SIMPLE
SHAREHOLDER AGREEMENT
STATE
OF __________________
COUNTY
OF ________________
SHAREHOLDER
AGREEMENT
THIS
AGREEMENT is made and entered into this _______ day of _______________, by and
between _________________________________________________ (Name of Corporation),
a ______________________ (State)
Corporation, whose principal offices are located at ___________________________________________________
(Address), and the individuals
and entities whose names and addresses are listed on Exhibit A attached hereto
and made a part hereof, all of whom are shareholders of the Corporation.
W I T N E S S E T H:
WHEREAS,
the present distribution of shares of the Corporation is as follows:
Name Shares
___________________________________ _____________________
___________________________________ _____________________
___________________________________ _____________________; and
WHEREAS,
the parties have agreed that to promote the good conduct of the Corporation and
avoid the difficulties that might result from the passing of shares to
outsiders, it is desirable to make this Agreement concerning the conduct of the
Corporation and restrictions upon the transfer of its shares;
NOW,
THEREFORE, in consideration of the promises herein made to one another, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. (a)
The Corporation shall have _____ (___) (number) directors; and each
shareholder shall, so long as he owns shares in the Corporation, have the right
to serve as a director of the Corporation or to designate some responsible
person to serve as his nominee.
(b) The officers of the Corporation shall be the
following shareholders, each of whom shall continue to serve as long as he owns
shares:
President ________________________________________
Vice
President ________________________________________
Treasurer ________________________________________
Secretary ________________________________________
(c) The Corporation shall employ shareholders
and pay salaries to such shareholders as follows:
Name
and Address of Shareholder Salary
Amount
___________________________________ _____________________
___________________________________ _____________________
___________________________________ _____________________
___________________________________ _____________________
The
directors of the Corporation may increase salaries of shareholder/employees
from time to time, provided, however that the compensation paid to each
shareholder or employee during each calendar year for his services shall be
equal to the compensation paid to each of the other shareholders during such
calendar year unless otherwise unanimously agreed by the shareholders or by a
written consent signed by all the directors of the Corporation and inserted in
the corporate minute book.
2. (a)
The Corporation will not, without the unanimous consent of all the
shareholders, do any of the following:(i) issue additional shares of any class
or any securities convertible into shares of any class;(ii) merge or
participate in a share exchange with any other Corporation; or (iii) sell, lease, mortgage, or otherwise transfer
all or substantially all of the assets of the Corporation for any consideration
other than cash.
(b) In the event the shareholders agree to issue
additional shares or securities convertible into shares, then each of the
shareholders shall have the right to purchase any such securities so offered at
a future date in proportion to his then respective interest in the Corporation
at the time of such offer.
3. No shares shall be voluntarily sold,
pledged, hypothecated, or otherwise transferred or permitted to be transferred
in any manner or by any means whatsoever except as follows:
Any
shareholder intending to transfer any shares, shall first offer such shares for
sale at the Purchase Value as hereinafter defined to the Corporation for a
period of thirty (30) days, and then, to the extent such offer is rejected or
not accepted by the Corporation within that period, such shares have been
offered for sale at the Purchase Value for a period of ten (10) days to all
other shareholders in proportion to the number of such shares held by
them. Each such offer shall be in
writing and shall specify the number of shares being offered, the name and
address of each person to whom such shares are proposed to be transferred, and
the price per share and other terms upon which each such transfer is intended
to be made; and each such offer may be accepted by the offeree in whole or in
part at any time during the continuance of the offer. If any shares are not purchased pursuant to the aforesaid offers,
the Offeror shall for a period of ninety (90) days thereafter be free to
transfer such shares to the person or person so named at the price per share
and upon the other terms so named; provided that any such transferee of those
shares shall thereafter be bound by all of the provisions of this
Agreement.
4. (a)
Upon the happening of any of the events enumerated below, the
Corporation shall purchase at Purchase Value as hereinafter defined all of the
shares of the shareholder so affected:
(i) If any shareholder employed by the Corporation under Paragraph 1(c)
shall terminate his employment for any cause or reason, including, but not
limited to, loss of any license or certificate required for his conduct of the
business or disability lasting more than six (6) months; or (ii) If any shareholder shall be adjudged
incompetent or a general guardian or guardian of his estate shall be appointed
for him by any court; or (iii) If any
shareholder makes any assignment for the benefit of creditors or applies for
the appointment of a trustee, a liquidator, or a receiver, or commences any
proceeding related to himself under any bankruptcy or arrangement of similar
law; or if any such application is filed or proceedings commenced against the
shareholder and the shareholder consents thereto or an order is entered
allowing such application and remains in effect for sixty (60) days; or (iv) If the shares of any shareholder are
purported to be transferred involuntarily, including, without limitation, any
purported transfer by or pursuant to bankruptcy, attachment, divorce, equitable
distribution, or operation of law; or (v) If any shareholder shall die.
