to acquire from Parent, and Parent desires to issue and provide to Partnership, Class B Units of Parent, which shall be subject to the same terms and conditions as the Incentive Units; and
WHEREAS, this Agreement is one of several agreements being entered into by Partnership and Parent with certain persons who are or will be directors or key employees or advisors of Parent or one or more of its Subsidiaries, as part of management equity purchase plans designed to comply with Regulation D or Rule 701, as applicable, promulgated under the Securities Act.
NOW, THEREFORE, in order to implement the foregoing and in consideration of the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:
Doc#35383113-B
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(a) If to Partnership: | |
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Buzz Management Aggregator L.P. | |
c/o The Blackstone Group Inc. | |
345 Park Avenue | |
New York, New York 10154 | |
Attention: | Martin Brand |
| Jon Korngold |
Email: | brand@blackstone.com |
| jon.korngold@blackstone.com |
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with a copy to (which shall not constitute notice): | |
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Simpson Thacher & Bartlett LLP | |
425 Lexington Avenue | |
New York, New York 10017 | |
Attention: | Anthony Vernace |
| Gregory T. Grogan |
Email: | avernace@stblaw.com |
| ggrogan@stblaw.com |
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with a copy to: | |
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Buzz Holdings L.P. | |
1105 W. 41st Street, Suite A | |
Austin, TX 78756 | |
Attention: | General Counsel |
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(b) If to Parent: | |
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Buzz Holdings L.P. | |
c/o The Blackstone Group Inc. | |
345 Park Avenue | |
New York, New York 10154 | |
Attention: | Martin Brand |
| Jon Korngold |
Email: | brand@blackstone.com |
| jon.korngold@blackstone.com |
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with a copy to (which shall not constitute notice): | |
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Simpson Thacher & Bartlett LLP | |
425 Lexington Avenue | |
New York, New York 10017 | |
Attention: | Anthony Vernace |
| Gregory T. Grogan |
Email: | avernace@stblaw.com |
| ggrogan@stblaw.com |
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with a copy to: | |
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Buzz Management Aggregator L.P. | |
1105 W. 41st Street, Suite A | |
Austin, TX 78756 | |
Attention: | General Counsel |
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(c) If to Participant: | |
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To the most recent address of Participant set forth in the personnel records of Parent.
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IN WITNESS WHEREOF, the parties hereto have executed this Incentive Unit Award Agreement as of November 2, 2020. By executing the Signature Page, the parties also are agreeing to be bound by the Partnership LP Agreement, the Parent LP Agreement and the Securityholders Agreement, effective as of the Closing Date.
BUZZ MANAGEMENT AGGREGATOR L.P. | |
By: Buzz Holdings GP L.L.C., its general partner | |
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/s/ Whitney Wolfe Herd | |
By: | Whitney Wolfe Herd |
Title: | Chief Executive Officer |
BUZZ HOLDINGS L.P. | |
By: Buzz Holdings GP L.L.C., its general partner | |
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/s/ Whitney Wolfe Herd | |
By: | Whitney Wolfe Herd |
Title: | Chief Executive Officer |
PARTICIPANT |
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/s/ Laura Franco |
Name: Laura Franco |
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[address] |
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Address |
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[email address] |
Email address |
Please check the appropriate box: | |
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☑ | Participant is an “accredited investor”1 within the meaning of Rule 501(a) under the Securities Act of 1933, as amended. |
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☐ | Participant is not an “accredited investor” within the meaning of Rule 501(a) under the Securities Act of 1933, as amended. |
Number of Class B Units | 7,495,989.00 |
Closing Date | November 2, 2020 |
Vesting Reference Date | November 2, 2020 |
Base Price | $0.60 |
[1] You are an “accredited investor” if you meet any of the following tests:
CONSENT OF SPOUSE
I, David Kostin_____, the undersigned spouse of Laura Franco, hereby acknowledge that I have read the attached Incentive Unit Award Agreement, the Partnership LP Agreement, the Parent LP Agreement and Securityholders Agreement (collectively, the “Equity Documents”) and that I understand their contents. I am aware that the Equity Documents provide for the forfeiture of my spouse’s Class B Units (as defined in the Equity Documents and for purposes of this consent, the “Equity”) under certain circumstances and that the Equity Documents impose other restrictions on the transfer of such Equity. I agree that my spouse’s interest in the Equity is subject to the Equity Documents and any interest I may have in such Equity shall also be irrevocably bound by such Equity Documents and, further, that my community property interest in such Equity, if any, shall be similarly bound by such Equity Documents.
