FOREIGN OPERATION SERVICE. ARTICLES OF PARTNERSHIP. Cornell University Library KF 1373.1F71 Articles of partnership 3 1924 018 844 872 (Homell Haui &t\}tm\ iGibrarg NATIONAL. 83-481 MADE IN U.S. A. Yore^ru Gpe^Tiov, j6«rvift« ARTICLES OP PARTNERSHIP 3450-ii 'K Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018844872 ARTICLES OF PARTNERSHIP CONTENTS Title Page No The Name of the Firm 1 The Duration of the Partnership 1 Firm Name 2 Statements of Policy 2 Organs of Control and Management 4 The General Meetings of the Partners 5 Local, Quarterly and Other Meetings 7 Resolution in Writing Signed by the Partners 8 Committees 8 The Policy Committee 8 Management of Offices Located Outside the U. S. 11 Prerogatives of General Meetings of the Partners 12 Compensation of Policy Committee Members 13 Dues, Entertainment and Promotion Expenses 13 Paid-in Capital 14 Distribution of Earnings 14 Sharing of Losses 15 Voluntary Withdrawal 15 Involuntary Withdrawal 16 Leave of Absence 18 Retirement 18 Payments to be Made to Retiring Partners 19 Retired Partner May Remain as Counsel 20 Payments to the Personal Representative and to Beneficiaries of a Deceased Partner 20 Validity of Provisions 22 SCHEDULE B - Formula for Distribution of Earnings SCHEDULE C - Rules for Determining Client Credit ARTICLE I THE NAME OF TH E FIRM l.OO. The name of the Firm is „> & . That mjne shall he used wherever it is possible and permissible to do so as determined y 5p. law of each jurisdiction in which the partnership has an Oxtice and the rules of the relevant body charged with such matters. 1.01, In jurisdictions where the Firm has offices or wnere its members and/or associates regularly and continuously perform services, if the Firm name may not be used, then such name as is used and the manner of using it shall be as closely related to the Firm name as is permissible or advisable in each particular case. 1.02. The use of any other name or the change in any other name currently used by the partnership in other juris- dictions shall require the prior approval of the Policy Committee, provided that the decision of the Policy Committee is ratified by all of the partners save three. ARTICLE II THE DURATION OF THE PARTNERSHIP 2.00. These Articles of Partnership shall be in full force and effect as of the first day of , 196 . They shall extend to , and shall remain in effect from year to year thereafter. 2.01. The death, retirement, voluntary or involuntary withdrawal or leave of absence of any Partner, or the admission of new Partners, shall not dissolve the partnership between the other Partners. The partnership shall continue until its term has expired, or until it is otherwise terminated as provided by law or by agreement. 2.02. A dissolution of the partnership shall occur if more than per cent of the then Partners shall withdraw within a period of thirty days. ARTICLE III THE FISCAL YEAR 3.00. The fiscal or partnership year shall continue to be from of one year to of the next. - 2 - ARTICLE IV FIRM NAME 4-. 00. The right to use the Firm name or any indivi- dual name included therein, other than a Partner's own name, shall not "be the property of any individual partner. In the event of withdrawal of Partners, if per cent of the then Partners continue as a firm, they shall continue as the Firm and they shall have the right to the use of the Firm name or any part thereof. Accordingly each Partner hereby agrees, that as an individual Partner he has no property interest in the Firm name. 4.01. The provisions and obligations described in Paragraph 4.00 shall apply to any other name used by the Firm in any jurisdiction. 4.02. All clients are clients of the Firm and not of any individual partner. 4.03. On the death, withdrawal or retirement of a Partner from the Firm, the "client credit", as defined here- inafter, theretofore credited to him shall go to the Firm. Said clients shall thereafter be treated as "firm clients". ARTICLE V STATEMENTS OF POLICY General Objectives 5.00. It is the policy and the purpose of this Firm to provide a legal, ethical and practical framework through the Partnership form, for the mutual cooperation of lawyers (members of the Firm and associates) located and working in several different jurisdictions to form a pool of and a free means of interchange of their knowledge, experience and training on a regular and organized basis, to the end that the services rendered clients operating in one or more juris- dictions be of the highest professional quality. 5.01. It shall be the policy of the firm to maintain at the office at least one lawyer trained in the legal system of the country in which an office of the Firm may exist today or may be established in the future, and to maintain in such office or offices a lawyer trained in the U. S. legal system. - 3 - 5.02. To the end that these Policy statements "be given practical effect, each Partner agrees with the others to cooperate in a training program, the object of which is to build and maintain a staff of Partners and associates com- posed of lawyers who are trained in several systems of law, and to utilize to the maximum possible advantage and extent the particular skills and experience available within the Firm both in particular aspects of U. S. law and in different systems of law and in the practice and methods of government departments and of other competent authorities. In parti- cular, no partner or associate will communicate with any such department or authority located in a jurisdiction where the Firm is represented or with a client relating to matters within such jurisdiction, except through or with the concur- rence of the local office (unless the client is already represented in such jurisdiction "by another firm). Each office and each Partner concerned will be kept continuously informed of the activities of the Firm and of the advice given pertaining to matters within the jurisdiction of the office and of particular concern to such Partners, respectively, 5.03. Members of this Partnership (and associates) shall practice law (as that term is understood and defined in the law of the place where they perform said services) only in the jurisdictions and only in the capacity (i.e., as a member of the Firm or otherwise) in which they are authorized under the local law and practice so to do. No partner or associate of the Firm, nor the Firm, shall hold out or represent any lawyer in the Firm as being authorized to practice local law in any jurisdiction unless said Partner or associate is permitted by the law of that place to do so, and shall in such holding out or representation make clear whether the lawyer concerned acts in such jurisdiction as a member of the Firm or otherwise. 5.04. It is the Policy of this Partnership to operate all offices as parts of a single Firm, to the extent permitted by the applicable law, the Canons of Ethics, or rules of practice of the Bar Association, Law Society, or other rele- vant body having authority in the respective jurisdiction, 5.05. Each Partner shall devote substantially all of his time to the activities of the Firm, and shall practice law exclusively as a member of this Firm, unless otherwise exempted from these provisions by the Policy Committee. 5.06. No member or employee of the Firm shall accept any administrative or managex-ial position, or membership on a board of directors of any corporation, or act as the in- corporator of a corporation. In special cases where except- ional circumstances are present, the Policy Committee is authorized to grant an exemption permitting a Partner or - 4 - employee to act in such capacity, provided the persons for whom he so acts understand and agree that the Partner or em- ployee is acting in his individual capacity and not as a Partner or employee of this Firm. The Partner acting in the above described capacity shall have no right of contribution against the other Partners of this Firm for payment of any liability incurred by him in such capacity. In these situa- tions, the Partner or employee accepting such outside position acts individually and not as a Partner or employee of the Firm . 