The above parties hereinafter collectively referred to as the "Parties" and individually a "Party" has entered into the following shareholders' agreement (the "Shareholder Agreement") regarding the Parties' ownership in COMPANY NAME, VAT-no. NUMBER, a company registered under the laws of COUNTRY (hereinafter the "Company").
1. Background, Parties and purpose
1.1 This Shareholder Agreement intends to govern the Parties mutual rights and obligations as shareholders of the Company, including the Parties' individual contributions and responsibilities.
1.2 Between the Parties, the Shareholder Agreement takes precedence over law, the Company's Articles of Association, any rules of procedure of the Board of Directors, any management instructions and other previous agreements between the Parties on the matters governed by the Shareholder Agreement.
1.3 The Parties shall vote at the general meetings so that the provisions of this Shareholder Agreement are complied with. In the event that any provision of Shareholder Agreement cannot validly be adopted or implemented, the Parties shall, to the extent possible, make or vote for a decision closest to the original intention of the Shareholder Agreement.
1.4 The Parties undertake not to conclude agreements or assume commitments of any kind that can prevent compliance with the provisions of this Shareholder Agreement.
1.5 The Parties undertake to act in good faith towards each other and to contribute constructively to the extent that the Parties may, for the operation of the Company.
1.6 The Parties intends each to contribute to the Company's operations and development. It is presently agreed that:
- A shall be responsible for TASKS, RESPONSIBILITIES ETC.
- B shall be responsible for TASKS, RESPONSIBILITIES ETC.
2. Share capital and ownership
2.1 The Shareholder Agreement covers the Parties' total holdings of shares, stock, equity or any other rights in the Company (hereinafter "Shares"/"the Shares"). If a Party acquires additional Shares in the company - regardless of the actual method – these new shares shall be covered by this Shareholder Agreement.
2.2 By the signing of this Shareholder Agreement the share capital of the Company constitutes nominally AMOUNT divided into Shares of nominally VALUE. Each Share represents X vote(s).
2.3 The Shares are divided as follows:
A: CAPITAL, XX%
B: CAPITAL, XX%
2.4 None of the Shares have special rights.
2.5 The Parties are not required to contribute with additional capital to the Company, to guarantee or similarly secure the Company's obligations.
2.6 The Parties may not pledge its Shares, put its Shares as collateral for liabilities or transferring voting rights on Shares to others without the prior consent of the COMPANY'S BOARD OF DIRECTORS/MANAGEMENT and subject to the provisions of this Shareholder Agreement.
2.7 The Parties each have the right to proportionally sign new Shares by any capital increase of the Company.
2.8 Neither Party can be ordered to sell its Shares as a result of illness.
2.9 In the case A and/or B are holding companies which primary purpose is to hold Shares in the Company, the ultimate owners' NAME and NAME (the "Owners") personally consent to this Shareholder Agreement and undertake the responsibilities wherever suitable.
3. General meetings
3.1 The Parties are entitled and obligated to be represented at the general meetings. Representation may be done by proxy.
3.2 The general assembly can only make decisions if the total Shares represented at the general meeting amounts to XX% (the "Quorum Requirement"). If the Quorum Requirement is not met at a general meeting, a new general meeting must be convened within two weeks with the same agenda. The Quorum Requirement shall not apply to the new general meeting. The COMPANY'S BOARD OF DIRECTORS/MANAGEMENT shall convene the new general meeting.
4. The Board
4.1 The Company's Board of Directors shall consist of at least three board members elected at the general meeting.
4.2 Board decisions shall be conducted with a simple majority vote. The Board of Directors has a quorum when more than half of its members are present. Board meetings are held at least once a month. Notification will be made in writing (including electronically) at least 5 days' notice. All board members must be notified of the board meeting before decisions may validly be taken by the board.
4.3 A board member may not vote regarding contracts or matters in which the member has a personal or material interest that may conflict with the Company. The board member may participate in the examination of the matter and make his views known.
4.4 Members of the board may be represented by proxy if the board member is unable to attend a board meeting. The proxy must be in writing and cannot be given for more than one meeting.
4.5 Board members should be made aware of this section of the Shareholder Agreement.
5.1 The Company's daily management is headed by an executive board of X members elected by the BOARD OF DIRECTORS/GENERAL ASSEMBLY.
5.2 The management shall make decisions in accordance with the Articles of Association and any rules of procedure.
5.3 If the management consists of several members, one of the members must be appointed chief executive officer.
6. Significant decisions
6.1 A decision which is considered essential or significant ("Major Decisions") are the following (however not exhaustive):
6.1.1 Company matters:
- Amendments to the Articles of Association
- Change of the Company's capital (including reductions and increases in share capital)
- Modification of the Rules of Procedure for management or board directors
- Decisions about liquidation, demerger or merger
- Establishing or closing of subsidiaries or branches
- Significant changes in the Company's strategies and business areas
6.1.2 Economic matters:
- Obtaining loans or liabilities not arising from the Company's usual business
- Liabilities by guarantees
- Disposition of the Company's profits
- Amendment and adoption of the Company's budgets or business plans
- Proposal for the Company's auditor
- Amendments to the Company's accounting principles
6.1.3 Contractual matters:
- The purchase, sale or mortgaging of real estate, businesses, companies and similar activities
- Matters exceeding VALUE in value and that are not previously included in the Company's budgets
- Entering into or changes to agreements regarding leases, licenses or other significant contracts
6.1.4 Employment and personal matters:
- Employment or dismissal of senior executives
- The conclusion, modification or termination of agreements between the Company, the Parties and/or owners, including staff contracts, development agreements, cooperation agreements and similar
- Determination of salary or remuneration of the Parties, the owners or any of their relatives
6.1.5 Other conditions:
- Decisions that are not usual, in relation to the Company's ordinary operations, or which otherwise are important for the Company.
