Shareholders Agreement Appointing Director

Download immediately in word format.  Simply download edit, save and reuse as many times as you need.

PRECEDENTS ONLINE

Written by Lawyers

 

ONLINE LEGAL DOCUMENTS

 

 

shareholder agreement

Shareholder Agreement Appointing a Director

A very detailed Shareholders Agreement that allows a shareholder to appoint a director, loans to the company by shareholders, and restricts decision making parameters of executive directors to parameters listed in a schedule to the agreement. Executive directors are required to disclose pre-existing commercial interests and an attached schedule lists issues requiring special majority resolution approval. A very detailed shareholders agreement suitable for large commercial enterprises where there may be one or more large investors who may not have involvement in day to day running of the company. This agreement contemplates many detailed aspects of the running of a company. This agreement contains the following clauses:

  • Conditions Precedent
  • Establishment of the Company and capitalisation
  • Objects of the Company and basic duties of the parties
  • Structure of Company
  • Powers of decision
  • Finance, insurance, records etc
  • Additional obligations, indemnities, and guarantees
  • Share issues
  • Restrictions on transfer of Shares
  • Third party offers
  • Compulsory offer of Shares
  • Confidentiality and announcements
  • Protection of the business
  • Dispute resolution
  • Notices
  • Miscellaneous
  • Definitions and interpretation

29 pages long.

 

 

 

A shareholder agreement is a contract between the shareholders of a company. Without a shareholders agreement, the relationships among  shareholders are regulated by the constitution of the company. Every company has a constitution. Not all companies have a shareholders agreement.

The shareholder agreement works together with the constitution. Shareholders sometimes update or amend the constitution of the company when adopting a shareholders agreement.  A shareholders’ agreement  is  confidential between the parties.

The constitution of  a company may not provide sufficient protection for minority shareholders. Minority shareholders can protect their position by using a shareholders’ agreement.

Shareholders’ agreements vary enormously. In a characteristic joint venture or business start-up, a shareholders’ agreement would normally be expected to cover the following matters:

  • the nature and amount of initial contribution (whether capital contribution or other) to the company
  • the proposed nature of the business
  • how any future capital contributions are to be made
  • regulating the ownership and voting rights of the shares in the company, including
  • restrictions on transferring shares, or granting security interests over shares
  • pre-emption rights and rights of first refusal in relation to any shares issued by the company (often called a buy-sell agreement)
  • “tag-along” and “drag-along” rights
  • minority protection provisions
  • control and management of the company, which may include
  • power for certain shareholders to designate individual for election to the board of directors
  • imposing super-majority voting requirements for “reserved matters” which are of key importance to the parties
  • imposing requirements to provide shareholders with accounts or other information that they might not otherwise be entitled to by law
  • making provision for the resolution of any future disputes between shareholders
  • deadlock provisions
  • dispute resolution provisions
  • the governing law of the shareholders’ agreement
  • allocation of key roles or responsibilities

Glossary

Drag-Along Right assures that if the majority shareholder sells his stake, minority holders are forced to join the deal. This right protects majority shareholders. Drag-along rights are fairly standard terms in a stock purchase agreement. Drag-along rights typically terminate upon an initial public offering.

Tag-along right assures that if the majority shareholder sells his stake, minority holders have the right to join the deal and sell their stake at the same terms and conditions as would apply to the majority shareholder. This right protects minority shareholders. Tag-along rights are fairly standard terms in shareholders agreements.

Precedents

Shareholders Agreement 1

A general shareholder agreement that covers includes an Accession Deed for adding new shareholders at a later time. This agreement contains the following clauses:

  • Definitions
  • Interpretation
  • Structure of the company
  • Objectives of the company
  • Management
  • Agreements between company and shareholders
  • Use of intellectual property
  • Transfers of shareholder’s shares
  • Option to purchase outgoing shareholders shares
  • Power of attorney
  • Publicity and confidentiality
  • Records and accounts
  • Payments and dividends
  • Good faith
  • Dissolution of company
  • Disputes
  • General provisions
  • Execution & schedules
  • Accession Deed

A versatile agreement that can be adapted to suit a wide range of industries. 21 pages long.