5.07. It is the Policy of the Firm to encourage its Partners to participate in professional and business organizations as provided by the Policy Committee. According- ly, the Firm will pay the initiation fees and expenses and periodic dues for such approved clubs, provided said dues do not exceed dollars per annum. It will also pay the dues and membership fees for such reasonable number of business and professional organizations as a Partner may request and the Policy Committee may approve. 5.08. It is the general Policy of the Firm that associates are responsible to the Firm and not to the indivi- dual Partners. The general Policy with regard to the direct- ion and training of individual associates shall rest in the Policy Committee. By these Articles, the Policy Committee delegates the day-to-day exercise of these functions and res- ponsibilities to the Partners Meeting of each office. ARTICLE VI ORGANS OF CONTROL AND MANAGEMENT 6.00. Final control of this Firm shall reside in the Partners acting as a body by means of : (i) annual and special general meetings of the Partners, and (ii) written resolutions approved in writing by per cent of all the then Partners. 6.01. The Firm shall have the following additional organs of control and management: (i) Quarterly meetings of the Partners resident in the United States for the purpose of formulating policy as to the management of the purely internal and local affairs of the offices in the United States. ( ii ) Quarterly meetings of the Partners of the respective offices located outside of the United States for the purpose of formulating policy as to the management of the purely in- ternal and local affairs of each of said offices. - 5 - (iii) Special meetings of the Partners resident in the United States for the purpose of formulating policy as to the management of the purely internal and local affairs of the offices in the United States. (iv) Special meetings of the Partners of the res- pective offices located outside of the United States for the purpose of formulating policy as to the management of the purely internal and local affairs of each of said offices. (v) Area meetings of the Partners. (vi) The Policy Committee and such other persons or committees to whom it may delegate func- tions. 6.02. Except as is authorized by these Articles or by action of the Partners in a meeting or Resolution, no Partner or associate of this Firm shall have authority to act on behalf of the Firm on matters other than the practice of law. ARTICLE VII THE GENERAL MEETINGS OF THE PARTNERS 7.00. There shall be an annual general meeting of the Partners, which meeting shall be held within days after the close of the fiscal year. 7.01. The date and duration of the annual general meeting shall be fixed by the Policy Committee after consulta- tion with all the partners. 7.02. Special general meetings of the Partners may be called at any time upon 30 days notice by a resolution approved by the affirmative vote of more than per cent of all the Partners. 7.03. The Policy Committee may call a special general meeting by giving at least 30 days notice or, in the event of an emergency, by giving at least 15 days notice. 7.04. All general meetings of the Partners shall be called by means of written notice given to each Partner by the Policy Committee and shall be held at the place, date and at the time fixed in said notice. Any Partner may waive this notice requirement in writing or by attending the meeting in person. - 6 - 7.05. At least 30 days prior to each, general meeting (except for emergency general meetings) of the Partners, the Policy Committee shall prepare and circulate an agenda. Any Partner may add to the agenda by sending the item via 1 airmail to each office at least 15 days prior to the meeting. If a Partner cannot attend a meeting, he may prepare a memo- randum expressing his views on the items of business to be considered at said meeting and shall send said memorandum to the Chairman of the Partners' Meeting, who shall make its contents known to the Meeting. 7.06. General meetings of the Partners shall be legally constituted (i.e., a quorum is present) within the framework of these Articles, provided that per cent of all of the Partners are personally present. 7.07. Each Partner shall have one vote at all meetings of the Partnership. All matters shall be decided by majority vote of the Partners voting in person or as pro- vided in Paragraph 7.09, except for the following: (i) The amendment of the Articles which shall require unanimous consent of the Partners. (ii) The admission of new Partners. By execution of these Articles, each Partner authorizes all and each of the other Partners to act by vote to admit new Partners to the Firm and does hereby ratify and confirm such act taken under the authority of this paragraph save where in casting of such vote there are dissident votes against admission of such new members. That is to say, the admission of a new Partner requires the affirmative vote of all the Partners save (iii) Such other items specifically hereinafter mentioned as requiring more than a simple majority vote. 7.08. Where, as is required by the terms of the preceding paragraph, certain items of partnership business require more than majority consent of all Partners, and if action is taken on such an item at a general meeting of the Partners which meeting fulfills the quorum requirements of these Articles, the Partners not attending said meeting may adhere to the action taken by recording within 60 days there- after their written approval thereof. If the requisite number do so, then the action shall have the same validity as though it had received the required number of votes in a conventional general meeting of the Partners. - 7 - 7.09. Any Partner not attending a general meeting shall have the right to cast his vote with respect to all resolutions considered by the meeting, provided said vote is communicated in writing to the recording secretary of the meeting within 30 days after the circulation of the minutes of the meeting. 7.10. Each meeting of the Partners shall elect a Chairman thereof, who shall preside over and conduct the meeting. 7.11. A Recording Secretary shall "be elected by each meeting of the Partners. 7.12. All decisions of general meetings shall be recorded in minutes prepared by the Recording Secretary, copies of which minutes shall be circulated to each Partner as soon as possible after each meeting, but in no case later than 30 days thereafter. 7.13. The Chairman designated by any General Meeting of the Partners shall have the responsibility of maintaining stenographic records of all proceedings of such meeting unless this requirement is waived by a majority vote of the Partners attending such meeting as to all or any portion of said proceedings. 7.14. Once copies of minutes have been circulated, they shall be deemed to be accurate unless a Partner questions them within thirty days of the mailing date. ARTICLE VIII LOCAL, QUARTERLY AND OTHER MEETINGS 8.00. There shall be a meeting of the resident Partners in the United States and in each office located outside the United States once each quarter, counting from the date of the annual general meeting, for the purpose of considering local matters. 