Who Are The Parties To A Shareholders Agreement

However, a SHA often requires unanimous approval for its revision, but may also require super-majority approval (a number of votes well in excess of half of the voting shares, but less than 100%). A SHA usually indicates the number of initial board members (and often their names and other details) and sometimes the right of certain shareholders to appoint a certain number of board members. Other shareholders who do not have the right to appoint directors must vote in accordance with the articles of the company. 16.2 Disputes between the parties, owners and/or the Company in connection with the Shareholders` Agreement or other agreements between the parties, owners and/or the Company will be resolved through mutual negotiations. Automatic transfers are usually triggered when a shareholder dies; is convicted of a crime; is dissolved or liquidated (if the shareholder is a corporation); bankruptcy filings; has terminated its employment relationship with the company (if the shareholder is also an employee); materially violates the SHA; materially violates other mentioned ancillary agreements that could harm the Company; or, among other things, violates an obligation to the Company. Shareholders can determine which acts or omissions trigger an automatic transfer and, as long as they are clearly specified in the SHA, they are binding. Thus, piggyback rights protect minority shareholders by giving them the right, but not the obligation, to sell shares with a majority or stronger shareholder.