eTrade 2000 Annual Report Download - page 236

9.6 . Substitute Members. No transferee of a Member’ s interest may be admitted to the Company as a substitute Member without the
consent of the Managing Members, which consent shall be subject to the sole discretion of the Managing Members and shall not be
subject to challenge by any transferor or transferee.
ARTICLE X
VESTING OF PERCENTAGE INTERESTS
10.1. Vesting of Managing Members’ and E*Trade’s Interests. The Managing Members’ and E*Trade’ s interests in the Company
shall be one hundred percent(100%) vested as of the date hereof.
10.2 . Vesting of Other Non-Managing Members’ and Additional Members’ Interests. The interest in the Company of any
Non-Managing Member (other than E*Trade) and of any Additional Member shall vest in accordance with a vesting schedule (if any)
established by the Managing Members for such other Non-Managing Member or Additional Member. Any amounts allocated
Non-Managing Members or Additional Members that, for any reason, do not vest shall revert to the Members whose interest in such
amounts were diluted by the original allocation of such amounts to such Non-Managing Member or Additional Member.
ARTICLE XI
DISSOLUTION AND LIQUIDATION OF THE COMPANY
11.1. Liquidation Procedures. Upon termination of the Company in accordance with ArticleII:
(a)The affairs of the Company shall be wound up and the Company shall be dissolved. The Managing Members shall serve as the
liquidators.
(b)Distributions in dissolution may be made in cash or in kind or partly in cash and partly in kind.
(c)The Managing Members shall use their best judgment as to the most advantageous time for the Company to sell investments or to
make distributions in kind provided that any such sales shall be made as promptly as is consistent with obtaining the fair value thereof.
(d)The proceeds of dissolution shall be applied to payment of liabilities of the Company and distributed to the Members in the
following order:
(1)to the creditors of the Company in the order of priority established by law;
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(2)to the Members, in respect of the positive balances in their Capital Accounts, after all Net Income or Net Loss arising upon the
liquidation (including amounts arising in connection with a distribution of Securities) has been allocated among the Members.
ARTICLE XII
FINANCIAL ACCOUNTING AND REPORTS
12.1. Tax Accounting and Reports. TheManaging Members shall cause the Company’ s tax return and IRS Form 1065, Schedule
K-1, to be prepared and delivered in a timely manner to the Non-Managing Members (but in no event later than ninety(90) days after
the close of each of the Company’ s Fiscal Years).
12.2. Valuation of Securities and Other Assets Owned by the Company.
(a)Subject to the specific standards set forth below, the valuation of Securities and other assets and liabilities under this Agreement
shall be at fair market value. In determining the value of the interest of any Member or in any accounting between the Members, no
value shall be placed on the goodwill or the name of the Company. Upon dissolution of the Company, the Company’ s name and any
goodwill associated with the name shall be distributed to E*Trade.
(b)The following criteria shall be used for determining the fair market value of Securities.
(1)Securities not subject to investment letter or other similar restrictions on free marketability:
(A)If traded on one(1) or more securities exchanges ortraded on NASDAQ, the value of each Security shall be deemed to be the
Security’ s closing price as reported in the Wall Street Journal or another nationally recognized publication or service that reports such
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