Cause and good reason references

Think about whether death and disabilty belong in the good reason category, which probably depends on what happens based on these outcomes. Think again about the table.

1.	Termination for “Cause” refers to termination because a Manager (1) abandons, ceases, or voluntarily terminates the Manager’s services for any reason other than Good Reason; (2) is convicted of, or enters a plea of guilty or nolo contendere to, a crime that (A) is punishable by a custodial penalty in excess of one year, instead of or in addition to a fine or other noncustodial penalty, (B) is related to the Manager’s services, or (C) involves dishonesty, theft, or fraud; (3) is negligent, is reckless, or engages in intentional misconduct that results in a material adverse effect on the business or the reputation of the Company or any of its subsidiaries or other affiliates; (4) fails to perform the Manager’s duties to the Company or to any of its subsidiaries, after the Company has provided written notice of such failure; (5) engages in intentional misconduct, misfeasance, or malfeasance of duty causing a violation of any law that is detrimental to the Company or its subsidiaries or other affiliates; (6) breaches a duty owed to the Company or its subsidiaries or other affiliates, which breach is materially detrimental to the Company; or (7) breaches any of the provisions of the Operating Agreement to the detriment of the Company; provided, however, that in the case of items (3) – (7), “Cause” will not exist if the breach, failure, misconduct, misfeasance, malfeasance, or other action is capable of being cured and is cured within ten (10) business days after the Company provides the Manager with written notice of such alleged breach, failure, misconduct, misfeasance, malfeasance, or other action (which notice must contain a reasonably specific description of the facts supporting the allegation).
2.	Termination for “Good Reason” refers to (1) death, (2) disability, (3) a reduction in the Manager’s duties, responsibilities or authority without the Manager’s consent and in a manner that is inconsistent with the Manager’s role as a Manager, (4) a change in Manager’s title without the Manager’s consent; or (5) the Company’s material and unreasonably frequent or persistent breach of its obligations timely to make payments to the Manager that are required by this Agreement or of any additional compensation obligations that it undertakes in favor of the Manager; there shall not be Good Reason for the Manager’s termination of his employment unless and until the Executive gives the Company written notice in a non-conclusory manner of the circumstances constituting the applicable Good Reason within ninety (90) days of the last occurring circumstance of such event and the Company fails to cure such circumstances within thirty (30) days of receipt of such notice.



ALSO
IRS definition of good reason termination from 409A regs:


For the purposes of the safe harbor, a good reason condition may consist of one or more of the following conditions arising without the consent of the employee:
	•	A material diminution in the employee's base compensation;
	•	A material diminution in the employee's authority, duties, or responsibilities;
	•	A material diminution in the authority, duties, or responsibilities of the supervisor to whom the employee is required to report, including requirements that an employee report to a corporate officer or employee instead of reporting directly to the board of directors of a corporation (or similar entity, as applicable);
	•	A material diminution in the budget over which the employee retains authority;
	•	A material change in the geographic location at which the employee must perform the services; or
	•	Any other action or inaction that constitutes a material breach of the terms of an applicable employment agreement.