Director Shareholder Agreement Template for United States

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Key Requirements PROMPT example:

Director Shareholder Agreement

"I need a Director Shareholder Agreement for my tech startup with three founding members who will all serve as directors, including specific provisions for share vesting over 4 years starting January 2025 and clear exit procedures."

Document background
The Director Shareholder Agreement is essential when individuals hold dual roles as both directors and shareholders in a U.S. corporation. This document becomes particularly crucial in privately-held companies where clear governance structures and shareholder rights need to be established. The agreement typically includes provisions for share transfers, voting rights, board composition, and exit strategies. It helps prevent potential conflicts of interest and ensures smooth corporate governance while protecting both the company's and individual stakeholders' interests. The agreement must comply with relevant state corporate laws and federal securities regulations.
Suggested Sections

1. Parties: Identification of the company, directors, and shareholders involved in the agreement

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Appointment and Duties of Directors: Terms of appointment and responsibilities of directors

5. Share Ownership and Transfer Restrictions: Rules governing share ownership and transfer limitations

6. Voting Rights and Procedures: Details of voting mechanisms and rights

7. Board Meetings and Procedures: Rules for conducting board meetings and decision-making processes

8. Confidentiality: Provisions regarding confidential information

9. Termination: Circumstances and procedures for terminating the agreement

Optional Sections

1. Tag-Along Rights: Rights of minority shareholders to join in sale of shares

2. Drag-Along Rights: Rights of majority shareholders to force minority shareholders to join in sale

3. Anti-Dilution Provisions: Protection against dilution of shareholding

4. Right of First Refusal: Priority rights for existing shareholders to purchase shares

Suggested Schedules

1. Schedule of Shareholders: List of all shareholders and their shareholdings

2. Share Certificate Template: Standard form of share certificate

3. Board Resolution Templates: Standard forms for board resolutions

4. Company Information: Details of company registration, directors, and registered office

5. Transfer Notice Form: Standard form for notifying intent to transfer shares

6. Deed of Adherence: Template for new shareholders joining the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Industries

Securities Act of 1933: Federal law governing the initial offering and sale of securities, requiring registration and disclosure requirements for public offerings

Securities Exchange Act of 1934: Federal law regulating secondary trading of securities and establishing the SEC, governing ongoing reporting requirements

Sarbanes-Oxley Act 2002: Federal law enhancing corporate responsibility and financial disclosure standards, primarily for public companies

Dodd-Frank Act: Federal legislation implementing financial regulatory reform, including corporate governance and executive compensation provisions

Internal Revenue Code: Federal tax regulations affecting director compensation, share transfers, and corporate transactions

State Corporation Laws: State-specific laws governing corporate formation, operation, and governance (e.g., Delaware General Corporation Law)

Blue Sky Laws: State-specific securities laws regulating the offering and sale of securities to protect investors from fraudulent activities

State Business Corporation Acts: State legislation establishing requirements for corporate formation, governance, and operations within specific states

Fiduciary Duty Requirements: Legal obligations requiring directors to act in the best interest of the company and shareholders, including duty of care and loyalty

Stock Exchange Requirements: Listing requirements and corporate governance standards imposed by stock exchanges (if applicable)

SEC Regulations: Federal regulations governing public company reporting, disclosure, and corporate governance requirements

Employment Laws: Federal and state laws governing employment relationships, including Fair Labor Standards Act and non-compete provisions

Corporate Bylaws: Internal company rules governing corporate operations, board procedures, and shareholder rights

Articles of Incorporation: Foundational document establishing the corporation's existence and basic structure

Industry-Specific Regulations: Additional regulatory requirements specific to the company's industry sector

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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