(b) This duty to purchase or retire shall apply
to all, but not less than all of the shares, and shall be exercised by the
Corporation by serving written notice upon such shareholder or such
shareholder's legal representative within thirty (30) days after the
Corporation receives notice of the occurrence of such event or the
qualification of such legal representative, whichever is later.
5. With regard to Paragraph 3, the Purchase
Value shall mean the price per share and other terms upon which a shareholder
is entitled to transfer his shares as shown in a bona fide offer to purchase.
6. (a)
Whenever under this Agreement the Corporation or the shareholders
exercise any option or right to redeem or purchase shares of any shareholder,
the Purchase Value shall be paid to the shareholder whose shares have been
redeemed or purchased in cash within thirty (30) days after notice to the affected
shareholder.
(b) Whenever under this Agreement the
Corporation or the shareholders exercise any option or right to redeem or
purchase shares of any shareholder, the Purchase Value shall be paid immediately upon the receipt by the
Corporation of the proceeds of any insurance on the life of a deceased
shareholder owned by and payable to the Corporation, to the extent of such
proceeds.
7. (a)
If, under the terms of this Agreement, the shares of the shareholders
are purchased or retired, such shareholder, or the legal representative of such
shareholder, shall execute and deliver all necessary documents that may be
reasonably required for accomplishing a complete transfer of such shares for
the purpose of the purchase transaction.
(b) Every transferee of restricted shares that
are transferred in accordance with the provisions of this Agreement shall be
deemed a shareholder and be bound by all of the provisions of this
Agreement. Any purported or attempted
transfer of restricted shares that does not comply with the provisions of this
Agreement shall be null and void and the purported transferee shall not be
deemed to be a shareholder of the Corporation and shall not be entitled to
receive a stock certificate or any dividends or other distributions on or with
respect to such restricted shares. For
the purposes of this Agreement, a purported transfer of shares that causes such
shares to be subject to an option under Paragraph 4 shall be deemed to comply
with the provisions of this Agreement only after the expiration of such
option.
8. This Agreement shall terminate and all
rights and obligations hereunder shall cease upon the happening of any one of
the following events:
(a) The adjudication of the Corporation as
bankrupt, the execution by it of any assignment for the benefit of creditors,
or the appointment of a receiver for the Corporation;
(b) The voluntary or involuntary dissolution of
the Corporation;
(c) By a written Agreement signed by all the
shareholders to terminate this Agreement.
9.
If the Corporation reasonably
determines that any proposed transferee is not eligible as a shareholder of a
Subchapter S Corporation or that such transfer would cause the Corporation to
lose its qualification as a Subchapter S Corporation, then the Corporation may
so notify the shareholder of that determination and thereby forbid the
consummation of the transfer. Nothing
in this paragraph, however, shall preclude the Corporation's and the
shareholders' rights of refusal under this Agreement.
10. The certificates for shares subject hereto
shall be surrendered to the Corporation and endorsed as follows:
"The
shares represented by this certificate are subject to and are transferable only
on compliance with a Shareholders Agreement dated the ______ day of _________________,
among shareholders, a copy of which is on file in the office of the Secretary
of the Corporation."
11. Whenever under this Agreement notice is
required to be given, it shall be given in writing served in person or by
registered mail, return receipt requested, and it shall be deemed to have been
given upon personal delivery or on the date notice is posted.
12. This Agreement embodies the entire
representations, Agreements and conditions in relation to the subject matter
hereof and no representations, understandings or Agreements, oral or otherwise,
in relation thereto exist between the parties except as herein expressly set
forth. The Agreement may not be amended
or terminated orally but only as expressly provided herein or by an instrument
in writing duly executed by the parties hereto.
13. This Agreement and the various rights and
obligations arising hereunder shall inure only to the benefit of and be binding
upon the parties hereto and their respective heirs, successors and assigns.
14. The invalidity or unenforceability of any
term or provision of this Agreement or the non-application of such term or
provision to any person or circumstance shall not impair or affect the
remainder of this Agreement, and its application to other persons and
circumstances and the remaining terms and provisions hereof shall not be
invalidated but shall remain in full force and effect.
15. Whenever in this Agreement any pronoun is
used in reference to any shareholder, purchaser or other person or entity,
natural or otherwise, the singular shall include the plural, and the masculine
shall include the feminine or the neuter, as required by context.
16. This Agreement shall be governed by and
construed in accordance with the laws of the State of _________________.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement the date and
place first above mentioned.
__________________________________________________
(Name of Corporation)
By: _____________________________
__________________________________
President
__________________________________(SEAL)
__________________________________
Shareholder
__________________________________(SEAL)
__________________________________
Shareholder