Shareholders Agreement 1 – docsonline

Shareholders Agreement 2

A general shareholder agreement that covers initial funding, further funding, appointment of directors, relations between shareholders and disposal of shares. It contains a formula for the pricing and sale of shares. A versatile agreement that can be adapted to suit a wide range of industries. This agreement contains the following clauses:

  • Definitions and Interpretation
  • Conditions Precedent
  • Term
  • Objectives
  • Structure of the Company
  • Board of Directors
  • Decision Making
  • Management
  • Financial Reporting
  • Accounts
  • Funding
  • Agreements Between Company and Shareholders
  • Transfer of Shares
  • Procedure on Transfer of Shares
  • Determination of Sale Price
  • Non-Competition
  • Publicity and Confidentiality
  • Dispute Resolution
  • Acknowledgments and Warranties
  • Termination
  • Default
  • Assignment
  • Counterparts
  • Entire Agreement
  • Further Action
  • Choice of Jurisdiction and Law
  • Non-merger
  • Notices
  • Waiver
  • Variation
  • Costs
  • Paramountcy
  • No Partnership or Agency
  • Severability
  • Conse

 

  • 27 pages long.

Shareholders Agreement 2 – docsonline

Shareholders Agreement 3

A very detailed shareholders agreement that allows a shareholder to appoint a director, loans to the company by shareholders, and restricts decision making parameters of executive directors to parameters listed in a schedule to the agreement. Executive directors are required to disclose pre-existing commercial interests and an attached schedule lists issues requiring special majority resolution approval. A very detailed shareholders agreement suitable for large commercial enterprises where there may be one or more large investors who may not have involvement in day to day running of the company. This agreement contemplates many detailed aspects of the running of a company. This agreement contains the following clauses:

  • Conditions Precedent
  • Establishment of the Company and capitalisation
  • Objects of the Company and basic duties of the parties
  • Structure of Company
  • Powers of decision
  • Finance, insurance, records etc
  • Additional obligations, indemnities, and guarantees
  • Share issues
  • Restrictions on transfer of Shares
  • Third party offers
  • Compulsory offer of Shares
  • Confidentiality and announcements
  • Protection of the business
  • Dispute resolution
  • Notices
  • Miscellaneous
  • Definitions and interpretation

29 pages long.

Shareholders Agreement 3 – docsonline

Shareholders Agreement 4

A standard, general shareholder agreement that covers initial, further funding, appointment of directors, relations between shareholders and disposal of shares. Allows a constitution to be adopted by the company and attached to the agreement. The variable in information is contained in a schedule to the agreement, which makes it quick and easy to adapt to a variety of uses. This agreement contains the following clauses:

 

  • Definitions and Interpretation
  • Establishment of Company
  • Condition Precedent – Agreement to Initial Annual Program
  • Purpose
  • Contributions to Share Capital of the Company
  • Further Financing
  • Guarantees and lndemnities
  • Protection of Business of Company
  • Powers and Responsibilities of Company
  • Functions of the Board
  • Protection of Shareholders
  • Shareholders Not to Interfere
  • Directors
  • Matters Requiring Directors’ Approval
  • Special Resolutions
  • Allotments, Transfers and Encumbrance of Shares
  • Material Breach
  • Rights on Winding Up of Company
  • The Constitution
  • Confidential Information
  • Public Statements
  • Duration
  • Good Faith
  • Time of the Essence
  • No Partnership etc.
  • Mediation
  • Severability
  • Entire Understanding
  • Variation
  • Waiver
  • Further Assurance
  • Costs
  • Notices
  • Governing Law and Jurisdiction

22 pages long.

6 + 12 =

error: Content is protected !!