8.01. The majority of the Partners in any office may at any time call a special meeting to consider local matters. 8.02. A majority of the Partners in any area com- prising more than one local office may at any time call a meeting to consider items of mutual interest. 8.03. A copy of the minutes of all meetings shall be forwarded to the Policy Committee and to each other office. - 8 - 8,04. Rules of procedure shall be adopted by the affirmative vote of per cent of the Partners resident in each office or area with respect to quorum, voting, and recording of proceedings. ARTICLE IX RESOLUTION IN WRITING SIGNED BY THE PARTNERS 9.00. Any item of Partnership business not re- quiring a vote greater than a simple majority may be deter- mined and decided without a meeting of the Partners by the simultaneous circulation to each Partner of a proposed Resolution signed by one Partner and seconded by another. Said Resolution shall take effect 30 days after final adopt- ion by a per cent affirmative vote of all Partners. Within the 30-day period any Partner may change his vote. ARTICLE X COMMITTEES 10.00. The Firm shall be managed and administered by the Policy Committee. It shall create subsidiary commit- tees, including a United States Offices Committee, a Finance and Formula Committee, a United States Library Committee and such other committees as in its judgment may be necessary. The Policy Committee shall appoint and substitute the mem- bers of the subsidiary committees. The subsidiary committees shall report to and be responsible to the Policy Committee which shall prescribe their functions and their methods of reporting. The policy Committee in turn shall report to the Partners. ARTICLE XI THE POLICY COMMITTEE 11.00. The Policy Committee shall consist of the following members: - 9 - 11.01. As new offices are established additional members may be added to the Policy Committee upon nomination approved by three-fourths of the then existing members of the Policy Committee and election by a per cent ( $>) vote of the then Partners. Vacancies in the Policy Committee caused by death, incapacity or withdrawal from the Firm shall also be filled "by Partners nominated by a vote of three- quarters of the then remaining members of the Policy Committee and elected by a per cent ( %) vote of the then Partners. 11.02. The Policy Committee shall operate as a body and not by the action of individual members thereof, except as individual action is authorized by a general partners meeting or by the Policy Committee. 11.03. Action taken by the Policy Committee shall be recorded in minutes and circulated to the Partners as soon as practicable after the meeting but not later than five days subsequent to the meeting. All relevant papers and documents shall circulate with the minutes. 11.04. The Policy Committee shall adopt and may modify its own rules of procedure, including rules with res- pect to the quorum and votings, upon approval by three- quarters of the then members of the Policy Committee. 11.05. Final authority, management and control of this Firm shall reside in the Partners acting as provided in paragraph 6.00. By these Articles the Partners delegate, subject to the limitations prescribed in Article XIII, the administration and management of the Firm to the Policy Com- mittee. Any action of the Policy Committee may be approved, modified, or rescinded by the Partners acting as a body -as provided in paragraph 6.00. By way of illustration and not in limitation of its duties and functions, the Policy Committee shall: (i) Conduct the day-to-day affairs of this Partnership. (ii) Make recommendations to a Partners' meeting on all Policy matters. (iii) In the interval between meetings of the Partners, make all policy decisions. (iv) Act for the Firm in all matters in the inter- val between Partners' meetings. (.v) Decide and settle all disputes or conflicts which may arise between Partners or associates. - 10 - (vi) Determine billing rates of attorneys. (vii) Supervise relations between clients and attorneys. (viii) Determine whether the Firm will represent a client. (ix) Resolve all conflict of interest questions. (x) Establish policy in respect to legal advice and opinions to clients. (xi) Assign work among Partners or associates without respect to client credit, (xii) Designate Partners or associates to perform specific duties and to handle specific matters for the Firm or for any client. (xiii) Establish procedures requiring a written record of every item of legal advice given to a client, whether said advice is extended orally in the first instance or not. (xiv) Review all legal or professional material to be offered for publication by members of the Firm or associates and determine whether it shall be published or not. (xv) Supervise the use of correspondent attorneys by lawyers of the Firm. (xvi) Arrange housing for the Firm. (xvii) Direct the employment, discharge and fixing of the duties and compensation of all non- professional employees. (xviii) Direct the employment, discharge and fixing of the compensation of all professional employees or assistants in the United States, with the prior approval of per cent ( f>) of the Partners. (xix) Direct the employment, discharge and fixing of the compensation of all professional assistants or employees in offices outside the United States, provided, however, that if after a unanimous vote of the Partners in the local office, notification to the Policy Committee, and a circularization of the curriculum vitae of the applicant, - 11 - Partners within thirty (30) days request a reconsideration of this matter by all Partners, a vote of the Partners shall he required in order to ratify the action taken by the Partners of the office concerned. (xx) Supervise the Partnership accounts. (xxi) Receive reports regarding new clients and determine client credit. 11.06. Any Partner is free to attend any meeting of the Policy Committee, Any Partner whose interests are directly affected by a contemplated action of the Policy Committee shall be invited to attend the meeting at which such action is to be considered, and in those Instances- where contemplated action of the Policy Committee shall directly affect the interests of any individual Partner or any office, the affected Partner or office shall be consulted. ARTICLE XII MANAGEMENT OP OFFICES LOCATED OUTSIDE UNITED STATES 12.00. The quarterly and/or special meetings of the Partners in each office located outside the United States shall carry on and direct the operation of the respective office in accordance with these Articles and the directives of the Policy Committee. 12.01. The Partners in each of said offices will establish rules for the call and conduct of local Partner- ship meetings. 12.02. The meetings of the partners in each of said offices shall have the following duties, in accordance with these Articles and the directives of the Policy Committee: (i) Conduct the day-to-day affairs of the office. (ii) Make recommendations to the Policy Committee or to Partners Meetings. (iii) Determine billing rates of professional employees or assistants in that office, sub- ject to the approval of the Policy Committee. (iv) Establish policy in respect to legal advice and opinions to clients. - 12 - (v) Assign work among Partners or associates without respect to client credit. (vi) Designate Partners or associates to perform specific duties and to handle specific matters for the Firm or for any client. (vii) Establish procedure requiring a written record of every item of legal advice given a client, whether or not said advice is extended orally in the first instance. (viii) Arrange housing for the office. (ix) Employ, discharge and fix the duties and compensation of all non-professional employees in said office. (x) Employ, discharge and fix the compensation of all professional assistants or employees, subject to the provisions contained in para- graph 11.05, sub-paragraph xix, hereof. (xi) Supervise the Partnership accounts in said office. (xii) Make first determinations regarding the representation of a client, subject to approval by the Policy Committee. (xiii) Make recommendations to the Policy Committee or General Partners' meetings respecting the billing rates and draws of Partners resident in said office. (xiv) Perform such other duties and functions as the Policy Committee or the General Partners' meeting may delegate in writing. 