I am aware that the legal, financial and other matters contained in the Equity Documents are complex and I am encouraged to seek advice with respect thereto from independent legal and/or financial counsel. I have either sought such advice or determined after carefully reviewing the Equity Documents that I hereby waive such right.
Acknowledged and agreed this 16 day of Nov 2020.
Spouse: | |||
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Name: | David J. Kostin | ||
Address: | [address] | ||
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Signature: | /s/ David Kostin | ||
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Witness: | |||
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Name: | Laura Franco | ||
Address: | [address] | ||
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Signature: | /s/ Laura Franco |
Schedule A
Vesting of Incentive Units
All Incentive Units initially shall be Unvested Incentive Units upon the Closing Date.
Time-Vesting Incentive Units
60% of the Incentive Units granted hereunder (the “Time-Vesting Incentive Units”) shall become Vested Incentive Units as to 20% of such Time-Vesting Incentive Units on each of the first five anniversaries of the Vesting Reference Date (as set forth on the Signature Page), subject to Participant’s continued employment or service through each applicable vesting date.
Notwithstanding the foregoing, if Participant’s employment or service, as applicable, is terminated (x) without Cause by the Employer or its then-Affiliates or (y) by Participant for Good Reason, in either case, in the two-year period following a Change of Control, then all then-outstanding Time-Vesting Incentive Units (or substitute equity or consideration of purchaser or its Affiliates, as applicable) shall vest upon the Termination Date.
Upon any Termination Date, (i) all outstanding Time-Vesting Incentive Units that are Unvested Incentive Units (after taking into account any accelerated vesting in accordance with the preceding paragraph, if applicable) will be forfeited (provided, that if Participant’s employment or service, as applicable, is terminated by Parent or its Subsidiaries for Cause (or Participant resigns while grounds for Cause exist), all Vested Incentive Units shall also be forfeited or, to the extent such Vested Incentive Units are not able to be forfeited under applicable law, subject to the Call Option pursuant to Section 4 of the Agreement) and (ii) all Vested Incentive Units will be subject to the Call Option pursuant to Section 4 of the Agreement.
Performance-Vesting Incentive Units
40% of the Incentive Units granted hereunder (the “Performance-Vesting Incentive Units”) shall become Vested Incentive Units at such time, prior to a Termination Date that Sponsor and its Affiliates shall have received cash proceeds (excluding tax distributions (as defined in the Parent LP Agreement) to Sponsor up to Sponsor’s pro rata share of Parent’s net taxable income multiplied by a 30% combined U.S. federal and state tax rate) in respect of Sponsor’s investment in Class A Units held from time to time by Sponsor in an amount necessary to ensure both (x) a specified return on Sponsor’s cumulative Capital Contributions (the “MOIC Hurdle”) and (y) a specified annual internal rate of return on Sponsor’s cumulative Capital Contributions (the “IRR Hurdle”), as follows:
Portion of Performance-Vesting Incentive Units | MOIC Hurdle | IRR Hurdle |
33.3% | 2.5x MOIC | 17.5% IRR |
33.3% | 3.0x MOIC | 17.5% IRR |
33.4% | 3.5x MOIC | 17.5% IRR |
Schedule A-1
For purposes of determining whether the applicable MOIC Hurdle and/or IRR Hurdle has been satisfied, as applicable:
Upon the occurrence of a Change of Control, the Performance-Vesting Incentive Units that would not become Vested Incentive Units upon the occurrence of such Change of Control shall be forfeited immediately prior to the occurrence of such Change of Control.
Upon the Termination Date, all Performance-Vesting Incentive Units that are Unvested Incentive Units will be forfeited (provided, that if Participant’s employment or service, as applicable, is terminated by Parent or its Subsidiaries for Cause (or Participant resigns while grounds for Cause exist), all Vested Incentive Units shall also be forfeited, or, to the extent such Vested Incentive Units are not able to be forfeited under applicable law, subject to the Call Option pursuant to Section 4 of the Agreement) and Vested Incentive Units will be subject to the Call Option pursuant to Section 4 of the Agreement.
Schedule A-2
Exhibit I
Definitions
Agreement. The term “Agreement” shall have the meaning set forth in the preface.
Base Price. The term “Base Price,” when used in reference to a Class B Unit, such Class B Unit’s Deemed Unit Price.
Cause. The term “Cause” shall have the meaning ascribed to such term in Participant’s Employment Agreement.
Closing. The term “Closing” shall have the meaning set forth in Section 2.2.
Closing Date. The term “Closing Date” shall have the meaning set forth in Section 2.1.