6.2 Decisions on matters under the Company matters and Economic matters must be adopted by the general assembly in which at least XX% of the Shares and votes must be in attendance and vote for.
6.3 Decisions on matters under the Contractual matter, Employment and personal matters and Other conditions are taken as far as possible by the BOARD OF DIRECTORS/MANAGEMENT unless conditions or circumstances should require otherwise.
7.1 The Company's dividend policy shall encourage healthy and sound operations of the Company and must be continuously organised after due consideration to the market conditions, competition and trends.
7.2 In case of disagreement, any Party may demand that a dividend of XX% of the Company's profits after tax be distributed proportionally among the Shareholders.
8. Transfer of Shares
8.1 "Transfer of Shares" shall mean situations where the Shares are transferred from one Party to another Party or to a third party, whether this is done fully or partially and whether this occurs by sale, gift, transfer, inheritance or any insolvency proceedings.
8.2 Transfer of Shares is conditional upon the purchaser and any ultimate owner of the Shares adheres to the Shareholder Agreement.
8.3 Transfer of Shares shall also be deemed to include the transfer of shares in Holding Companies. Transfer of shares from Holding Companies must therefore as far as possible follow the provisions of Shareholder Agreement. Transfer of Shares, or shares of a Holding Company, to a company in which a Party is the sole owner or to a Party personally, are not subject to this provision, provided that this company or Party joins the Shareholder Agreement.
8.4 A price for Shares that an accountant calculates, is, in any case, final and cannot form the basis for a dispute, unless it is obvious that the calculation is affected by a material error or conflict of interest.
8.5 Voting rights for Shares can only be transferred with the Shares.
8.6 Right of first refusal
8.6.1 If a Party (the "Selling Party") wishes to sell its Shares in the Company to a Party or third party, the other remaining Parties in the Company (the "Buying Party") has the option to proportionately buy the Selling Party’s Shares. The Selling Party shall inform the Buying Party of who the third Party is and what the conditions of purchase for the Shares are.
8.6.2 If the third party submitted an offer to the Selling Party, the Buying Party shall receive the offer as soon as possible from the Selling Party. If no written offer is made by the third party, the Selling Party must document at what price and conditions, the third party can/will acquire the Shares.
8.6.3 The purchase price of the Buying Party shall then be the price at which the third party can/will acquire the Selling Party’s Shares too.
8.6.4 If there are legitimate objections against the third party's independence and/or ability and/or willingness to acquire the Shares to the specified purchase price, the Buying Party can until 30 days after being informed of the purchase option and purchase price let the Company's auditor (or independent chartered accountant appointed by a proper institute) calculate the purchase price.
8.6.5 Accountant fees are borne by the Company.
8.6.6 The Buying Party must use the right to first refusal within three (3) weeks of receiving the offer, proof of the purchase price or the accountant's calculated price (whichever is the latest). If the Buying Party do not use the right to first refusal before the expiry of that period or announces not to exercise the right to first refusal, the Selling Party is entitled to transfer his Shares to the third party.
8.6.7 The Transfer of Shares shall then be at the price and on the terms specified in the offer or the auditor's calculated price.
8.7 Other transitions
8.7.1 For other types of transitions of the Shares (than the sale/purchase mentioned above), e.g. debt enforcement, suspension of payments, restructuring, bankruptcy and similar situations, and at a Party’s material breach by the Shareholder Agreement, the other Parties shall have the right to proportionally purchase that Party’s Shares in the Company.
8.7.2 If a Party wishes to exercise its option to purchase another Party’s Shares, that Party must inform the other Party (or the Party's representative, for example, a curator or similar trustee) within 30 days after becoming aware of the fact that triggered the option to buy the Shares.
8.7.3 The Party shall also, within 30 days of the deadline, request the Company's auditor (or an independent chartered accountant appointed by a proper institute of chartered accountants) to calculate the purchase price, if that Party so wishes or the Parties disagree on the purchase price.
9.1 If the Parties cannot reach an agreement on matters that requires a certain majority, consensus or otherwise reasonably can categorise a situation as a "dead-lock" situation, the Parties shall proceed in accordance with the following procedure:
9.1.1 The differences must first be resolved by negotiation between the Parties, preferably with the involvement of a lawyer or a third Party as mediator.