12.03. Action proposed to be taken by the Partners of an office outside the United States, other than day-to-day matters, shall be reported in writing to the Policy Committee. ARTICLE XIII PREROGATIVES OF THE GENERAL MEETINGS OF THE PARTNERS 13.00. Without limiting in any way the final pre- rogative to manage and control the Firm, the following are mentioned as items falling within the exclusive authority of the general meetings of the Partners: - 13 - (i) Pinal approval of the distribution of earnings to each individual Partner. (ii) Amending the Articles. (iii) Admission of new Partners. (iv) Acting upon the withdrawal, retirement or leave of absence of a Partner. (v) Establishing and opening of offices. (vi) Within the limiting provisions elsewhere contained in these Articles, the general meetings of the Partners shall have exclu- sive authority over and regarding the employment, discharge, and fixing of com- pensation of professional associates, employees or assistants. (vii) The assumption of any obligation by the Firm implying a liability or obligation of more than dollars. (viii) The approval of all leases and/or contracts that extend beyond one year in term. ARTICLE XIV COMPENSATION OF POLICY COMMITTEE MEMBERS 14-00 The members of the Policy Committee shall not be compensated for performing the services required of them under these Articles. ARTICLE XV DUES, ENTERTAINMEN T AND PROMOTION EXPENSES 15.00. Dues, subscriptions, promotional, and enter- tainment expenses that are approved by the Policy Committee shall be chargeable to the Partnership and paid by it. In the case of dues and subscription, the Partner or Partners desiring to have the Partnership assume the payment thereof, shall submit a proposal in writing to the Policy Committee for approval. 15.01. Since one of the principal purposes of the Policy Committee is to control expenses and operating over- head, all lawyers' entertainment and promotion costs are subject to examination and approval by the Policy Committee. The Policy Committee may request the particular attorney - 14 - for further information or clarification when necessary. If, after the receipt of such additional information, the Policy Committee is still not satisfied as to the propriety of the charge, the matter will then be presented to the next meeting of the Partners for approval or rejection. 15.02. Each Partner is expected and required to spend his own funds in attracting clientele. Special situa- tions shall "be decided by the Policy Committee. ARTICLE XVI PAID-IN CAPITAL 16.00. Paid-in capital, as used herein, shall be the total tangible investment in currency or assets of value, contributed to the Partnership by the Partners. Paid-in ca- pital of the Partnership, as of the date of these Articles, appears in the attached Schedule A. (Deleted) 16.01. Withdrawals from the stated capital shall be made only with the consent of the majority of the Partners. 16.02. Each Partner shall pay in a minimum of US$ or its equivalent in kind or currency, plus such other annual contributions as the Partners agree. The foregoing may be waived or modified as local Partners and local conditions may require with the approval of a majority of the Partners. ARTICLE XVII DISTRIBUTION OF EARNINGS 17.00. General Statement : It is the Policy of this Firm that individual Partners' earnings shall be based on their own efforts in the performance of legal services and in the attracting of clients to the Firm in the jurisdiction of their residence. The earnings of each office shall be determined as though that office were a separate entity, and the Partners based in that office shall receive their compensation from the earnings of that office. No Partner shall be entitled to a fixed share of the earnings of the Firm, but rather shall be compensated for his services out of the fees produced by his efforts. 17.01. Distribution of earnings to the Partners shall be determined by use of a formula, the design of which is to measure by use of objective criteria, to the extent this is possible, the real contribution of each Partner to the success of the Firm. A detailed description of the formula is - 15 - attached to these Articles and made a part hereof. The formu- la itself is marked Schedule B and the method of determining client credit is contained in Schedule C. The results de- termined under the formula may "be varied as follows: (i) On recommendation of the Policy Committee accepted "by a majority vote of the Partners, the total participation of any Partner may be decreased by as much as per cent or increased up to per cent; and (ii) Variations upward in excess of per cent will require the affirmative vote of three- quarters of the Partners. 17.02. The formula shall take into consideration among other things: (i) Productive work performed for clients. (ii) Pees collected or brought into the Firm. (iii) Clients brought into the Firm because of a particular Partner's reputation. (iv) Cost of operation of the Partners to the Firm, e.g., draw, cost of secretaries, the cost of the space allocated to him, expenses of memberships in clubs and other dues-collecting associations, and his share of the general Firm expenses, etc. (see Schedule B) ARTICLE XVIII SHARING OF LOSSES 18.00. Net losses of the Partnership for any fiscal year shall be shared by the Partners over and above their respective stated capital contributions as defined in Schedule B on the following "basis: Lach Partner shall "bear the same percentage of such loss as his total participation over the previous three (3) fiscal years bears to the sum of the total participation of all Partners for that period. ARTICLE XIX VOLUNTARY WITHDRAWAL 19.00. Any Partners may voluntarily withdraw from the Partnership upon giving at least ( ) calendar months prior notice in writing of his intention to do so. - 16 - 19.01. Any Partner voluntarily withdrawing from the Partnership and giving written notice as prescribed in Para- graph 19.00, shall be entitled to receive, not later than ( ) years after the date of his withdrawal: (i) The amount of paid-in capital standing to his credit, including such credits and deductions as are applicable up to and including the effective date of his with- drawal. In the case of assets originally contributed in kind as part of his paid-in capital, a withdrawing Partner may elect to have returned, as partial or total repay- ment of his capital, the same assets at their then book value (in the case of depreciable assets) or at their contri- buted value (in the case of non-depreciable assets) . ( ii ) The Partner's share of participation in the Partnership' s net profits for the then current year to the date of withdrawal, which profits shall not be paid out to him until the end of the year. 19.02. In the event the Partner voluntarily with- drawing fails to give the notice prescribed in Paragraph 19.00, he shall receive only the amount specified in Paragraph 19.01(1). 