Shareholder Agreement Template

SHAREHOLDERS AGREEMENT

Date: Date

This Agreement is entered into among:

The Company:

Company Name A Corporation/LLC organized under the laws of State/Country Principal Office: Address ("Company")

AND

The Shareholders:

Shareholder 1:

Name: Name

Address: Address Number of Shares: Number Class: Common/Preferred ("Shareholder 1")

Shareholder 2:

Name: Name

Address: Address Number of Shares: Number Class: Common/Preferred ("Shareholder 2")

Additional shareholders as needed

(Collectively, "Shareholders")

RECITALS

WHEREAS, the Shareholders own all of the issued and outstanding shares of the Company;

WHEREAS, the Shareholders desire to set forth their agreements regarding the ownership and management of the Company, transfer of shares, and other matters related to their relationship as shareholders.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. CAPITALIZATION

### Current Capitalization

As of the date of this Agreement:

| Shareholder | # of Shares | Class | % Ownership | |-------------|-------------|-------|-------------| | Name | Number | Class | Percentage% | | Name | Number | Class | Percentage% | | Name | Number | Class | Percentage% | | Total | Number | | 100% |

Authorized Capital Stock:

• Common Stock: Number shares
• Preferred Stock: Number shares
• Other classes

### Changes to Capitalization

Any issuance of new shares, stock splits, or changes to capital structure requires: Unanimous shareholder approval Percentage% shareholder approval Board approval with consent of holders of Percentage% of shares

2. MANAGEMENT AND VOTING

### Board of Directors

Board Composition:

• Total board seats: Number
• Shareholder/Class entitled to appoint: Number directors
• Shareholder/Class entitled to appoint: Number directors
• Independent directors: Number

Director Appointments:

• Shareholder Name appoints: Name(s)
• Shareholder Name appoints: Name(s)

Board Meetings:

• Frequency: Quarterly/Monthly/As needed
• Quorum: Number directors
• Vote required: Majority/Supermajority

### Matters Requiring Shareholder Approval

The following actions require approval of Percentage% / All/Certain classes of shareholders:

• Issuance of new shares or securities
• Amendment of Articles or Bylaws
• Sale of substantially all assets
• Merger or acquisition
• Incurring debt exceeding \$Amount
• Annual budget exceeding \$Amount
• Appointment/removal of CEO
• Sale or pledge of significant assets
• Change in business direction
• Dividend distributions exceeding Amount/Percentage
• Related party transactions
• Other major decisions

### Management

Officers:

• CEO: Name
• CFO: Name
• Other officers

Officer Compensation:

Must be approved by Board and cannot exceed \$Amount without shareholder approval.

Key Decisions:

Day-to-day management by CEO, subject to Board oversight and matters reserved for shareholders.

3. TRANSFER RESTRICTIONS

### General Restriction

No Shareholder may Transfer (sell, assign, pledge, gift, or otherwise dispose of) shares except as permitted by this Agreement.

"Transfer" includes any voluntary or involuntary transfer of legal or beneficial ownership.

### Right of First Refusal

Process:

If a Shareholder ("Selling Shareholder") desires to Transfer shares:

1. Offer Notice: Selling Shareholder provides written notice to Company and other Shareholders including: - Number of shares - Proposed price and terms - Identity of proposed buyer (if applicable)

2. Company Right: Company has Number days to purchase shares at offered price/terms

3. Shareholder Right: If Company declines, other Shareholders have Number days to purchase pro rata at same price/terms

4. Third-Party Sale: If Company and Shareholders decline, Selling Shareholder may sell to third party on same terms within Number days

5. Lapse: If not sold within Number days, offer lapses and process must restart

Exempt Transfers:

Right of first refusal does not apply to:

• Transfers to family members or trusts (with same restrictions)
• Transfers approved by Percentage% of shareholders
• Other exempt transfers

### Co-Sale Rights (Tag-Along)

If Shareholder(s) propose to sell shares to third party, other Shareholders have right to participate in sale on same terms, pro rata to their ownership.

Process:

1. Proposing Shareholder gives notice of proposed sale 2. Other Shareholders have Number days to elect to participate 3. Third-party purchase allocated pro rata among participating Shareholders

### Drag-Along Rights

If Shareholders holding Percentage% of shares approve sale of Company, minority Shareholders must participate on same terms.

Conditions:

• Transaction approved by Board and/or Percentage% of shareholders
• All Shareholders receive same price and terms (adjusted for preferences)
• Selling Shareholders provide same representations and warranties

### Restrictions on Transfer

Shares may not be Transferred:

• To competitors (without consent)
• In violation of securities laws
• Without compliance with this Agreement
• If shareholder in default of obligations

4. PUT AND CALL OPTIONS

### Company Call Option

Company has option to repurchase shares upon:

• Death of Shareholder
• Disability of Shareholder
• Termination of employment (if employee-shareholder)
• Bankruptcy of Shareholder
• Material breach of this Agreement

Call Price: Fair market value/Formula/Book value/Percentage% of FMV

Exercise Period: Number days from triggering event

### Shareholder Put Option

Shareholders have option to require Company to repurchase shares upon: Specific events No put option granted

Put Price: Valuation method

5. VALUATION

For purposes of this Agreement, share value determined by:

Independent Appraisal: Conducted by mutually agreed appraiser, cost split equally

Formula: Book value per share based on most recent financial statements

Multiple: Number times EBITDA

Agreed Value: \$Amount per share, adjusted annually

Negotiated: Good faith negotiation between parties

Appraisal Process:

If independent appraisal required: 1. Parties jointly select appraiser 2. If cannot agree, each selects appraiser, and those two select third 3. Appraisal based on fair market value 4. Determination final and binding

6. EMPLOYMENT AND NON-COMPETE

### Employment

Shareholders who are employees serve at will, subject to employment agreements.

