# Draft Management Rollover Agreement > Guides drafting of a management rollover agreement and companion issues memo, requiring resolution of tax-treatment bifurcation, acceleration-trigger conflicts, call price discrepancies, restrictive-covenant enforceability, distribution-priority conflicts, and spousal-consent requirements in jurisdictions where marital property rules may affect equity interests. - Skill: `finchipaiorg/draft-management-rollover-agreement` (Agent Skill) - Install (CLI): `npx skillmds@latest add finchipaiorg/draft-management-rollover-agreement` - Raw SKILL.md: https://api.skillmd.com/api/skills/finchipaiorg/draft-management-rollover-agreement/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: FinchipAIOrg (https://skillmd.com/u/finchipaiorg) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/finchipaiorg/draft-management-rollover-agreement --- # Skill: Draft Management Rollover Agreement ## 1. Subject-matter triage (only if applicable) - Treat the management rollover agreement as the primary deliverable and the issues memorandum as secondary analysis. - Before drafting the memo, ensure the agreement draft is complete enough to stand on its own and contains operative clauses, exhibits, and placeholders for unresolved items. - Identify whether the source set contains one or multiple management participants, one or multiple equity classes, and one or multiple governing jurisdictions; analyze each separately rather than assuming a single representative case. - If marital-property exposure is implicated, isolate the affected signer(s) and require a consent path for each relevant spouse or domestic partner as appropriate to the governing jurisdiction. ## 2. Failure modes the skill is correcting - Collapsing rollover equity and compensatory equity into one bucket, which obscures tax treatment and economic intent. - Leaving acceleration language inconsistent across transaction documents, especially where one document implies single-trigger vesting and another requires a termination-based second trigger. - Using inconsistent call-price mechanics for bad-actor departures, which makes the economic consequence of termination unclear. - Drafting restrictive covenants without matching the governing-law and enforceability framework to the scope and duration chosen. - Ignoring a distribution hierarchy elsewhere in the capital structure, which can make a purported pari passu grant internally inconsistent. - Omitting spousal consent where marital-property rules may give a non-employee spouse an interest that is not automatically bound by the management member’s restrictions. - Writing the memo as a narrative summary instead of a decision-oriented conflict matrix that identifies each issue, the chosen resolution, and remaining open items. ## 3. Legal frameworks / domain conventions that apply - Rollover mechanics should distinguish existing equity exchanged at closing from any new incentive equity granted in connection with the deal. - Tax-treatment bifurcation should preserve the intended treatment of each equity category; do not use blended language that could be read to convert a rollover into compensation or vice versa. - The rollover amount must track the agreed economic hypothetical in the source materials and be stated consistently across recitals, definitions, and operative provisions. - Vesting may be time-based, performance-based, or hybrid; the agreement should specify the applicable schedule, forfeiture mechanics, and any service-based conditions. - Acceleration language must be harmonized across the agreement and related transaction documents, with the applicable protection period stated clearly if acceleration depends on post-change-of-control termination. - Call-right pricing must be internally consistent for each termination category, especially for Cause, disability, death, voluntary departure, and termination without cause. - Restrictive covenants should be drafted with attention to governing law, duration, geography, scope of activity, and any severability or modification provision recognized in the applicable jurisdiction. - Distribution and liquidation concepts must be reconciled with the capital structure documents; a nominal pari passu grant may still sit behind a preferred return or other priority economics. - Transfer restrictions, repurchase rights, and lock-up terms should align so the management holder cannot circumvent the agreed exit mechanics. - Spousal consent is a customary risk-control device where marital-property rules could affect transferability or enforcement of the equity interest; the consent should acknowledge the restrictions, vesting conditions, and call/repurchase rights. - Use recognized transactional authorities and document-construction principles for the relevant jurisdiction when stating legal effects; do not assert enforceability without tying it to the governing-law framework or an applicable statutory or common-law rule. ## 4. Analytical scaffolds ### Management rollover agreement drafting flow 1. **Identify the equity buckets** - Separate rollover equity from any new compensatory grant. - State whether each bucket is subject to the same or different vesting, transfer, forfeiture, and tax treatment. 2. **State the closing exchange mechanics** - Describe what is contributed, what is issued, and when the exchange occurs. - Align definitions, recitals, and operative provisions so the rollover mechanics do not conflict. 3. **Lock the economics** - Use the source documents’ agreed hypothetical or formula for the rollover amount. - Reconcile call rights, repurchase rights, and any termination-based pricing by category. 4. **Align incentive terms** - Draft vesting and acceleration with a single coherent standard. - If source documents conflict, either resolve the conflict expressly or flag the item in the memo for client instruction. 5. **Test restrictive covenants** - Confirm scope, duration, geography, and activity restrictions are drafted to the intended level of restraint. - Include any severability, reformation, or blue-pencil language only if compatible with governing law and client preference. 6. **Check distribution hierarchy** - Compare the rollover equity’s participation language to any preferred-return, liquidation-preference, or priority distribution provisions in the organizational documents. - Resolve any mismatch in the agreement or flag it as an open item. 7. **Address family-law exposure** - If the management holder is in a jurisdiction where marital property may attach, include a spouse consent or exhibit placeholder as a condition to effectiveness or closing. ### Issues memorandum analysis flow - Identify each conflict, inconsistency, or open drafting point. - State the document sources that create the conflict. - State the resolution adopted in the draft, or identify the issue as reserved for client decision. - Explain the practical consequence if unresolved: economics, tax treatment, enforceability, closing certainty, or post-closing administration. - Use a clear issue-by-issue format rather than a prose summary. ### Review checklist for the draft - Rollover equity and new grant are separately described. - Tax treatment is not collapsed into a single formulation. - Vesting, acceleration, and termination-based pricing are internally consistent. - Restrictive covenants are calibrated to the stated jurisdiction and business scope. - Distribution priority is checked against the governing equity documents. - Spousal consent is included where prudent. - Any unresolved source-document conflict is flagged in the memo, not silently ignored. ## 5. Vertical / structural / temporal relationships (only if applicable) - Distinguish closing-time actions from post-closing obligations. - Separate one-time exchange mechanics from continuing service, vesting, and restriction obligations. - Reconcile the management holder’s rights against the company’s repurchase or call rights and against any investor or senior-equity priority. - If multiple jurisdictions appear in the source set, tie each covenant or consent requirement to the specific governing-law environment that controls that provision. - If a condition to effectiveness depends on delivery of a spouse consent, treat it as a closing gate rather than a post-closing cleanup item. ## 6. Output structure conventions - Produce a substantively complete management rollover agreement draft, not a term sheet or annotated summary. - Produce a separate issues memorandum that is decision-oriented and concise. - The agreement should include the operative provisions, defined terms, and any necessary exhibits or placeholders for unresolved items. - The memo should list each identified conflict, the resolution adopted or proposed, and the remaining open items requiring instruction. - Include a spousal-consent exhibit or exhibit placeholder if the source materials indicate marital-property risk. - Use conventional M&A drafting architecture: recitals, definitions, operative covenants, restrictive covenants, transfer and repurchase mechanics, vesting/forfeiture, miscellaneous provisions, and exhibits. - Before finalizing, confirm that the agreement file is the primary drafted instrument and that the memo follows as a secondary advisory deliverable.