19.03. If in the opinion of the Policy Committee the financial condition of the Firm is such that the paid-in capital of the Partner voluntarily withdrawing can be paid sooner than is hereinabove provided, the Committee shall have authority to do so at such times and in such amounts as they deem desirable. 19.04. Notwithstanding any provision contained in this article to the contrary, the amounts payable in accord- ance with this article may be increased by a resolution adopted "by a three-fourths vote of all the Partners. APT I CLE XX INVOLUNTARY WITHDRAWAL 20.00. In the event that any Partner is requested to withdraw from the Firm, the conditions of Article XIX shall not apply. Such withdrawal shall be requested only after a resolution has been approved by all of the then Partners save . The Partner whose involuntary with- drawal is under consideration shall be allowed to cast his vote on this particular resolution. In the event that such - 17 - resolution is adopted, the withdrawal shall become effective ( ) days after written notice of such resolution is given to the Partner concerned. Formal action by a general Partners' meeting is required to set in motion any proceedings pertaining to an involuntary withdrawal. No Partner shall have any right to speak for the Firm on this matter unless authorized by the Partnership to do so. 20.0.. If a Partner withdraws involuntarily, he shall be entitled to receive as of the effective date of his withdrawal: (i) The amount of paid-in capital standing to his credit, including such credits and deductions as are applicable up to and including the effective date of his with- drawal. In the case of assets priginally contributed in kind as part of his paid-in capital, a withdrawing Partner may elect to have returned, as partial or total repayment of his capital, the same assets as their then book value ( in the case of depreciable assets) or at their contributed value (in the case of non-depreciable assets) . (ii) His share of participation in the Partner- •--~ ship's net profits for the then current year to the date of withdrawal, as deter- mined in Article XVII. Payment of said amounts shall be made at the end of the fiscal year. (iii) per cent ( ) of his annual average share of Partnership profits measured by the last ( ) immediately preceding years that he has been a Partner of the Firm, payable over a period of time not to exceed ( ) years, in accord and full satisfaction of any claims by a with- drawing Partners against the Firm. 20.02. The amounts payable under Paragraph 20.01 may be increased by a resolution adopted by a three-fourths vote of all the Partners. If a withdrawing Partner is resident outside the United States and settlement is not feasible under this article, the Partners may make a settle- ment with him in conformity with the law of the place where he resides, the terms of which settlement shall correspond as closely as possible to the terms of the settlement which would have been made with him under this article. - 18 - ARTICLE XXI LEAVE OF ABSENCE 21.00. If a Partner requests a leave of absence from active practice with the Firm, the same shall be granted upon such terms and conditions as the Partners shall decide. Each case shall be resolved by an agreement between the Partner and the Firm. In the absence of formal agree- ment the provisions expressed in Paragraph 21.01 and Para- graph 21.02 shall govern. 21.01. If a Partner is granted a leave of absence, he shall be entitled to receive the work credit on his billing received both before and after the date of his be- ginning his leave of absence computed in accordance with the formula. This sum shall be distributed to him after each annual meeting for the years in which fees are received for work previously done by him. 21.02. If a Partner is granted a leave of absence, he shall be entitled to receive the client credit on clients brought to the Firm by him. The sum due to the Partner shall be determined annually in accordance with the formula and shall be distributed to him after the annual meeting for the year in which the client credit was earned. ARTICLE XXII RETIREMENT 22.00. Any Partner, upon reaching the age of sixty-five (65) shall be entitled to retire at his option, or shall be retired upon the affirmative vote of all but of the remaining Partners, and any Partner, upon reaching the age of seventy (70) shall retire at the option of the remaining Partners by a three-fourth majority vote. Such retirement shall occur at the termination of the then current fiscal year after the annual meeting for that fiscal year. 22.01. If any Partner as a result of an accident, disease, sickness, physical or mental impairment, is unfit or unable to devote his full time as a practicing lawyer to the Partnership, then such inability, although occurring prior to age sixty-five (65) shall constitute a reason for retiring from the Partnership. Any Partner so afflicted may retire from the Partnership at his option, if accepted by a majority of the Partners, or at the option of the other Partners by unanimous vote save . - 19 - ARTICLE XXIII PAYMENTS TO BE MADE TO RETIRING PARTNERS 23.00. The following payments shall be made to any Partner retiring under the terms of this agreement at age sixty-five (65) or thereafter, or pursuant to the terms of Article XXII: (i) An amount equal to the sum of: (a) Any unpaid amount of his agreed draw for that month at the time of his retirement; (b) Any unpaid balances stated in his personal account, ( ii ) The amount of paid-in capital standing to his credit on the date of his retirement. This amount shall be payable to said Partner at the option of the remaining Partners either in equal installments, over a period not to exceed ( ) years from the date of such retirement, or in a lump sum. In the event the remaining Partners decide to pay the said sum in installments, the said unpaid balance shall bear interest at the rate of per cent ( $>) per annum from the date of retirement to the date of final payment. (iii) The work credit on his billing received both before and after the dates of his retirement computed in accordance with the Formula. This sum shall be distributed to him after each annual meeting for the years in which fees are received for work pre- viously done by him. (iv) A yearly retirement income consisting of the following sums: (a) A monthly payment for life, to be paid, to the extent possible, out of the earnings of the office or offices in which the Partner was resident during the period of his years of service with the Firm, as follows: - 20 - Amount Years of Service in the Firm Dollars Per Month 0-5 years _. Over 5 years but not more than 10 years " 2.0 " " " " " 15 " "2.5 " " " " "25 " "25 " " " " " " (b) A lump sum payment each year after the annual meeting consisting of per cent ( f.) of the gross fees received on clients of which the Retired Partner has the client credit under the Formula reduced by the amount distributed during the prior year under sub-paragraph (a) above. (c) The total annual payments due under sub -paragraphs (aj and (b) above shall, however, be limited to a maximum sum of % in any year. The payments stipulated under the provisions of this Article shall be suspended for such time as the Retiring Partner, without first receiving permission in writing from the Policy Committee, engages in the practice of law, either by himself or as a member or associate of another firm. ARTICLE XXIV RETIRED PARTNER MAY REMAIN AS COUNSEL 24.00. A Retiring Partner may remain as counsel for the Firm and receive special compensation for such service without in any way affecting his right to receive retirement income as provided in Article XXIII. ARTICLE XXV PAYMENTS TO THE