Termination of employment may trigger repurchase rights per Section 4.

### Non-Competition

During shareholding and for Number year(s) after ceasing to be Shareholder, Shareholders agree not to:

• Compete with Company in Territory
• Solicit Company's clients or employees
• Disclose confidential information
• Interfere with Company's business relationships

Scope:

• Geographic area: Territory
• Business scope: Description
• Duration: Time period

### Non-Solicitation

For Number year(s) after ceasing to be Shareholder:

• No solicitation of Company's employees
• No solicitation of Company's customers or suppliers

7. DISTRIBUTIONS AND DIVIDENDS

### Distribution Policy

• Dividends declared at Board discretion
• Tax distributions: Company will make distributions sufficient to cover estimated tax liabilities on Company income (Percentage% of taxable income allocated)
• Distribution frequency: Quarterly/Annually/As determined

### Priorities

Distributions made in following order: 1. Preferred shareholders (if applicable): Amount/Percentage 2. Common shareholders pro rata

8. INFORMATION RIGHTS

Shareholders entitled to receive:

Financial Statements:

• Annual audited financial statements within Number days of fiscal year end
• Quarterly unaudited financial statements within Number days of quarter end
• Monthly management reports (for shareholders holding Percentage%+)

Budget:

• Annual budget before start of fiscal year
• Material budget deviations reported quarterly

Other Information:

• Access to books and records upon reasonable notice
• Annual meeting with management
• Material event notifications

9. CONFIDENTIALITY

Shareholders agree to maintain confidentiality of:

• Company's financial information
• Business strategies and plans
• Customer and supplier information
• Trade secrets and proprietary information
• Terms of this Agreement

Exceptions:

• Information already public
• Disclosure required by law
• Disclosure to advisors under confidentiality obligation
• Information independently acquired

10. DEADLOCK RESOLUTION

If Shareholders or Board deadlocked on material decision:

Process:

Step 1: Negotiation (Number days)

Good faith negotiations to resolve

Step 2: Mediation (Number days)

Mediation with mutually agreed mediator

Step 3: Buyout

• Either party may offer to buy other's shares or sell own shares
• Other party has Number days to elect to buy or sell
• If elect to buy, purchase at offered price
• If elect to sell, must sell at offered price
• If no election, offering party's position prevails

Alternative: Dissolution

If no resolution, Shareholders may vote to dissolve Company

11. DEATH OR INCAPACITY

### Death of Shareholder

Upon death:

• Shares subject to Company call option (Section 4)
• If not exercised, heirs bound by this Agreement
• Estate must provide documentation

Life Insurance:

Company will will not maintain life insurance on Shareholders in amount of \$Amount to fund repurchase.

### Disability

"Disability" means unable to perform essential job functions for Number consecutive days.

Upon Disability, Company has option to repurchase shares per Section 4.

12. DISPUTE RESOLUTION

### Disputes Between Shareholders

Disputes regarding this Agreement resolved through:

1. Negotiation: Number days good faith negotiation 2. Mediation: Number days mediation in Location 3. Arbitration: Binding arbitration under Rules in Location - Number arbitrator(s) - Decision final and binding - Each party bears own costs plus half of arbitrator fees

Exceptions:

• Injunctive relief may be sought in court
• Breaches of confidentiality or non-compete litigated in court

### Governing Law

This Agreement governed by laws of State/Country, without regard to conflict of laws principles.

13. REPRESENTATIONS AND WARRANTIES

Each Shareholder represents and warrants:

• Ownership of stated shares free and clear of liens
• Authority to enter this Agreement
• No conflicting agreements
• Shares not subject to any options, rights, or claims
• Compliance with securities laws

14. TERM AND TERMINATION

### Term

This Agreement effective as of date above and continues until:

• Dissolution of Company
• Sale of all Company assets
• Mutual written agreement of all Shareholders
• Only one Shareholder remains

### Effect of Termination

Upon termination:

• Transfer restrictions lapse
• Confidentiality obligations survive
• Non-compete obligations survive per terms
• Information rights cease

15. AMENDMENTS AND WAIVERS

Amendments:

This Agreement may be amended only by written agreement signed by: All Shareholders Shareholders holding Percentage% of shares Other approval requirement

Waivers:

Waiver of any provision must be in writing. Waiver of one breach does not waive future breaches.

16. GENERAL PROVISIONS

### Entire Agreement This Agreement constitutes entire agreement among parties regarding the subject matter.

### Assignment Rights and obligations under this Agreement may not be assigned except as specifically permitted (e.g., to permitted transferees).

### Severability If any provision invalid, remaining provisions remain in effect.

### Notices All notices to addresses above or as updated in writing, via:

• Hand delivery
• Certified mail
• Email (with confirmation)

### Binding Effect This Agreement binds Shareholders, heirs, successors, and permitted assigns.

### Counterparts This Agreement may be executed in counterparts, each deemed an original.

### Interpretation

• Headings for convenience only
• Singular includes plural and vice versa
• "Includes" is not limiting

### Attorneys' Fees Prevailing party in dispute entitled to reasonable attorneys' fees and costs.

SIGNATURES:

COMPANY:

Company Name

By: _______________________

Name: Name

Title: Title

Date: _______________________

SHAREHOLDERS:

Shareholder 1:

Signature: _______________________

Name: Name

Date: _______________________

Shareholder 2:

Signature: _______________________

Name: Name

Date: _______________________

Additional signature blocks for all shareholders

EXHIBITS:

Exhibit A: Capitalization Table

Exhibit B: Board Composition

Exhibit C: Other attachments as needed