Code. The term “Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
Competing Business. The term “Competing Business” means any business activities, including any product, service or process or the research and development thereof in (A) the business of online, web-based or mobile-based matchmaking for dating or romance; (B) online, web-based or mobile-based interpersonal matchmaking, including but not limited to professional networking; or (C) any other line of business in which Parent or any of its Subsidiaries (collectively, the “Company Group”) is engaged during Participant’s employment with the Company or in which any member of the Company Group had demonstrable plans to engage while Participant was employed by the Company Group and of which Participant was aware.
Cost. The term “Cost” shall mean the amount paid by Participant per Incentive Unit on the Closing Date, if any, as proportionately adjusted for all subsequent distributions of Incentive Units and other recapitalizations, and reduced by the amount of any distributions made with respect to the Incentive Units pursuant to Partnership’s organizational documents, as applicable; provided, that “Cost” may not be less than zero.
Disability. The term “Disability” shall have the meaning ascribed to such term in Participant’s Employment Agreement, and if not so defined therein, or if no such Employment Agreement exists, “Disability” shall mean, as determined by Parent in good faith, Participant’s inability and failure to substantially render the services to be provided by Participant to Parent and its Subsidiaries for a period of at least 180 days out of any consecutive 360 days due to a mental or physical condition.
Employment Agreement. The employment agreement by and between Participant and Bumble Trading LLC, dated October 26, 2020.
Employee and Employment. The term “employee” shall mean, without any inference as to negate Participant’s status as a Member of Partnership or of Parent, if applicable, for all purposes hereunder (subject to the terms hereof) and for federal and other tax purposes, any employee (as defined in accordance with the regulations and revenue rulings then applicable under Section 3401(c) of the Code) of Parent or any of its Subsidiaries, and the term “employment” shall include service as a part- or full-time employee of Parent or any of its Subsidiaries or member of the board of Parent or its Affiliates.
Exhibit I-1
Fair Market Value. The term “Fair Market Value” shall mean, when used in connection with the value of Class A Units or Class B Units, (i) if there is a public market for equity of Partnership on the applicable date, the value for the Class A Units or Class B Units shall be implied by the average of the high and low closing bid prices of such equity during the immediately preceding 10 trading days on the stock exchange on which the equity is principally trading or (ii) if there is no public market for the equity on such date, the value for the Class A Units or Class B Units shall be determined by the General Partner in good faith (it being understood that the value of the Class A Units or Class B Units shall be determined based on an equity valuation of the Partnership (defined as the price in cash that a willing buyer not affiliated with the seller and under no compulsion to buy would pay in an arms-length purchase from a willing seller not affiliated with the buyer under no compulsion to sell), which could then be converted formulaically into a fair market value for the Class A Units or Class B Units in accordance with Section 4.5 and Section 5.2 of the Parent LP Agreement). Fair Market Value shall be determined assuming that there is no discount attributable to such security because of either (A) the existence of one or more large or controlling Partners or any minority discount, (B) the terms and conditions of this Agreement applicable to such Class A Units or Class B Units at such time (other than application of Section 4.5 and Section 5.2 of the Parent LP Agreement) or (C) the fact that the Class A Units or Class B Units may be illiquid.
Financing Default. The term “Financing Default” shall mean an event which would constitute (or with notice or lapse of time or both would constitute) an event of default under any of the financing documents of Parent or its Affiliates from time to time (collectively, the “Financing Agreements”) and any restrictive financial covenants contained in the organizational documents of Partnership, Parent or their respective Affiliates.
Good Reason. The term “Good Reason” shall have the meaning ascribed to such term in Participant’s Employment Agreement.
Parent LP Agreement. The term “Parent LP Agreement” shall mean the Amended and Restated Limited Partnership Agreement of Parent, dated as of January 29, 2020 as may be amended or supplemented from time to time in accordance with its terms.
Participant. The term “Participant” shall have the meaning set forth in the preface.
Participant’s Group. The term “Participant’s Group” shall mean Participant and Participant’s Permitted Transferees.
Partnership LP Agreement. The term “Partnership LP Agreement” shall mean the Amended and Restated Limited Partnership Agreement of Partnership, dated as of January 29, 2020, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms.
Permitted Transferee. The term “Permitted Transferee” means any Person to whom Participant transfers Incentive Units in accordance with the Partnership LP Agreement, the Parent LP Agreement and the Securityholders Agreement (other than Partnership, Parent, the Blackstone Members and their respective Affiliates and except for transfers pursuant to a Public Offering).
Plan. The term “Plan” shall mean the Buzz Management Aggregator L.P. Equity Incentive Plan, as amended and/or restated from time to time.
Public Offering. The term “Public Offering” shall have the meaning set forth in the Parent LP Agreement.