PERSONAL REPRESENTATIVE AND TO BENEFICIARIES OF A DECEASED PARTNER 25.00. If a Partner shall die during the term of this Agreement, there shall be payable to the personal representative of such deceased Partner as the deceased Partner' s full and complete share of the Partnership assets and earnings, the following: - 21 - (i) Any unpaid amount of the deceased Partner's agreed draw for the month in which his death took place. (ii) Any unpaid balance stated in the personal account of the deceased Partner. (iii) The amount of paid-in capital standing to the credit of the deceased Partner on the date of his death. This amount shall be payable at the option of the surviving Partners either in equal installments over a period not to exceed ( ) years from the date of such death, or in a lump sum. In the event the surviving Partners decide to pay the said sum in installments, the said unpaid balance shall bear interest at the rate of per cent ( $) per annum from the date of death to the date of final payment. (iv) The deceased Partner's share of participation in the Partnership' s profits for the Partner- ship year of his death computed in accordance with the Formula and payable after the annual meeting for that year; and, for succeeding Partnership years, the work credit of the deceased Partner which shall be 1 com- puted annually and paid after the annual meeting for the years during which the fees were received. For purposes of this sub- paragraph, client credit shall be due only on fees billed prior to the deceased Partner' s death to the clients credited to him for Formula purposes at the time of his death. s 25.01. If a Partner shall die during the term of this agreement, there shall be paid, as income and not as capital, in lieu of any further claim against the assets of the Partnership to the person or persons designated by the deceased Partner or, failing such designation, to any of his beneficiaries as determined in the sole discretion of a majority of the surviving Partners, a monthly payment as follows: (i) For deceased Partners whose names appear in the Firm name or who become Partners before age — a payment of $ per month for 120 months or $ per month for 240 months. - 22 - (ii) For deceased Partners who become Partners after age — a payment of $ per month for~120 months or $ per month for 240 months. The time period over which the payment is to he made shall be selected by the Partners. If, however, the deceased Partner has failed to make a choice as to the time period, a Majority of the surviving Partners may chbose whether the 120 month or 240 month payments shall be made. Written statements should be filed by the Partners with the Polic Committee setting forth the time period over which benefits are to be paid and the persons who are to receive the payments. Failing the filing of such statements, a majority of the surviving Partners are hereby empowered to decide to whom and the time period for which the payments shall be made. In exercising this power the surviving Part- ners are to consider and protect the best interests of the deceased Partner. The payments herein provided shall be made to the extent possible from future profits of the Partnership earned in the office where the deceased Partner was last engaged at in the practice of law. At its option the Firm may at any time discharge its obligation herein provided by distributing as a capital payment a sum which is the same portion of 1 as the number of months over which payments have been made up to the time of the exercise of the option bears to the total number of months for which payments were to have been made; provided, however, that in the case of payments to beneficiaries of a deceased Partner who became a Partner after reaching the age of , the sum shall be reduced in half. ARTICLE XXVI VALIDITY OF PROVISIONS 26.00. In the event any Article or part thereof should be invalid under the laws or codes of professional ethics of the respective jurisdiction where any Partner or Partners reside, the remaining Articles shall remain in full force and effect with respect to said jurisdiction. The in- validity of any Article or part thereof as to a Partner or Partners resident in any particular jurisdiction shall not affect its validity as to a Partner or Partners resident in the remaining jurisdictions. - 23 - These Articles of Partnership have been subscribed by the undersigned in , , United States of America, as of the day of , 196 with the condition that if any of the persons named to the Policy Committee in Article XI fail to sign these Articles of Partnership prior to , 196 , said persons shall no longer be members of the Policy Committee. List of Signatures SCHEDULE B FORMULA FOR DISTRIBUTION OF EARNINGS 1.00 GENERAL STATEMENT No Partner of this Firm shall be entitled to a fixed share of the net_ profits of the Firm, Each Partner shall he compensated out of the fees produced by his own efforts in the performance of legal services and in the attracting of clients to the Firm. Irrespective of the method of calcula- ting a Partner' s compensation, it is understood that such compensation is paid solely in exchange for personal services rendered by him. In order to take into account the variance in the profitability of each office of the Firm, the net profits of each office shall be calculated separately as though the offices of the Firm were separate entities. Each Partner will receive his "participation" from the net profits of the office in which he is based. 2.00 DEFINITIONS For purposes of this Schedule B, the following are the definitions of terms used herein: 2.01 "Gross Fees" are defined as the fees received from clients for legal services rendered by the Partners and asso- ciates of the Firm. Remuneration received by a Partner from writing, teaching, or lecturing, from acting as an officer, director, trustee, or executor, or from other personal service activities unrelated to the practice of law shall not be included in his "gross fees". Such remuneration for non- legal services shall belong exclusively to the Partner who performs such services in his individual capacity as an officer, director, trustee, teacher, etc. and not to the Firm or any other Partner thereof. 2.02 "General operating expenses" shall include all of the costs connected with the operation of the Firm other than the agreed draws of the Partners and profit sharing bonuses to employees. 2.03 "Formula draw"is the draw agreed upon by the Partners for purposes of this Schedule B. 2.04 - 2 - (a) Reserve Fund "A" shall consist of (l) the total for- mula profit of all associates (treated as one entity) or i° of the associates' total gross fees, whichever is less; (2) the work credit, if any, of the associates; (3) client credit allocated to the Firm; (4) miscellaneous income; and (5) any other amounts hereinafter specified. (b) Reserve Fund "B" shall be created by setting aside a reserve of f° from the gross fees of each Partner, provided, however, that if the "actual profit" of a Partner, as defined in paragraph 7.01, is less than % of his gross fees, then such lesser amount shall be contributed to Reserve Fund "B". 2.05 "Total costs" for formula purposes shall be the sum of general operating expenses, formula draws, and the amount set aside as reserve fund "B" . 2.0 6 "Formula profit or loss" is the difference between gross fees and total costs and will be computed for each Partner individually and for the associates as a group. The litiga- tion associates in the office shall be assumed, in the absence of time sheets, to earn fair and reasonable gross fees as determined by the Policy Committee with the approval of the majority of the Partners. The remainder of the fees of the litigation department, in the absence of time sheets, shall be credited to litigation Partners. 