Shareholder Contract
This Shareholder Contract ("Contract") is entered into on [Date], between [Your Company Name], a corporation organized and existing under the laws of [Jurisdiction] ("Company"), and the undersigned shareholders ("Shareholders"), collectively referred to as the "Parties."
1. Purpose of Contract
This Contract establishes the rights and obligations of the Shareholders regarding decision-making processes, voting rights, and management of the Company.
2. Share Ownership
2.1 Number of Shares
Each Shareholder's ownership interest in the Company shall be represented by the number of shares outlined in the Company's records.
2.2 Class of Shares
The shares held by each Shareholder shall be designated as common shares.
2.3 Transferability of Shares
Shares may not be transferred without the prior written consent of a majority of the Shareholders.
2.4 Rights and Obligations Attached to Shares
Each Shareholder shall have the right to vote on matters requiring shareholder approval and shall be entitled to receive dividends declared by the Company in proportion to their share ownership.
3. Shareholder Rights and Responsibilities
3.1 Voting Rights
Each Shareholder shall have voting rights in proportion to their share ownership on matters requiring shareholder approval.
3.2 Dividend Entitlement
Shareholders shall be entitled to receive dividends declared by the Company under the Company's dividend policy.
3.3 Information Rights
Shareholders shall have the right to access certain Company information as provided by law or as otherwise agreed upon by the Parties.
3.4 Participation in Meetings
Shareholders shall have the right to participate in meetings of the Company's shareholders.
4. Management and Decision Making
4.1 Board of Directors Composition
The Board of Directors shall consist of five directors, elected by the Shareholders under the Company's bylaws.
4.2 Decision-Making Procedures
Decisions of the Board of Directors shall be made by a majority vote, except for matters requiring a higher threshold as outlined in this Contract or the Company's bylaws.
4.3 Reserved Matters
Certain matters shall require the approval of 75% of the Shareholders.
5. Transfer of Shares
5.1 Restrictions on Transfer
Shares may not be transferred without the prior written consent of a majority of the Shareholders.
5.2 Right of First Refusal
In the event of a proposed transfer of shares, the Company and/or the remaining Shareholders shall have the right of first refusal to purchase such shares on the same terms and conditions offered to the third-party purchaser.
5.3 Transfer Procedure
Any proposed transfer of shares shall be subject to specified procedures agreed upon by the Shareholders.
6. Termination
6.1 Events Triggering Termination
This Contract shall terminate upon the occurrence of any of the events specified by the Parties.
6.2 Consequences of Termination
Upon termination of this Contract, the Parties shall liquidate the Company and distribute the proceeds to the Shareholders in proportion to their share ownership.
7. Confidentiality
7.1 Protection of Confidential Information
Shareholders shall maintain the confidentiality of all proprietary and confidential information of the Company.
7.2 Non-Disclosure Obligations
Shareholders shall not disclose any confidential information of the Company to any third party without the prior written consent of the Company.
8. Dispute Resolution
8.1 Mediation
Any dispute arising out of or relating to this Contract shall first be subject to mediation by a mutually agreed-upon mediator.
8.2 Arbitration
If mediation fails to resolve the dispute, the Parties agree to submit the dispute to binding arbitration under the rules of [Arbitration Institution].
8.3 Governing Law and Jurisdiction
This Contract shall be governed by and construed under the laws of [Jurisdiction]. Any legal action arising out of or relating to this Contract shall be brought in the courts of [Jurisdiction].
9. Miscellaneous Provisions
9.1 Amendments
This Contract may only be amended in writing and signed by all Parties hereto.
9.2 Entire Agreement
This Contract constitutes the entire agreement between the Parties to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether oral or written.
9.3 Severability
If any provision of this Contract is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
9.4 Notices
Any notices required or permitted to be given under this Contract shall be in writing and shall be deemed given when delivered personally or sent by certified mail, return receipt requested, to the addresses specified herein.
10. Signatures
This Contract may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute the same instrument. This Contract shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.
[Your Name]
[Date Signed]
[Shareholders Name 1]
[Date Signed]
[Shareholders Name 2]
[Date Signed]
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