Exhibit I-2
Restrictive Covenant Violation. The term “Restrictive Covenant Violation” shall mean Participant’s breach of any provision of Appendix A hereto or any similar corresponding provision applicable to Participant under a written agreement between Participant and Partnership, Parent or any of Parent’s Subsidiaries from time to time.
Securities Act. The term “Securities Act” shall mean the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder, as the same may be amended from time to time.
Securityholders Agreement. The term “Securityholders Agreement” shall mean the Securityholders Agreement, dated as of January 29, 2020, by and among Parent and the other parties thereto, as it may be amended or supplemented thereafter from time to time in accordance with its terms.
Sponsor. The term “Sponsor” shall mean The Blackstone Group Inc. and its Affiliates.
Termination Date. The term “Termination Date” shall mean the date upon which Participant’s employment with or service to, as applicable, Parent and its Subsidiaries is terminated for any reason (including death or Disability).
Unvested Incentive Units. The term “Unvested Incentive Units” means, with respect to Participant’s Incentive Units, the number of Incentive Units that are not Vested Incentive Units.
Vested Incentive Units. The term “Vested Incentive Units” means, with respect to Participant’s Incentive Units, the number of such Incentive Units that are vested as determined in accordance with Schedule A.
Exhibit I-3
Exhibit II
Representations and Warranties
1. Incentive Units Unregistered. Participant acknowledges and represents that Participant has been advised by Partnership that:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN AN INCENTIVE UNIT AWARD AGREEMENT WITH THE ISSUER, AS AMENDED AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE ISSUER’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE”; and
2. Additional Investment Representations. Participant represents and warrants that:
Exhibit II-1
3. Other Representations. Participant acknowledges that Sponsor and its Affiliates may, from time to time, provide services to Parent and its Affiliates for which a fee will be paid by Parent or its Affiliates, including an annual monitoring/advisory fee and/or transaction fees.
Exhibit II-2
Exhibit III
FORM OF SECTION 83(b) ELECTION
ELECTION TO INCLUDE UNITS IN GROSS
INCOME PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE
The undersigned acquired units (the “Units”) of Buzz Management Aggregator L.P. (the “Partnership”) on November 2, 2020 (the “Acquisition Date”).
The undersigned desires to make an election to have the Units taxed under the provision of Section 83(b) of the Internal Revenue Code of 1986, as amended (“Code §83(b)”), at the time the undersigned acquired the Units.
Therefore, pursuant to Code §83(b) and Treasury Regulation §1.83-2 promulgated thereunder, the undersigned hereby makes an election, with respect to the Units (described below), to report as taxable income for calendar year 2020 the excess, if any, of the Units’ fair market value on the Acquisition Date over the acquisition price thereof.
The following information is supplied in accordance with Treasury Regulation §1.83-2(e):
The name, address and social security number of the undersigned:
Laura Franco |
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[address] |
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SSN: | [SSN] |
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A description of the property with respect to which the election is being made:
7,495,989.00 Class B Units in Partnership
The date on which the property was transferred: the Acquisition Date. The taxable year for which such election is made: calendar year 2020.
The restrictions to which the property is subject include the following: If the undersigned ceases to be employed by or provide services to Parent or certain affiliates of Parent under certain circumstances, all or a portion of the Units may be subject to forfeiture. The Units are also subject to transfer restrictions.
The aggregate fair market value (on a liquidation basis) on the Acquisition Date of the property with respect to which the election is being made, determined without regard to any lapse restrictions: $0
The aggregate amount paid for such property: $0
The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files his or her annual income tax return not later than 30 days after the date of the transfer of the property. A copy of the election will also be furnished to the person for whom the services were performed. The undersigned is the person performing the services in connection with which the property was transferred.
A copy of this election has been furnished to Partnership and Parent pursuant to Treasury Regulations §1.83-2(e)(7).
Dated: | Nov | 16, 2020 |
| /s/ Laura Franco |
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| Laura Franco |
Exhibit II-1
Appendix A
RESTRICTIVE COVENANTS
A-1
A-2
A-3
A-4
A-5
A-6
Schedule A-1
Prior Works
The following is a list of all Prior Works that are owned by Participant, in whole or jointly with others prior to Participant’s employment with the Company Group:
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Except as indicated above on this List (and on any supporting sheets as indicated below), Participant has no Prior Works to disclose pursuant to this Agreement.
Please send any supporting sheets to hrlondon@magiclab.co.
PARTICIPANT | ||
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/s/ Laura Franco | ||
Laura Franco | ||
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Date: |
| Nov 16, 2020 |
A-1