2.07 (a) The "participation" of each Partner for services rendered shall be the sum of the following items: (l) Work credit 2) Client credit 3) Share of Reserve Fund "A" after reductions as herein provided (4) Contribution to Reserve Fund "B" after re- ductions (if any), as herein provided ( 5 ) Formula draw ("b) Reserve funds "A" and "B" shall be reduced by: - 3 - 1) Associate losses 2) Adjustments 3) Profit sharing "bonuses to associates It is understood that reductions shall first be made in Reserve Fund "A" to the extent thereof and only thereafter, if necessary, from Reserve Fund "B". (c) Each Partner shall share equally in the residue, if any, of Reserve Fund "A", remaining after the reductions herein provided. Each Partner shall share in Reserve Fund "B" in the same proportion that his gross fees hear to the total gross fees of all the Partners in the Firm. 2.08 Since the "gross fees" of the Firm will necessarily be reduced by the fact that a Partner devotes his time to non- legal activities, it would be unjust to grant him a "parti- cipation" on the same basis as other Partners who devote their full time to the performance of legal services on behalf of the Firm. Therefore, he shall receive a reduced "participation" which shall be calculated in the following manner: (a) an amount equal to the payments received by him for the performance of the non-legal services described in paragraph 2.01 shall be added to his "gross fees" solely for the purpose of calcu- lating what his "participation" would have been, had such remuneration been received by him for legal services performed in behalf of the Firm, without thereby implying that the Firm acquires any right, title or interest in said payments; (b) an amount equal to the aforesaid payments for non-legal services shall then be subtracted from the participation determined in accordance with sub-part (a), above, and with the other rules set forth in this Schedule B; (c) his "participation" shall be equal to the net amount determined in accordance with sub-paragraph (b) of this paragraph. Within 30 days after receipt by a Partner of a payment for any of the aforesaid non-legal services, he shall notify the Firm respecting the date of receipt and the amount of the payment, as well as the type of service performed. - 4 - 2.09 The "net participation" of any Partner shall be the amount of his participation less his agreed drawings. 2.10 The "work credit" of any Partner shall be one-half of his formula profit or loss. 2.11 The "client credit" shall be computed separately for each office of the Firm, except that the offices in the United States will be treated as a single entity for the effects of this computation in order to avoid excessive accounting costs. Said computation will be made as follows: (a) The client ownership credit attributable to each Partner or to the Firm will be determined in accordance with the rules set forth in Schedule C. (b) The total "client credits" of each office will be determined by taking one-half of the formula profit of each office. (c) The "client credit" allocated to each Partner or to the Firm, will be determined by taking the total gross fees collected by each office from the clients for which the respective Partner or the Firm has the client ownership credit and computing the percentage that said sum bears to the total gross fees collected by the office. (d) The percentage computed for each Partner or the Firm will be multiplied by the total "client credits", as defined in sub-paragraph (b) above, and the product shall be given to the Partner or the Firm as individual client credit. The purpose of this method of computing client credit is to equalize the client credit in each office of the Firm re- gardless of who works on the client in question. 3.00 The gross fees of each lawyer shall be determined at the end of each fiscal year. 3.01 When a flat fee charged on a particular matter is greater or less than the product of the lawyer's suggested - 5 - hourly billing rate times the number of hours spent on the matter, or if there is a yearly retainer on which no over- billing is allowed, the fee will be divided, by mutual agreement among the lawyers working on the matter, taking into consideration the number of hours spent by each lawyer and their respective hourly billing rates. If no agreement can be reached, the matter shall be referred to the Policy Committee. 3.02 Fees for work performed by all associates will be added together and shown separately from the Partners' fees. The work credit or the "actual loss" of associates, as defined in paragraph 7.01, will be added to or deducted from the Reserve Funds. If the fees of an associate are to be reduced by more than % below an amount equal to the product of the number of hours spent by him on any matter times his suggested billing rate, the bill must be submitted to the Policy Com- mittee for review and the latter is empowered to reallocate the fees in the event it finds the allocation to be unfair. Prior to the date that the client is billed, the Partner responsible for the billing must discuss with all other Partners whose time is included in the bill any re- duction which effectively reduces the hourly billing rate of the Partners concerned. Where a flat fee is billed other than on the basis described above, the prior approval of the Partners concerned must also be obtained if they effectively receive less than their suggested hourly billing rate for the time spent by them on the matter. 4.00 In order to determine as nearly as possible the actual costs of each lawyer, the total costs of each office of the Firm shall be determined and allocated to each Partner and associate in the office on as fairand objective a basis as possible. The following allocation of costs shall be em- ployed by all offices of the Firm, except that the majority of the Partners in any particular office may modify the rules set forth below subject to the prior approval of the Policy Committee. (a) Direct — certain expenses may be incurred indi- vidually by each lawyer or may otherwise be directly determined. For example, each lawyer will be charged with the postage he uses. - 6 - (b) Even — each lawyer, including associates, bears his per capita share of costs shared on this basis. For example, if there are 25 lawyers, each will bear 1/25 of an expense to be borne on an even basis, (c) Number of secretaries (abbreviated hereafter as No. of S. ) - Lawyers who have only one secretary share on a 2 to 2 basis. Those having two secre- taries share on a 3 to 2 basis; those having 3 secretaries share on a 4 to 2 basis, etc. Those using the pool carry a fractional share which de- pends upon the amount of time the pool girl is used. For example, if, in addition to his full- time secretary, a lawyer uses a pool girl l/2 of the time, he would share on a 2-1/2 to 2 basis compared to those using only one secretary. (d) Percentage of last year's participation of the lawyer to the whole of last year's distribution (abbreviated hereafter as % of Part.) - This percentage is computed using a man's total parti- cipation and includes draw plus the end-of-the- year distribution. In the case of a new lawyer, his agreed draw or salary will be used in place of the prior year' s participation. 