9.1.2 Does the above not lead to a solution within two weeks from the first negotiation between the Parties, any of the Parties can then make an offer on the other Parties Shares for up to two weeks. The offer must include all the other Party’s Shares and is subject to cash payment within two weeks after the end of the offer period. Offers must be submitted at an appointed lawyer or the Company's auditor. The Party that makes the offer which indicates the highest price per nominal Share immediately gets the right and obligation to buy the other Parties Shares to the stated price.
9.1.3 Should neither Party make an offer, any of the Parties can require the Company liquidated. In case of disagreement of the liquidator, the appointment of such shall be done by the Company's auditor.
9.2 When in a Dead-lock situation the Parties may not refrain from making decisions or take actions that are necessary to comply with the law, reduce or avoid losses, fines and similar penalty. A Party may on their own carry out such acts if the other Parties do not want to participate after having been informed of the proposed action and the consequences of not carrying out an act.
10.1 Should a Party materially breach or default on its obligations under this Shareholder Agreement or pursuant to any obligations under their employment relationship or other cooperation with the Company and the significant breach is not reasonably rectified within 14 days after the demand for such remedy has been presented to the defaulting Party, the defaulting Party shall be obligated to sell all its Shares in the Company. As a material breach is also considered a Party’s bankruptcy, restructuring proceedings, liquidation or similar insolvency situations.
10.2 The purchase price for the Shares may be determined by the Company’s accountant (or an independent chartered accountant appointed by a proper institute). The purchase price is however reduced by XX%. The defaulting Party shall bear the costs for the auditor.
10.3 The defaulting Party in question must also immediately resign any position or employment in the Company.
10.4 A breach must be invoked against a Party within one month after the Parties are or should have been aware of the facts which underlie the breach. Failure to do so does not render the defaulting conditions justified.
11.1 The Shareholder Agreement is interminable.
11.2 A Party is bound by the Shareholder Agreement, as long as the Party owns or otherwise holds Shares in the Company and as the case may be for certain provisions which by its nature or wording imposes obligations for the Party after the Party is no longer is a Party to the Shareholder Agreement.
12.1 Significantly changes in ownership of the Company as a result of the death of a Party (or the owner of a Party/Holding Company) does not constitute that the estate or heirs are required to transfer or sell Shares in the Company. Heirs or the estate must, however, join the Shareholder Agreement if it wishes to hold its Shares – otherwise, the estate or heirs are obligated to sell its Shares to the Company or the remaining Parties.
12.2 If the estate or heirs shall or wishes to sell its Shares, the other Parties have the right to acquire the Shares at the price for which a third party wants to buy the Shares or at a calculation of a purchase price calculated by the Company’s the accountant (or an independent chartered accountant appointed by a proper institute. The estate or heirs may sell the Shares to a third party, only if the other Parties do not wish to acquire the Shares.
13. Prohibition of competing business
13.1 A shareholder of the Company is not entitled - directly or indirectly - to participate in or otherwise be involved in matters which directly or indirectly compete with the Company.
13.2 The above prohibition on competing business shall continue for a period of XX months after a Party has ceased to be a shareholder in the Company, however not in cases where the Company ceases to exist.
13.3 Violation of the prohibition on competing business shall constitute a fine of AMOUNT AND CURRENCY for the Party. Payment of the penalty does not make the violation legitimate. A violation can be prevented by injunction without collateral and does not exclude the ordinary liability or damages that the Company can seek from the Party.
13.4 The prohibition shall not include businesses, organizations, companies etc., a Party was involved in at the time of entering into the Shareholder Agreement.
14.1 The Parties are bound to secrecy in relation to everything they learn in their capacity as shareholders, board members, directors or employees of the Company. This does not apply to matters that i) under the circumstances must be brought to the knowledge of third parties, ii) is publicly known or publicly available or iii) must be disclosed due to law rules.
15. Intellectual Property Rights
15.1 Intellectual property rights which may arise in connection with the Parties working for or in collaboration with the Company, is transferred automatically without further payment to the Company.
16. Disputes and applicable law
16.1 Any dispute regarding the Shareholder Agreement, or the validity of same, shall be governed by the law of COUNTRY, apart from rules of private international law.
16.2 Disputes between Parties, Owners and/or the Company relating to the Shareholder Agreement or other agreements between the Parties, the owners and/or the Company shall be resolved by mutual negotiation.
16.3 If the dispute cannot be resolved by negotiation, the dispute shall be finally settled by the courts of INSERT COURT.
17. Other matters
17.1 In the Company's shareholder register, it should be noted that the Parties have entered into this Shareholder Agreement.
17.2 The content of this Shareholder Agreement cannot be changed without mutual agreement between the Parties. The Parties shall each year in connection with the Company's annual general meeting discuss whether the Shareholder Agreement should be revised.
17.3 The Shareholder Agreement is binding on the Parties during the period the Parties own Shares in the company, and as the case may be for certain respective provisions also beyond that period.
17.4 The Shareholder Agreement is drawn up in one original copy per owner and one original copy kept by the Company.
17.5 The Company shall bear any costs associated with the creation of a Shareholders' Agreement.
17.6 INSERT OTHER TERMS