Amended And Restated Limited Liability Company Agreement

Exhibit 10.27


EXECUTION COPY


FRIESS ASSOCIATES, LLC


AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT


DATED AS OF AUGUST 28, 2001


TABLE OF CONTENTS


Page


ARTICLE I - DEFINITIONS......................................................2


Section 1.1. Definitions.............................................2


ARTICLE II - ORGANIZATION AND GENERAL PROVISIONS............................20


Section 2.1. Continuation...........................................20
Section 2.2. Name...................................................21
Section 2.3. Term...................................................21
Section 2.4. Registered Agent and Registered Office.................21
Section 2.5. Principal Place of Business............................21
Section 2.6. Qualification in Other Jurisdictions...................21
Section 2.7. Purposes and Powers....................................21
Section 2.8. Title to Property......................................23


ARTICLE III - MANAGEMENT OF THE LLC.........................................23


Section 3.1. Management in General..................................23
Section 3.2. Management Committee of the LLC........................24
Section 3.3. Officers of the LLC....................................26
Section 3.4. Employees of the LLC...................................30
Section 3.5. Operation of the Business of the LLC...................31
Section 3.6. Compensation and Expenses of the Members...............39
Section 3.7. Other Business of the Manager Member and its
Affiliates............................................40
Section 3.8. Non-Manager Members and Non-Solicitation Agreements....40
Section 3.9. Non-Solicitation and Non-Disclosure by Non-Manager
Members and Employee Stockholders.....................41
Section 3.10. Remedies Upon Breach...................................45
Section 3.11. Purchase Provisions....................................46
Section 3.12. No Employment Obligation...............................57
Section 3.13. Capitalization of Excess Operating Cash Flow...........57
Section 3.14. Miscellaneous..........................................57


ARTICLE IV - CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS AND ALLOCATIONS;
DISTRIBUTIONS.........................................................58


Section 4.1. Capital Contributions..................................58
Section 4.2. Capital Accounts; Allocations..........................58
Section 4.3. Distributions..........................................63
Section 4.4. Distributions Upon Dissolution; Establishment of a
Reserve Upon Dissolution..............................64
Section 4.5. Proceeds from Capital Contributions and the Sale of
Securities; Insurance Proceeds; Certain Special
Allocations...........................................65


(i)


Page


Section 4.6. Tax Allocations........................................68
Section 4.7. Other Allocation Provisions............................68
Section 4.8. Withholding............................................68


ARTICLE V - TRANSFER OF LLC INTERESTS BY NON-MANAGER MEMBERS; RESIGNATION,
REDEMPTION AND WITHDRAWAL BY NON-MANAGER MEMBERS; ADMISSION OF
ADDITIONAL NON-MANAGER MEMBERS........................................68


Section 5.1. Transferability of Interests...........................68
Section 5.2. Substitute Non-Manager Members.........................71
Section 5.3. Allocation of Distributions Between Transferor and
Transferee; Successor to Capital Accounts.............72
Section 5.4. Resignation, Redemptions and Withdrawals...............72
Section 5.5. Issuance of Additional LLC Interests...................72
Section 5.6. Additional Requirements for Transfer or for Issuance...74
Section 5.7. Registration of LLC Interests..........................74
Section 5.8. Representation of Members..............................75
Section 5.9. Conversion of LLC Points...............................75
Section 5.10. Purchase Program Points................................76


ARTICLE VI - TRANSFER OF LLC INTERESTS BY THE MANAGER MEMBER; REDEMPTION,
REMOVAL AND WITHDRAWAL................................................77


Section 6.1. Transferability of Interest............................77
Section 6.2. Resignation, Redemption, and Withdrawal................79


ARTICLE VII - PUT OF LLC INTERESTS..........................................79


Section 7.1. Non-Manager Member Puts................................79


ARTICLE VIII - DISSOLUTION AND TERMINATION..................................85


Section 8.1. No Dissolution.........................................85
Section 8.2. Events of Dissolution..................................85
Section 8.3. Notice of Dissolution..................................86
Section 8.4. Liquidation............................................86
Section 8.5. Termination............................................86
Section 8.6. Claims of the Members..................................86


ARTICLE IX - RECORDS AND REPORTS............................................86


Section 9.1. Books and Records......................................86
Section 9.2. Accounting.............................................87
Section 9.3. Financial and Compliance Reports.......................87
Section 9.4. Meetings...............................................88
Section 9.5. Tax Matters............................................88


