Company: SDHC
Filing Date: 2025-04-23
Form Type: DEF 14A
Source: 0001982518-25-000012
Chunk: 53

Company: Smith Douglas Homes Corp.
Filing Date: 2025-04-23
Form: DEF 14A
Chunk 53
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ests directly from Smith Douglas Holdings LLC and from each Continuing Equity Owner. The Continuing Equity Owners, who are Founder Fund and GSB Holdings, may exchange at each of their respective options, in whole or in part from time to time, their LLC Interests, as applicable, for, at our election (determined solely by our independent directors (within the meaning of the NYSE rules) who are disinterested), cash or newly-issued shares of our Class A common stock as described in — Smith Douglas LLC Agreement . Thomas L. Bradbury, our Executive Chairman of the Board, is co-trustee of Founder Fund and Gregory S. Bennett, our President, Chief Executive Officer, and Vice Chairman of our Board, is sole member and manager of GSB Holdings. As a result of our organizational structure, Smith Douglas Homes Corp. expects to obtain (i) an allocable share (and increases thereto) of existing tax basis in Smith Douglas Holdings LLC’s assets and tax basis adjustments with respect to such assets resulting from (a) Smith Douglas Homes Corp.’s purchase of LLC Interests from Smith Douglas Holdings LLC and each Continuing Equity Owner in connection with the Transactions, as described under Certain Definitions—The Transactio n (b) any future redemptions or exchanges of LLC Interests from the Continuing Equity Owners as described under — Smith Douglas LLC Agreement , (c) certain distributions (or deemed distributions) by Smith Douglas Holdings LLC, and (d) payments made under the Tax Receivable Agreement; and (ii) certain tax benefits (such as interest deductions) arising from payments made under the Tax Receivable Agreement. We treat any redemption or exchange of LLC Interests for our Class A stock or our cash as our direct purchase of LLC Interests from the Continuing Equity Owners for U.S. federal income and other applicable tax purposes, regardless of whether such LLC Interests are surrendered by the Continuing Equity Owners to Smith Douglas Holdings LLC for redemption or sold to us upon the exercise of our election to acquire such LLC Interests directly. Moreover, the application of the principles of Section 704(c) of the Code and the U.S. Treasury regulations issued thereunder require that items of income, gain, loss and deduction attributable to property owned by Smith Douglas Holdings LLC on the date that we purchased LLC Interests directly from Smith Douglas Holdings LLC with a portion of the IPO proceeds must be allocated among the members of Smith Douglas Holdings LLC to take into account the difference between the fair market value and the adjusted tax basis of such assets on such date.