Company: SDHC
Filing Date: 2025-04-23
Form Type: DEF 14A
Source: 0001982518-25-000012
Chunk: 62

Company: Smith Douglas Homes Corp.
Filing Date: 2025-04-23
Form: DEF 14A
Chunk 62
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Except for certain exceptions, any transferee of LLC Interests must assume, by operation of law or executing a joinder to the Smith Douglas LLC Agreement, all of the obligations of a transferring member with respect to the transferred units, and such transferee shall be bound by any limitations and obligations under the Smith Douglas LLC Agreement even if the transferee is not admitted as a member of Smith Douglas Holdings LLC. A member shall remain as a member with all rights and obligations until the transferee is accepted as substitute member in accordance with the Smith Douglas LLC Agreement.

Recapitalization . The Smith Douglas LLC Agreement recapitalized the units held by the members of Smith Douglas Holdings LLC prior to the Transactions into a new single class of LLC Interests. The Smith Douglas LLC Agreement also reflected a split of LLC Interests such that one common unit could be acquired with the net proceeds of the IPO from the sale of one share of our Class A common stock, after the deduction of the underwriting discount. Each common unit generally entitled the holder to a pro rata share of the net profits and net losses and distributions of Smith Douglas Holdings LLC.

Maintenance of one-to-one ratio between shares of Class A common stock and LLC Interests owned by us, one-to-one ratio between shares of Class B common stock and LLC Interests owned by the Continuing Equity Owners . The Smith Douglas LLC Agreement requires Smith Douglas Holdings LLC to take all actions with respect to its LLC Interests, including issuances, reclassifications, distributions, divisions or recapitalizations, such that (1) we at all times maintain a ratio of one common unit owned by us, directly or indirectly, for each share of Class A common stock issued and outstanding, and (2) Smith Douglas Holdings LLC at all times maintains (a) a one-to-one ratio between the number of

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shares of Class A common stock issued and outstanding and the number of LLC Interests owned by us, and (b) a one-to-one ratio between the number of shares of Class B common stock issued and owned by the Continuing Equity Owners and their permitted transferees and the number of LLC Interests owned by the Continuing Equity Owners and their permitted transferees. This ratio requirement disregards (1) shares of our Class A common stock under unvested options issued by us, (2) treasury stock and (3) preferred stock or other debt or equity securities (including warrants, options or rights) issued by us that are convertible into or exercisable or