The Kentucky Clawback Guaranty, also known as the Kentucky Clawback Provision, is a legal concept that is primarily related to economic development projects and financial incentives provided by the state of Kentucky. This provision is designed to protect the state's investment and ensure that the promised economic benefits and job creation materialize. Under the Kentucky Clawback Guaranty, businesses or individuals who receive financial incentives or tax breaks must meet certain performance targets, such as job creation, capital investment, or other benchmarks outlined in the agreement. If they fail to meet these targets over a specified period, the state can "claw back" or recoup a portion or all of the provided incentives or tax credits. This guaranty acts as a safeguard for the state, assuring that public funds are effectively utilized and encouraging accountability from businesses or individuals that receive state assistance. It ensures that the promised economic benefits are delivered, or else the state can recover the financial assistance or tax incentives. There are a few types of Kentucky Clawback Guaranty commonly seen: 1. Job Creation Clawback: This type of clawback focuses on the number of new jobs created by the recipient. If the business fails to generate the required number of new jobs within the specified timeframe, the state can demand reimbursement or impose penalties. 2. Capital Investment Clawback: This clawback is related to the amount of capital investment made by the recipient. If the agreed-upon investment is not fulfilled, the state has the right to claw back a portion or all of the financial incentives provided. 3. Performance-based Incentives Clawback: In certain cases, the Kentucky Clawback Guaranty can be broadened to encompass overall performance targets beyond just job creation or capital investment. For instance, if a business fails to meet sales targets or fails to achieve predetermined revenue levels, the state may claw back incentives or impose penalties. 4. Recapture Clawback: This type of clawback may be implemented when the recipient breaches specific terms of the agreement, such as relocation or downsizing within a specified period. The state reserves the right to claw back previous assistance or incentives. It's important to note that the specifics of the Kentucky Clawback Guaranty can differ depending on the individual incentive agreement and the nature of the project. Therefore, it is crucial for businesses and individuals involved in economic development projects in Kentucky to fully understand the terms and obligations outlined in their particular agreement to avoid potential clawbacks.
Kentucky Clawback Guaranty
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How to fill out Kentucky Clawback Guaranty?
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The SEC Clawback Rules require that a committee composed of independent directors charged with oversight of executive compensation, or the independent members of the board of directors, must make any determination that the recovery of erroneously awarded compensation would be impracticable.
Employee agrees that the Company shall have the right to require Employee to repay the value of the shares received by Employee pursuant to this Agreement, as may be required by law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations ...
For example, a company might initiate a clawback if they offer a bonus to an employee based on their job performance but later discover their assessment of the performance was incorrect. Clawbacks often refer to money, but they might also apply to legal documents and other significant nonmonetary items.
This is a common term of the private equity agreement. To the extent that the general partner receives more than its fair share of profits, as determined by the carried interest, the general partner clawback holds the individual partners responsible for paying back the limited partners what they are owed.
A clawback is a contractual provision whereby money already paid to an employee must be returned to an employer or benefactor, sometimes with a penalty. Many companies use clawback policies in employee contracts for incentive-based pay like bonuses.
Employee agrees that the Company shall have the right to require Employee to repay the value of the shares received by Employee pursuant to this Agreement, as may be required by law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations ...
A clawback is a contractual provision that requires an employee to return money already paid by an employer, sometimes with a penalty. Clawbacks act as insurance policies in the event of fraud or misconduct, a drop in company profits, or for poor employee performance.
For example, if fund targeted a 10% annual return but only returned 7% for a period of time, investors known as limited partners may be entitled under the terms of their investment agreement to "claw back" a portion of the carry paid to the general partner to cover the shortfall when the fund closes.