eTrade 2000 Annual Report Download - page 234

giving effect to the related party rules of Code Sections267(a)(1) and 707(b)).
6.3. Allocation of Net Income or Loss.
(a)All Net Income or Loss of the Company attributable to the Company’ s investment in the Fund shall be allocated among the
Members in proportion to their Capital Contributions used to fund such investment.
(b)All Net Income or Loss attributable to the Company’ s Carry shall be allocated among the Members in proportion to their
Percentage Interests; provided that the Managing Members may, in their discretion, determine to allocate up to twenty percent(20%) of
E*Trade’ s allocable share of the Net Income attributable to the Carry realized in a particular year to other Members. The Managing
Members shall make any determination to make such an allocation within two(2) months after the end of each Fiscal Year.
(c)Any Net Income attributable to the Company’ s operations shall be allocated among the Members previously allocated any
cumulative Net Loss attributable to the Company’ s operations in the reverse order of, and in proportion to, such previous allocations,
with any such remaining Net Income being allocated entirely to E*Trade. Any Net Loss attributable to the Company’ s operations shall
be allocated entirely to E*Trade to the extent of the sum of any cumulative Net Income previously allocated to E*Trade and any
Capital Contributions made by E*Trade to fund such Net Losses pursuant to Paragraph5.1(c), with any such remaining Net Loss being
allocated among the Members in proportion to their Capital Contributions (other than pursuant to Paragraph5.1(c)). For this purpose,
Net Income or Loss attributable to the Company’ s operations shall mean the Management Fee received by the Company reduced by all
expenses of the Company other than expenses directly attributable to the Company’ s investment in the Fund or the Company’ s Carry,
as determined by the Managing Members, in their discretion. Notwithstanding the foregoing, if there is a change in control of E*Trade,
the Managing Members may, in their discretion, allocate any Net Income attributable to the Company’ s operations among the
Members in the manner they deem appropriate.
ARTICLE VII
EXPENSES
The Company will pay all costs and expenses incurred in connection with its activities. The Members shall be entitled to
reimbursement by the Company for expenses incurred by them relating to the Company’ s business, as determined by the Managing
Members in their discretion.
ARTICLE VIII
DISTRIBUTIONS
8.1. Interest. No interest shall be paid to any Member on account of his interest in the capital of, or on account of his investment in,
the Company.
8.2. Mandatory Distributions. Promptly upon receipt of any tax distributions from the Fund, the Managing Members shall distribute
such tax distributions to the Members in proportion to their interests in the taxable income of the Company for the period to which
such distributions relate.
8.3. Discretionary Distributions. The Managing Members may in their discretion make additional distributions of cash or Securities
among the Members (not including any Defaulting Members).
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(a)The distribution pursuant to this Paragraph8.3 shall be made among the Members as follows (with the source of a particular
distribution being in the discretion of the Managing Members):
(1)To E*Trade or other Members allocated Net Income pursuant to Paragraph6.3(c), to the extent of and in proportion to their
respective shares of the cumulative amount of such undistributed Net Income allocated to them, to the extent attributable to any excess
of the Management Fee received over the Company’ s operating expenses (taking into account as current or projected expenses any
payments of compensation to the Managing Members for their management of the Company if they are no longer employed by
E*Trade).
(2)Among the Members in proportion to their respective shares of the cumulative amount of undistributed Net Income attributable to
the Company’ s Carry to the extent made from such undistributed Net Income.
(3)Among the Members in proportion to their respective shares of the cumulative amount of undistributed Net Income attributable to
2002. EDGAR Online, Inc.