eTrade 2000 Annual Report Download - page 233

provisions:
The Capital Account of each Member shall be increased by:
(1)the amount of money and the fair market value of any property contributed to the Company by such Member (in the case of a
contribution of property, net of any liabilities secured by such property that the Company is considered to assume or hold subject to for
purposes of Section752 of the Code),
(2)such Member’ s share of Net Income (or items thereof) allocated to his Capital Account pursuant to this Agreement, and
(3)any other amounts required by Treasury Regulation Section1.704-1(b), provided the Managing Member determines that such
increase is consistent with the economic arrangement among the Members as expressed in this Agreement.
and shall be decreased by:
(A)the amount of money and the fair market value of any property distributed by the Company (determined pursuant to Paragraph12.2
hereof as of the date of distribution) to such Member pursuant to the provisions of this Agreement (net of any liabilities secured by
such property that such Member is considered to assume or hold subject to for purposes of Section752 of the Code),
(B)such Member’ s share of or Net Loss (or items thereof) allocated to his Capital Account pursuant to this Agreement, and
(C)any other amounts required by Treasury Regulation Section1.704-1(b), provided the Managing Member determines that such
decrease is consistent with the economic arrangement among the Members as expressed in this Agreement.
(c) Fiscal Quarter . The Fiscal Quarters of the Company shall begin on Januaryl, April1, July1 and October1, and end on March31,
June30, September30 and December31, respectively, except that the Company’ s first Fiscal Quarter shall begin on the date of this
Agreement and end on the next regular quarterend.
(d) Fiscal Year . The Company’ s first Fiscal Year shall begin on the date of this Agreement and end on December31, 2000. Thereafter,
the Company’ s Fiscal Year shall commence on January1 of each year and end on December31 of such yearor, if earlier, the date the
Company terminated during such year. The Managing Members may at any time elect a different Fiscal Year if permitted by the Code
and the applicable Treasury Regulations.
(e) Net Income and Net Loss . The net book income or loss of the Company for any relevant period, as computed in accordance with
federal income tax principles and as adjusted pursuant to the following provisions, under the method of accounting elected by the
Company for federal income tax purposes. The Net Income or Loss of the Company shall be computed, interalia , by:
(1)including as income or deductions, as appropriate, any tax-exempt income and related expenses that are neither properly included in
the computation of taxable income nor capitalized for federal income tax purposes;
(2)including as a deduction when paid or incurred (depending on the Company’ s method of accounting) any amounts utilized to
organize the Company or to promote the sale of (or to sell) an interest in the Company, except that amounts for which an election is
properly made by the Company under Section709(b) of the Code shall be accounted for as provided therein;
(3)including as a deduction any losses incurred by the Company in connection with the sale or exchange of property notwithstanding
that such losses may be disallowed to the Company for federal income tax purposes under the related party rules of Code
Section267(a)(1) or 707(b); and
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(4)calculating the gain or loss on disposition of Company assets and the depreciation, amortization or other cost recovery deductions,
if any, with respect to the Company’ s assets by reference to their Book Value rather than their adjusted tax basis.
(f) Percentage Interest . The Percentage Interest for each Member shall generally be as set forth on Exhibit A, as it may be amended
from time to time. The sum of the Members’ Percentage Interests shall be one hundred percent(100%).
(g) Sale or Exchange . A sale, exchange, liquidation or similar transaction, event or condition with respect to any assets (except
realizations of purchase discounts on commercial paper, certificates of deposit or other money-market instruments) of the Company of
the type that would cause any realized gain or loss to be recognized for income tax purposes under the Code (as determined without
2002. EDGAR Online, Inc.