4.01 The following types of expenses will be borne by the lawyers in each office as indicated: Expenses 1. Draws (For formula purposes) 2. Associates salaries 3. Secretaries salaries 4. Pool Secretaries salaries 5. General Administrative salaries (all non-lawyer personnel other than secretaries) 6. Old Age Benefits and Unemployment 7. Rent Basis Direct Direct (among asso- ciates only) Direct Direct (based on time records kept by the secretary) Even Direct (on the basis of salaries paid) Direct (on the basis of square footage of each lawyer' s office and that of his secretary or secretaries) - 7 Expenses 8. Rent for Common Space 9 . Po stage 10. Dues and subscriptions 11. Electricity 12. Office Expense 13. Office supplies 14. Maintenance 15. Telephone 16. Group Life and Travel Insurance - Lawyers 17. Other Insurance Workmen's Comp., etc. 18. Depreciation of Remodeling 19. Depreciation of Office Machinery, etc. 20. Accounting 21. Legal 22. Books 23. Promotion and Entertainment Basis Even Direct Direct No. of S. No. of S. No. of S. No. of S. No. of S. Direct No. of S. $> of Part. No. of S. fo of Part. (Associates not included) i° of Part. (Associates not included) Even % of Part. 4.02 . The expenses incurred by the Firm in connection with the general meetings of the Partnership (including travel, food and lodging of Partners, cost of space for meeting, etc.) shall be shared equally by all Partners. Each office of the Firm shall submit to the secretary of the Policy Committee in , , prior to of each year an itemized list of all such expenses incurred by the Partners based in the respective office during the fiscal year ending on said date. The accounting department in the office shall then calculate the total expenses incurred by the Firm for this purpose and shall allocate such expenses among the Partners in the manner described above. The aforesaid expenses of each Partner shall then be included in each Partner's costs. The expenses incurred by those Partners attending local or area Partnership meetings shall be shared equally among all the Partners of the office or offices concerned. Said expenses shall also be included in the costs of each Partner based in the office or offices concerned. - 8 - 4.03 Associate bonuses shall be charged directly to the costs of the associate receiving such bonus. However, profit sharing "bonuses granted to associates will be charged to the Reserve Funds. Profit sharing bonuses to associates are only those bonuses which are determined on the basis of this formula or on a percentage participation in the Reserve Funds or in the formula profit of the Firm. 3.00 The Partnership will have two categories of draws: First, a formula draw, as defined above, which is the basis upon which each Partner's participation is computed. Second, there will be an agreed draw which will be the amount agreed upon by the annual meeting of the Partners as the amount each Partner may draw monthly. A penalty equal to per cent ( i°) of the average annual balance of amounts drawn over and above the formula draw will be deducted from the client credit, work credit, or share of Reserve Fund "B" of any Partner receiving said overdraw and will be added to Reserve Fund "A". However, the Policy Committee with the approval of the majority of the Partners may, in special cases, exempt Partners re- ceiving said overdraw from said penalty. 6.00 An upward adjustment shall be made in each Partner's participation equal to per cent ( %) per annum on the amount of any distribution left with the Firm or other sums lent to the Firm, provided however that in the judgement of the Policy Committee such sums are required by the firm. Said upward adjustment shall be deducted from the Reserve Funds. A downward adjustment in a Partner' s participation shall be made if he does not contribute the capital called for by the Articles of Partnership. Said Adjustment, which shall equal _. per cent ( $) per year on the deficiency, shall "be deducted from the Partner's work credit or client credit and shall be added to Reserve Fund "A". The schedule for the payment of capital to the Firm by a new Partners shall be as follows: Zero up to the end of the first fiscal year; one- third during the second fiscal year; one-third during the third fiscal; and the remainder during the fourth fiscal year. The Policy Committee with the approval of the majority of the Partners may in special cases extend the time required for payment of capital into the Firm by a new Partner. A new Partner shall have until of each fiscal year in which to pay in his required capital. The f° penalty on capital not paid in shall accrue from of each such fiscal year. - 9 - 7.00 FORMULA DRAWS The formula draw is guaranteed to the individual Partner provided the Firm has a net profit sufficient to cover all costs and all formula draws. If such is not the case, formula draws shall he reduced pro-rata, In such event, the deficit of each Partner shall be charged against his capital. 7.01 PARTNER'S LOSS In the event that a Partner does not have sufficient fees to cover his draw, operating expenses, and the amount to be set aside for Reserve Fund "B", his contribution to Reserve Fund "B" shall be limited to -.his "Actual Profit". If he has an "Actual Loss", then the loss first shall be charged to his client credit, if any, and if he does not have sufficient client credit for this purpose, the loss shall be charged to the Reserve Funds. If the Reserve Funds are not sufficient to cover his "actual loss", said loss shall be charged to his capital account. If his capital is insufficient to cover his "actual loss", then said loss shall be charged to the net participations of the remaining Partners on a pro-rata basis. For the purposes of this Schedule "B", "actual profit or loss" is defined as the difference between (l) the gross fees of the individual Partner concerned and (2) the sum of his general operating expenses and formula draw. SCHEDULE C RULES FOR DETERMINING CLIENT CREDIT —to — .i.i,» J tr 1. A Partner will be considered responsible for acquiring a client if: A. There is direct personal contact, meaning: (1) an acquaintance, friend or relative or anyone referred by same; (2) through membership in clubs, associations or fraternal organizations; (3) a client previously acquired by a Partner,. who works with that client, refers another client to the Firm or any attorney in the Firm; (4) one exception to (3) occurs when a Partner acquires a client by any method and assigns another attorney or other attorneys to perform the work. Subsequent clients secured through the first client will be Firm clients, unless it is shown that the primary motivating reason for the acquisition of the client was an individual' s efforts, in which case the Policy Committee may apportion the client credit to the individual to the extent of not more than 50$; (5) a client is referred directly to a Partner from another non-Firm attorney. B. There is the following indirect personal contact: (1) a client is acquired through law review articles or other publications, where such acquisition is through direct results of said article; (2) a client is acquired through a speech where such acquisition is through the direct result of the speech. 2. Firm business shall be a client acquired in the following manner: A. Through the reputation of the Firm, or through the collective and/or cumulative effort of two or more members of the Firm, referred by a bank, accounting firm, trust company, association other - 2 - than one in which an attorney has membership, but including all Bar Associations, or through consulates or governmental agencies of any kind. B. Cases received from the following insurance companies: 3. In those instances where two or more members of the Firm consciously join in the production of a client not emanating from a Firm source, when such combination occurs in advance of acquiring the client, the Policy Commit- tee may divide the production credit between the members.