SHAREHOLDERS AGREEMENT
This Shareholders Agreement (the "Agreement") is entered into as of [Effective Date] (the "Effective Date"), by and among:
[Company], a corporation ("Company"),
[Shareholder 1], a corporation ("Shareholder 1"),
[Shareholder 2], a corporation ("Shareholder 2").
The shareholders and the company agree how the company is governed and how shares may be transferred. This Agreement sits alongside the company's charter and bylaws. If they conflict, the charter controls.
1. Ownership. The shareholdings this Agreement addresses are in the table below. Percentages are as the parties state them as of the Effective Date. This Agreement does not issue shares.
Shareholder | Ownership
[Shareholder 1] | [percent]
[Shareholder 2] | [percent]
2. Board and voting. The board is constituted as the charter and bylaws provide. Shareholders vote their shares as the law and the charter require. A new shareholder may not take shares unless they sign a joinder to this Agreement.
3. Major decisions. The board runs ordinary business. The company will not, without the consent of shareholders holding a majority of the shares, sell the company or substantially all of its assets, issue shares other than under an approved option plan, or incur debt outside the ordinary course.
4. Information. The company will send each shareholder annual financial statements within 90 days after year end, and will not unreasonably withhold other information a shareholder needs to understand the business, subject to confidentiality.
5. Transfers. A shareholder who wants to sell shares to an outsider must first offer them to the company and the other shareholders on the same price and terms. They have 20 days to accept. Shares not taken may be sold to that outsider within 60 days on terms no better for the buyer. A transfer that does not follow this section is void as against the company. Permitted transfers to a controlled entity or estate still require the recipient to be bound by this Agreement.
6. Sales of the company. If shareholders holding a majority of the shares sell control, each other shareholder may sell their shares in that sale on the same terms (tag-along). Those majority holders may also require every shareholder to sell in a sale of the company on the same terms (drag-along), if the price is paid in cash or in freely tradable securities.
7. Departure and deadlock. If a shareholder who works for the company leaves, any vesting or repurchase terms in their equity grant still apply. This Agreement does not replace those grant documents. If the shareholders deadlock on a reserved matter for 30 days, any shareholder may offer to buy another's shares at a stated price, and the other may accept or buy the offeror's shares at that price.
8. Governing Law. This Agreement is governed by the laws of Delaware, without regard to conflict of laws principles. Any legal suit, action, or proceeding relating to this Agreement must be instituted in the state or federal courts located in Delaware, and each Party irrevocably submits to the exclusive jurisdiction of those courts.
9. General. This Agreement is the entire agreement on its subject. It may be amended only in a writing signed by the Parties, and it may be signed in counterparts, including electronic copies. If a part is unenforceable, the rest stays in effect.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
Company: [Company]
By: ________________________________
Name: [Signatory]
Title: [Title]
Shareholder 1: [Shareholder 1]
By: ________________________________
Name: [Signatory]
Title: [Title]
Shareholder 2: [Shareholder 2]
By: ________________________________
Name: [Signatory]
Title: [Title]