ARTICLE X - LIABILITY, EXCULPATION AND INDEMNIFICATION......................89


(ii)


Page


Section 10.1. Liability.............................................89
Section 10.2. Exculpation...........................................89
Section 10.3. Fiduciary Duty........................................89
Section 10.4. Indemnification.......................................90
Section 10.5. Notice; Opportunity to Defend and Expenses............90
Section 10.6. Miscellaneous.........................................91


ARTICLE XI - MISCELLANEOUS..................................................92


Section 11.1. Notices...............................................92
Section 11.2. Successors and Assigns................................92
Section 11.3. Amendments............................................92
Section 11.4. No Partition..........................................93
Section 11.5. No Waiver; Cumulative Remedies........................93
Section 11.6. Dispute Resolution....................................93
Section 11.7. Prior Agreements Superseded...........................94
Section 11.8. Captions..............................................94
Section 11.9. Counterparts..........................................94
Section 11.10. Applicable Law; Jurisdiction..........................94
Section 11.11. Interpretation........................................94
Section 11.12. Severability..........................................94
Section 11.13. Creditors.............................................95
Section 11.14. References to this Agreement..........................95
Section 11.15. Exhibits, Schedules and Annexes.......................95
Section 11.16. Additional Documents and Acts.........................95
Section 11.17. Managers..............................................95
Section 11.18. Guaranty of AMG.......................................96


EXHIBITS


Exhibit A - Equity Purchase Program Exhibit B - Form of Non-Solicitation Agreement Exhibit C - Form of Promissory Note for Purchases Exhibit D - Form of Make-Whole Agreement


SCHEDULES


Schedule A - LLC Points and Capital Contributions Schedule B - Designated Initial Member Matters Schedule C - Model Purchase Calculation


(iii)


FRIESS ASSOCIATES, LLC


AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT


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This Amended and Restated Limited Liability Company Agreement (the "Agreement") of Friess Associates, LLC (the "LLC" or the "Company") is made and entered into as of August 28, 2001, to become effective as of (and subject to the occurrence of) the Effective Time (as defined herein), by and among the Persons identified as the Manager Member and the Non-Manager Members on SCHEDULE A attached hereto as members of the LLC, and any Persons who may become members of the LLC in the future in accordance with the provisions hereof.


WHEREAS, a limited liability company has been formed pursuant to the Delaware Limited Liability Company Act, 6 DEL. C ss.18-101, ET SEQ., as it may be amended from time to time and any successor to such Act (the "Act"), by filing a Certificate of Formation of the LLC with the office of the Secretary of State of the State of Delaware on May 1, 2001, and entering into a Limited Liability Company Agreement of the LLC, dated as of June 1, 2001; and


WHEREAS, pursuant to the Purchase Agreement, AMG has agreed, in each case on the terms and subject to the conditions set forth in the Purchase Agreement, to cause FA (WY) Acquisition Company, Inc. ("FA (WY) Acquisition") to purchase (i) from Friess Associates, Inc. ("FAI") (A) at the Closing, all of the LLC Interests owned by FAI, other than those LLC Points to be held by FAI as of immediately following the Effective Time (including the Preferred Capital Account Balance associated with such retained LLC Points as of immediately following the Effective Time) as set forth on SCHEDULE A hereto, and (B) at the Subsequent Closing, certain additional LLC Points owned by FAI, and (ii) from each of The Community Foundation of Jackson Hole and NCCF Support Inc. (each a "Charity") at the Closing, all of the LLC Interests owned by such Charity; and


WHEREAS, pursuant to the Management Owner Purchase Agreement, AMG has agreed, on the terms and subject to the conditions set forth in the Management Owner Purchase Agreement, to cause FA (WY) Acquisition to purchase from the Management Owners (other than Foster Friess) at the Closing all of the LLC Interests owned by such Management Owners; and


WHEREAS, the Members desire to continue the LLC as a limited liability company under the Act and to amend and restate the Limited Liability Company Agreement of the LLC, dated as of June 1, 2001, in its entirety as herein set forth, such amendment and restatement to become effective as of, and subject to the occurrence of, the Effective Time; and


WHEREAS, prior to the Effective Time and pursuant to the Purchase Agreement, the LLC will enter into a services agreement with the DE LLC (the "Services Agreement") pursuant to which, from and after the Effective Time, the DE LLC will perform various sub-advisory, sub-administrative and other investment management-related services for the LLC (all as more fully described in the Services Agreement) and be compensated for said services from and after the Effective Time in the manner provided for in the Services Agreement.


NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in consideration of the mutual covenants hereinafter set forth, the parties hereby agree as follows:


ARTICLE I - DEFINITIONS.


SECTION 1.1. DEFINITIONS. Unless the context otherwise requires, the terms defined in this Article I shall, for the purposes of this Agreement, have the meanings herein specified.


"1940 ACT" shall mean the Investment Company Act of 1940, as it may be amended from time to time, and any successor to such act.


"ACT" shall have the meaning specified in the recitals hereto.


"ADDITIONAL NON-MANAGER MEMBERS" shall have the meaning specified in Section 5.5 hereof.


"ADVISERS ACT" shall mean the Investment Advisers Act of 1940, as it may be amended from time to time, and any successor to such act.


"AFFILIATE" shall mean, with respect to any person or entity (herein the "first party"), any other person or entity that directly or indirectly controls, or is controlled by, or is under common control with, such first party. The term "control" as used herein (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to (a) vote twenty-five percent (25%) or more of the outstanding voting securities of such person or entity, or (b) otherwise direct the management or policies of such person or entity by contract or otherwise. For purposes of this Agreement, the LLC is not an Affiliate of any Member; provided, however, that the LLC and the DE LLC shall be deemed Affiliates of each other for purposes of this Agreement. For purposes of this Agreement, FAI and FAID shall at all times be deemed Affiliates of each other and of Foster Friess.


"AGREEMENT" shall have the meaning specified in the preamble hereto.


"AMG" shall mean Affiliated Managers Group, Inc., a Delaware corporation, and any successors or assigns thereof.


"AMG SHARES" shall mean shares of AMG's common stock, par value $.01 per share.


"APPLICABLE AGGREGATE NON-MANAGER MEMBER ALLOCATION PERCENTAGE" shall mean, as of the date of any transaction described in Section 4.2(e) hereof, the quotient (expressed as a percentage) obtained by dividing (i) the aggregate number of Vested LLC Points held by the Non-Manager Members (other than FAI) as of the date of such transaction by (ii) the number of Vested LLC Points outstanding as of the date of such transaction.


"APPLICABLE CASH FLOW" shall have the meaning specified in Section 3.11(c)(i)(B) hereof.


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"APPLICABLE MANAGER MEMBER ALLOCATION PERCENTAGE" shall mean, as of the date of any transaction described in Section 4.2(e) hereof, the quotient (expressed as a percentage) obtained by dividing (i) the aggregate number of Vested LLC Points held by the Manager Member and its Affiliates as of the date of such transaction by (ii) the number of Vested LLC Points outstanding as of the date of such transaction.


"APPLICABLE FAI ALLOCATION PERCENTAGE" shall mean, as of the date of any transaction described in Section 4.2(e) hereof, the quotient (expressed as a percentage) obtained by dividing (i) the number of Vested LLC Points held by FAI as of the date of such transaction by (ii) the number of Vested LLC Points outstanding as of the date of such transaction.


"APPLICABLE NEW INVESTED FUNDS" shall mean the one hundred and fifty five million dollars ($155,000,000) newly invested by FAI, FAID, Foster Friess and Lynnette Friess at the Effective Time in registered investment companies sponsored and managed by the LLC pursuant to Section 1.6(b) of the Purchase Agreement, together with all appreciation/depreciation, capital gains/losses, dividends, interest and other earnings thereon from and after the Effective Time (other than any "Tax Withdrawals" (as defined in the Purchase Agreement)).


"APPLICABLE SERIES A AGGREGATE NON-MANAGER MEMBER ALLOCATION PERCENTAGE" shall mean, as of the date of any transaction described in Section 4.2(e) hereof, the quotient (expressed as a percentage) obtained by dividing (i) the aggregate number of Vested Series A LLC Points held by the Non-Manager Members holding Series A LLC Points (other than FAI) as of the date of such transaction by (ii) the number of Vested LLC Points outstanding as of the date of such transaction.


"ASSERTED LIABILITY" shall have the meaning specified in Section 10.5(a) hereof.


"AVERAGE AMG STOCK PRICE" shall have the meaning specified in Section 7.1(i) hereof.


