This clause provides for the buy-out of the shares of departing shareholder-managers with a different pricing mechanism depending on the reasons for departure.
If a manager’s management contract is terminated for gross misconduct, or if he or she resigns, for example, the manager will be considered a “bad leaver” and will be sanctioned by receiving a lower amount for his or her shares. On the other hand, if he/she retires, dies or is dismissed without having committed serious or gross misconduct, he/she will be considered a “good leaver” and will be rewarded.
Each company can decide what is a good leaver and what is a bad leaver and how share buy-back prices are set.
