Startup Shareholder Agreement

This Shareholder Agreement ("Agreement") is made and entered into as of [insert date], by and among the shareholders of [Your Company Name] (“Company”), a limited liability company duly organized and existing under the laws of [Jurisdiction], with its principal place of business located at [Your Company Address] (collectively referred to as the "Parties").

In consideration of the mutual promises and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

A. Definitions

1. "Shareholder": Refers to any individual or entity holding shares in the Company.
   

2. "Board of Directors": Refers to the governing body of the Company responsible for making major decisions and providing strategic guidance.
   

3. "Shares": Refers to the shares of stock in the Company, as defined in the Company's articles of incorporation or operating agreement.
   

B. Share Ownership

1. Initial Share Ownership: Each Shareholder's initial ownership of Shares is as set forth in Schedule A attached hereto.
   

2. Vesting Schedule: If any Shares are subject to vesting, the vesting schedule for such Shares is set forth in Schedule B attached hereto.
   

3. Restrictions on Transfer of Shares: No Shareholder shall transfer, sell, pledge, or otherwise dispose of any Shares, except as provided for in this Agreement. Any transfer of Shares in violation of this provision shall be null and void.
   

C. Shareholder Rights and Obligations

1. Voting Rights: Each Shareholder shall be entitled to vote on matters requiring shareholder approval in proportion to their respective ownership interests in the Company.
   

2. Information Rights: Shareholders shall have the right to access certain information regarding the Company's financial status, operations, and other material matters, as provided for in the Company's bylaws or as otherwise agreed upon by the Shareholders.
   

3. Preemptive Rights: In the event of a new issuance of Shares by the Company, each Shareholder shall have the right to purchase a pro-rata portion of such new Shares, subject to certain limitations and conditions.
   

4. Right of First Refusal: If a Shareholder intends to sell or transfer any Shares, they must first offer such Shares to the other Shareholders on a pro-rata basis, in accordance with the terms and conditions set forth in this Agreement.
   

D. Management and Decision Making

1. Board of Directors Composition and Powers: The Board of Directors shall consist of seven (7) directors, who shall be elected by the Shareholders as provided for in the Company's bylaws. The Board of Directors shall have the authority to make major decisions affecting the Company's business and operations, including but not limited to the appointment of officers, approval of budgets, and declaration of dividends.
   

2. Shareholder Approval Requirements: Certain major decisions, as determined by the Board of Directors or as required by law, shall require the approval of the Shareholders, which may be obtained through a vote at a Shareholder meeting or by written consent in accordance with the Company's bylaws.
   

E. Corporate Governance

1. Procedures for Shareholder Meetings: Shareholder meetings shall be held annually and may also be called by the Board of Directors or by Shareholders holding a specified percentage of voting rights. Notice of Shareholder meetings shall be given in accordance with the provisions of this Agreement and applicable law.
   

2. Quorum and Voting Requirements: A quorum for Shareholder meetings shall be established when Shareholders holding a specified percentage of voting rights are present or represented by proxy. Decisions at Shareholder meetings shall be made by a majority vote, unless otherwise required by law or this Agreement.
   

3. Procedures for Board of Directors Meetings: The Board of Directors shall meet regularly to conduct business and make decisions on behalf of the Company. Notice of Board meetings shall be given in accordance with the Company's bylaws, and decisions shall be made by a majority vote of directors present at the meeting.
   

F. Transfer of Shares

1. Restrictions on Transfer: No Shareholder shall transfer, sell, pledge, or otherwise dispose of any Shares without complying with the provisions of this Agreement. Any attempted transfer of Shares in violation of this Agreement shall be null and void.
   

2. Right of First Refusal: Before a Shareholder may transfer any Shares to a third party, they must first offer such Shares to the other Shareholders on a pro-rata basis, in accordance with the terms and conditions set forth in this Agreement.
   

3. Buy-Sell Agreements: In the event of certain triggering events, such as the death or disability of a Shareholder, the remaining Shareholders shall have the option to purchase the Shares of the departing Shareholder at a specified price and on specified terms.
   

G. Exit Strategy

1. Liquidity Events: In the event of a liquidity event, such as a sale of the Company or an initial public offering (IPO), the Shareholders shall have the right to sell their Shares in accordance with the terms and conditions set forth in this Agreement.
   

2. Drag-Along Rights: In the event a majority of Shareholders agree to sell the Company, minority Shareholders shall be obligated to sell their Shares on the same terms and conditions as the majority Shareholders, subject to certain limitations and protections.
   

3. Tag-Along Rights: In the event a Shareholder intends to sell their Shares to a third party, other Shareholders shall have the right to "tag along" and sell their Shares on the same terms and conditions as the selling Shareholder, subject to certain limitations and protections.
   

H. Dispute Resolution

1. Negotiation: In the event of any dispute arising under this Agreement, the Parties shall first attempt to resolve the dispute amicably through good faith negotiations.
   

2. Mediation: If the dispute cannot be resolved through negotiation, the Parties shall submit the dispute to non-binding mediation by a mutually agreed-upon mediator.
   

3. Arbitration: If mediation is unsuccessful, the Parties agree to resolve the dispute through binding arbitration conducted in accordance with the rules of the American Arbitration Association.

I. Miscellaneous Provisions

1. Confidentiality Obligations: Each Shareholder agrees to maintain the confidentiality of all proprietary information of the Company, including but not limited to business plans, financial information, and trade secrets, both during and after their association with the Company. Confidentiality obligations shall not apply to information that is already publicly known or becomes publicly known through no fault of the Shareholder.
   

2. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of [insert jurisdiction], without regard to its conflicts of law principles.
   

3. Amendment: Any amendment to this Agreement shall be made in writing and signed by all Shareholders. Such amendments shall become effective upon execution.
   

4. Entire Agreement: This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether oral or written.
   

5. Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect to the fullest extent permitted by law.

Signatures

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Executed as of the date first above written.

[Your Company Name]

[Name]

[Title]

[Name]

[Title]

Schedule A: Initial Share Ownership

Shareholder Name: [Insert Shareholder Name]

Number of Shares: [Insert Number of Shares]

Percentage Ownership: [Insert Percentage Ownership]

Shareholder Name: [Insert Shareholder Name]

Number of Shares: [Insert Number of Shares]

Percentage Ownership: [Insert Percentage Ownership]

Shareholder Name: [Insert Shareholder Name]

Number of Shares: [Insert Number of Shares]

Percentage Ownership: [Insert Percentage Ownership]

Startup Templates @ Template.net