"BASE OWNERS' ALLOCATION" shall mean, for any period, the Owners' Allocation for that period minus the Performance Owners' Allocation for that period (determined on an accrual basis in accordance with GAAP consistently applied); PROVIDED, HOWEVER, that, for purposes of all calculations and valuations required to be performed pursuant to (i) Section 3.11 hereof, (ii) Section 7.1 hereof, (iii) any "Put Option Agreements" (or similar agreements) entered into between the Manager Member and any Employee Stockholder or Non-Manager Member, or (iv) any "Make-Whole Bonus Agreements" (or similar agreements) entered into between the Manager Member and any Employee Stockholder or Non-Manager Member, the "Base Owners' Allocation" shall be adjusted downward to exclude in all respects any revenues derived by the LLC, the DE LLC or any of their respective Controlled Affiliates from management of Applicable New Invested Funds during all applicable periods (and, for the avoidance of doubt, all purchase prices and other payments made pursuant to any such section of this Agreement or other agreement shall thereby be reduced by virtue of the exclusion of such revenues derived from management of Applicable New Invested Funds).


"CAPITAL ACCOUNT" shall mean the capital account maintained by the LLC with respect to each Member in accordance with the capital accounting rules described in Section 4.2 hereof.


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"CAPITAL CONTRIBUTION" shall mean, as to each Member, the amount of money and/or the agreed fair market value of any property (net of any liabilities encumbering such property that the LLC is considered to assume or take subject to) contributed to the capital of the LLC by such Member.


"CARRYING VALUE" shall mean, with respect to any LLC asset, the asset's adjusted basis for federal income tax purposes, except that the Carrying Values of all LLC assets shall be adjusted to equal their respective Fair Market Values in accordance with the rules set forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(f), except as otherwise provided herein, immediately prior to: (a) the date of the acquisition of any additional LLC Interest by any new or existing Member in exchange for more than a de minimis Capital Contribution; (b) the date of the distribution of more than a de minimis amount of LLC property (other than a pro rata distribution) to a Member; or (c) the date of the termination of the LLC under Section 708(b)(1)(B) of the Code, provided that adjustments pursuant to clauses (a) and (b) above shall be made only if the Manager Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members. The Carrying Value of any LLC asset distributed to any Member shall be adjusted immediately prior to such distribution to equal its Fair Market Value.


"CEO" shall have the meaning specified in Section 3.3 hereof.


"CERTIFICATE" shall mean the Certificate of Formation of the LLC filed under the Act, as the same may be amended and/or restated from time to time in accordance with the terms hereof.


"CHARITY" shall have the meaning specified in the recitals hereto.


"CLAIMS NOTICE" shall have the meaning specified in Section 10.5(a) hereof.


"CLIENT" shall mean all Past Clients, Present Clients and Potential Clients, subject to the following general rules: (i) with respect to each Client, the term shall also include any Persons which are known to the Employee Stockholder to be Affiliates of such Client, directors, officers or employees of such Client or any such Affiliates thereof, or Persons who are members of the Immediate Family of any of the foregoing Persons or Affiliates of any of them; (ii) with respect to any Client that is a collective investment vehicle (provided that, for the avoidance of doubt, a 401(k) retirement plan shall not itself be considered a "collective investment vehicle" except to the extent a particular Employee Stockholder or Non-Manager Member (as applicable) has actual knowledge of the identities of investors therein), the term shall also include any investor or participant in such Client (provided that, in the case of any collective investment vehicle that is a registered investment company, an investor or participant therein shall not be deemed a "Client" hereunder unless such investor or participant has in the aggregate at least $500,000 under management by the LLC and its Controlled Affiliates (whether through investments in registered investment companies or otherwise)); and (iii) with respect to any Client that is a trust or similar entity, the term shall include the settlor and each of the beneficiaries of such Client and the Affiliates and Immediate Family members of any such Persons.


"CLOSING" shall have the meaning specified in the Purchase Agreement.


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"CODE" OR "INTERNAL REVENUE CODE" shall mean the United States Internal Revenue Code of 1986, as from time to time amended, and any successor thereto, together with all regulations promulgated thereunder.


"COMMITTEE VOTE" shall have the meaning specified in Section 3.2(b)(iv) hereof.


"COMPANY" shall have the meaning specified in the preamble hereto.


"CONSENTING PERCENTAGE" shall have the meaning specified in the Purchase Agreement (PROVIDED, HOWEVER, that, solely for purposes of the use of such term in this Agreement and any "Put Option Agreements" (or similar agreements) entered into between the Manager Member and any Employee Stockholder or Non-Manager Member, the Consenting Percentage shall be recalculated as of the Closing True-Up Date (as defined in the Purchase Agreement) to take into account any increase thereto resulting from the inclusion of any Applicable Excluded Contracts as of such date).


