close corporation shareholder's management agreement

7/27/2019 Close Corporation Shareholder's Management Agreement

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CLOSE CORPORATION SHAREHOLDERS MANAGEMENTAGREEMENT

OF __________

ONE SHAREHOLDER

The provisions are suggestive only; and counsel may wish to delete, add or substitute alternative provisions according to the parties actual agreement.

The form of Minutes, Consents, Bylaws, Agreements and other forms and docum ents enclosed with this order are offered as a sample only of standard provisions contained in such forms and documents. They do not purport to address the specific requirements of individual transactions

or situations. If utilized incorrectly, significant negative tax and business consequences could result. Persons outside the legal profession whointend to utilize any such forms and docum ents m ust seek competent legal counsel prior to their use or adaptation thereof for his or her particular requirements.

2005 - 2008 ALL RIGHTS RESERVED


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CLOSE CORPORATIONSHAREHOLDERS MANAGEMENT AGREEMENT

OF __________

A CALIFORNIA CORPORATION

THIS AGREEMENT is entered into and effective on __________ , by and between __________ , hereinafter referred to as Shareholder, and __________ , aCalifornia corporation, hereinafter referred to as Corporation, and is made with reference tothe following facts which are incorporated herein by this reference:

A. Corporation is a close corporation, as defined in Section 158 of theCalifornia Corporations Code.

B. Shareholder is the holder of __________ shares of the outstandingcapital stock of Corporation, which constitutes one hundred percent of itsissued and outstanding shares.

C. The parties desire to enter into a Shareholders Agreement, as defined inSection 186 of the California Corporations Code, for the purpose of establishing responsibility for the management of Corporations businessand fixing such other matters respecting the conduct of its affairs as are

permitted a close corporation under Section 300(b) of that Code.

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

1. Officers and Directors of Corporation. Sh areho l de r sh al l be s ol eDirector and President of Corporation and, at his election, shall occupyone or more, or all, of the remaining offices of Corporation.

Notwithstanding the provisions of Corporations s to the contrary, annualand regular meetings of the shareholder and Board of Directors, includingthe elections of directors and the appointment of corporate officers, may

be waived during the continuance of this Agreement. However,Shareholder shall ensure Corporations compliance with record keepingrequirements of Corporations Code Section 1500 and the annual reportrequirement Section 1501(a) of that Code.

2. Shareholders Compensation. Shareholder shall receive compensation andother employment benefits, and shall perform his employmentresponsibilities, in accordance with the terms and conditions of anemployment agreement to be entered into between Corporation andShareholder in substantially the form of the Employment Agreementattached hereto as Exhibit A.


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3. Management of Corporations Business and Affairs.Notwithstanding the provisions of Corporations s to the contrary, and except as prohibited by provisions of the California Corporations Code, the business and affairs of Corporation shall be managed and all corporate powers shall be exercised

by or under the direction of Shareholder.

4. Termination. This Agreement shall continue until the first to occur of thefollowing:(a) The date on which Corporation ceases to be a close corporation as

defined in Section 158 of the California Corporations Code;(b) The death or permanent physical or mental disability of

Shareholder; or (c) The agreement of the parties in writing to such termination.

5. Share Certificate Legend. Each cert if icate represent ing shares of

Corporation shall be imprinted with the following legend:This corporation is a close corporation. Thenumber of holders of record of its shares of allclasses cannot exceed __________ ( a number not in excess of 35). Any attempted voluntaryintervivos transfer which would violate thisrequirement is void. Refer to the articles, s and anyagreements on file with the secretary of thecorporation for further restrictions.

6. Filing of Shareholders Agreement. A copy of this Agreement, and anyamendments thereto, shall be filed with the Secretary of Corporation for inspection by any prospective purchaser of shares of Corporation.

7. Governing Law. This Agreement shall be governed by and construedin accordance with the laws of the State of California.

8. Successors and Assigns. This Agreement shall inure to the benefitand be binding on the successors and assigns of the parties hereto.


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IN WITNESS WHEREOF, the parties hereto have executed this Agreement in the datefirst above written.

SHAREHOLDER:

_____________________________ __________

CORPORATION:

By: _______________________

__________

By: _______________________ __________

close corporation shareholder's management agreement

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