Markup Management Rollover Agreement

---
name: markup-management-rollover-agreement
task_id: corporate-ma/markup-management-rollover-agreement
description: Guides management-side redline of a sponsor-drafted rollover agreement using a firm playbook and markup instructions, with a prioritized cover memo explaining each proposed change at a category level.
activates_for: [planner, solver, checker]
---

# Skill: Management-Side Rollover Agreement Markup

## 1. Subject-matter triage
- Treat the rollover agreement as one component of a broader PE-backed LBO package.
- First confirm the agreement’s economic mechanics, governance terms, and transfer mechanics are directionally consistent with the transaction summary, cap table, and related equity documents.
- If the source set contains multiple equity holders, tranches, classes, or rollover cohorts, enumerate them before drafting so each receives the correct treatment.
- Flag any internal inconsistency between the draft and the transaction architecture before making provision-level edits.

## 2. Failure modes the skill is correcting
- The redline changes isolated provisions without first checking whether the rollover economics and equity structure fit together across the transaction materials.
- Departure-based forfeiture language is narrowed or expanded without aligning the corresponding purchase-price mechanics for different separation scenarios.
- The cover memo lists edits but does not explain the commercial rationale from the rolling manager’s perspective, reducing its negotiation value.
- Call option pricing is adjusted without distinguishing among trigger events that may warrant different market-standard price frameworks.
- Vesting, acceleration, transfer restrictions, and dilution protection are reviewed in a vacuum instead of as an integrated equity package.
- Markup comments are descriptive only and do not tell the counterparty what change is sought and why it matters.
- The redline is rendered only through visual styling, making it brittle in document conversion or downstream review.

## 3. Legal frameworks / domain conventions that apply
- Management-side rollover markup typically protects the rolling participant’s economic participation, governance posture, liquidity position, and exit economics.
- Good leaver / bad leaver architecture should be tested for trigger precision, pricing symmetry, and consistency with departure-based forfeiture mechanics.
- Call option provisions should be checked for trigger-specific pricing, exercise mechanics, and consistency with analogous leaver or drag provisions.
- Vesting and acceleration terms should be reviewed for change-in-control, IPO, termination, and partial-vesting mechanics where market practice supports them.
- Good reason drafting should be tested against material diminution in compensation, duties, authority, title, reporting line, or location, as applicable in the source set.
- Tag-along, drag-along, transfer restriction, anti-dilution, and preemptive rights provisions should be reviewed as a single liquidity-and-protection package.
- Any legal or market-standard proposition stated in the markup or memo should be tied to the governing authority or practice source reflected in the materials or generally recognized for the asset class.

## 4. Analytical scaffolds
- Read the markup instructions first and extract each specific position, fallback, and priority.
- Read the playbook second and convert each provision-type guideline into a drafting target.
- Read the transaction summary and equity materials third to confirm the relevant holder classes, rollover path, and high-level economics.
- Review the sponsor draft provision by provision and compare each clause to the playbook and instructions.
- For each clause requiring change, decide whether the edit is a deletion, insertion, or substitution, then draft a plain-text markup that survives export.
- Attach a short comment to each substantive edit explaining the commercial reason for the change from the management participant’s perspective.
- Where a clause can vary by trigger, draft separately for each trigger rather than using one generalized pass.
- Where multiple related protections interact, test the combined package rather than treating each clause as independent.
- Prepare the memo after the redline exists, and summarize the changes by priority and business impact rather than by clause order alone.

## 5. Vertical / structural / temporal relationships
- Check how the rollover agreement interacts vertically with the broader LBO structure, including the equity rollover vehicle, sponsor sale mechanics, and any related organizational documents.
- Check how rights and obligations move across time: signing, closing, vesting periods, departure events, equity exit, and post-closing transfer windows.
- Check whether a change in one provision alters the operation of another, especially for leaver definitions, call rights, drag rights, and pricing mechanics.
- If the agreement addresses multiple trigger events, separate them by event and analyze each event’s effect on price, timing, and holder rights.
- If the materials contain more than one cohort or class, treat each cohort separately and confirm whether the same drafting point applies to all of them.

## 6. Output structure conventions
- Produce the redlined rollover agreement first and ensure it is complete before the memo is finalized.
- Use robust plain-text markup for every substantive change, not just visual track changes: identify deletions, insertions, and substitutions explicitly in the text itself.
- Annotate each substantive change with a short bracketed rationale comment that states the business or legal reason for the edit.
- Keep comments concise and category-level; do not turn the markup into a treatise.
- Use a prioritized cover memo that groups issues by urgency or significance, with each entry stating:
  - the issue in high-level terms,
  - the playbook position being applied,
  - the management-side rationale,
  - the recommended revision.
- Include an explicit recommendation section at the end of the memo with action verbs, the responsible role, and a timing anchor tied to the transaction milestone or the source instructions.
- If severity is used in the memo, define the ordinal scale once and apply it consistently to each entry.
- Do not rely on styling alone for changes; the plain-text markup must be sufficient to identify every edit.
- Before finishing, verify that both deliverables are created, non-empty, and contain operative content rather than a summary of what should be done.