"CONTINGENT CONSIDERATION" shall mean, with respect to the Manager Member's (or its assignee's) purchase of LLC Points pursuant to Section 3.11 or Section 7.1 (as applicable), an obligation on the part of the Manager Member (or its successor or assigns) to pay to the Selling Member (or its successors or assigns) on the Liquidation Date, an amount equal to the lesser of:


(i) the portion of the Purchase Price indicated in Section
3.11(f)(i)(D), Section 3.11(f)(ii), Section 3.11(f)(iii)(B) or Section
7.1(f)(ii)(B), as applicable; or


(ii) the amount calculated in clause (i) of this definition,
multiplied by a fraction, (A) the numerator of which is the Applicable
Cash Flow measured for the twenty-four (24) months (in the case of Base
Owners' Allocation), or the thirty-six (36) months (in the case of Earned
Performance Owners' Allocation), ending on the last day of the most
recently completed calendar quarter prior to the Liquidation Date, and (B)
the denominator of which is the Applicable Cash Flow measured for the
twenty-four (24) months (in the case of Base Owners' Allocation), or the
thirty-six (36) months (in the case of Earned Performance Owners'
Allocation), ending on the last day of the calendar quarter in which the
termination of the Selling Member's (or its related Employee
Stockholder's, as applicable) employment with the LLC occurred.


Notwithstanding any provision of this Agreement to the contrary (including, without limitation, the provision of Section 3.11(f) hereof), the Manager Member may (without the need for any vote or consent of any Member or Members) assign and delegate its obligation to pay the Contingent Consideration (including, by way of example and not of limitation, to a transferee of LLC Interests pursuant to Section 6.1(a)).


In the event that a change is made in the definition of Applicable Cash Flow following the date on which a Contingent Consideration obligation initially is outstanding, an appropriate adjustment will be made to that Contingent Consideration obligation to give effect to that change in definition. Such an adjustment will be made by the Manager Member in its sole discretion, and such adjustment will be binding on all parties absent a mathematical error. The Manager


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Member will notify all persons who owe or are owed Contingent Consideration of any such adjustment.


"CONTROLLED AFFILIATE" shall mean, with respect to a Person, any Affiliate of such Person with respect to which such Person possesses (directly or indirectly) the power to direct the management or relevant policies of such Affiliate (by ownership of voting securities, by contract or otherwise); PROVIDED, HOWEVER, that no bona fide collective investment vehicle in which at least a majority in interest of the economic interests are held by third parties shall be deemed a Controlled Affiliate of the LLC. For the avoidance of doubt, the DE LLC shall not be deemed a Controlled Affiliate of the LLC.


"CONVERT" shall have the meaning specified in Section 5.9, hereof, and "Conversion" shall have the corresponding meaning.


"COVERED PERSON" shall mean a Member, any Affiliate of a Member, any officer, director, shareholder, partner, employee or member of a Member or any of its Affiliates, any member of the Management Committee or any Officer.


"DE LLC" shall mean Friess Associates of Delaware, LLC, a Delaware limited liability company.


"DE LLC AGREEMENT" shall mean the Amended and Restated Limited Liability Company Agreement of the DE LLC of even date herewith, as the same may be amended from time to time in accordance with the terms thereof.


"DE LLC INTEREST" shall have the meaning specified in the DE LLC Agreement.


"DE LLC MANAGER MEMBER" shall mean the "Manager Member" of the DE LLC, as such term is defined in the DE LLC Agreement.


"DE LLC POINTS" shall have the meaning specified in the DE LLC Agreement.


"DESIGNATED INITIAL MEMBER" shall mean each of FAI, William D'Alonzo, John Ragard and Jon Fenn.


"EARNED PERFORMANCE OWNERS' ALLOCATION" shall mean, with respect to a calendar quarter in which any fees or other payments falling within the definition of Performance Owners' Allocation have been definitively allocated to or earned by the LLC and are no longer subject to any offset, reduction or return, an amount equal to such definitively allocated or earned Performance Owners' Allocation.


"EFFECTIVE TIME" shall mean the time of the Closing under the Purchase Agreement.


"ELIGIBLE PERSON" shall have the meaning specified in Section 3.2(b)(i) hereof.


"EMPLOYEE STOCKHOLDER" shall mean (a) in the case of any Non-Manager Member which is a natural person, such Non-Manager Member, and (b) in the case of any Non-Manager Member which is not a natural person, that certain employee of the LLC or the DE LLC who is


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the settlor of or the owner of issued and ...