Shareholder Agreement - Vermont

SHAREHOLDER AGREEMENT — [CORPORATION NAME], a Vermont corporation

TABLE OF CONTENTS

1. Definitions
2. Purpose & Statutory Authorization
3. Transfer Restrictions
4. Buy-Sell (Triggering Events; Mandatory and Optional Purchase)
5. Valuation & Payment Terms
6. Voting Agreement; Board; Officers
7. Drag-Along & Tag-Along Rights
8. Preemptive Rights
9. Protective Provisions / Supermajority
10. Information Rights
11. Restrictive Covenants
12. Deadlock Resolution
13. Certificate Legend
14. Term & Termination
15. Dispute Resolution & Governing Law
16. General Provisions
17. Signatures
18. Sources & References

RECITALS AND PARTIES

THIS SHAREHOLDER AGREEMENT (this "Agreement") is made and entered into as of [__/__/____] (the "Effective Date") by and among [CORPORATION NAME], a Vermont corporation (the "Corporation"), and the persons listed on the Share Schedule below and who execute this Agreement (each, a "Shareholder" and, collectively, the "Shareholders").

RECITALS

A. The Corporation is a corporation organized under the Vermont Business Corporation Act, Title 11A V.S.A. (the "Act"), with the entity and registered-office facts shown in its current filed records.

B. As of the Effective Date, the authorized capital of the Corporation consists of [____] shares of [CLASS/SERIES] stock, par value [$____] per share, of which [____] shares are issued and outstanding and held of record by the Shareholders as set forth in the Share Schedule.

C. The Corporation is a closely-held corporation whose shares are not publicly traded. The Shareholders desire to provide for the management, ownership, and continuity of the Corporation; to restrict the transfer of its shares; to provide an orderly mechanism for the purchase and sale of shares upon certain events; to coordinate the voting of their shares and the composition of the Board; and to otherwise set forth their respective rights and obligations.

D. The persons executing this Agreement constitute ALL of the shareholders of the Corporation as of the Effective Date, and they intend that this Agreement qualify as, and have the full effect of, a shareholder agreement under 11A V.S.A. § 7.32, in addition to being enforceable as a transfer-restriction agreement under 11A V.S.A. § 6.27 and a voting agreement under 11A V.S.A. § 7.31.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows.

Share Schedule (Ownership as of the Effective Date)

1. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below. Other terms are defined where they first appear.

"Act" means the Vermont Business Corporation Act, Title 11A V.S.A., as amended.

"Affiliate" means, as to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person.

"Agreed Value" has the meaning set forth in Section 5.1.

"Board" means the board of directors of the Corporation.

"Business Day" means any day other than a Saturday, Sunday, or legal holiday in the State of Vermont.

"Disability" means a Shareholder's inability, by reason of physical or mental illness or injury, to perform substantially all of the duties such Shareholder customarily performs for the Corporation for a continuous period of [____] days or for [____] days in any [twelve (12)]-month period, as determined in accordance with Section 4.2(b).

"Fair Market Value" has the meaning set forth in Section 5.2.

"Immediate Family" means a Shareholder's spouse, children (natural or adopted), grandchildren, parents, and siblings, and a trust established solely for the benefit of any of them or the Shareholder.

"Permitted Transferee" has the meaning set forth in Section 3.3.

"Person" means an individual, corporation, partnership, limited liability company, trust, estate, association, or other entity.

"Public Corporation" means a public corporation for purposes of 11A V.S.A. § 7.32(d), as classified by counsel from the Corporation's then-current facts and law.

"Purchase Price" means the price determined under Section 5 for shares purchased under this Agreement.

"Shares" means all shares of capital stock of the Corporation now owned or hereafter acquired by a Shareholder, and any security convertible into or carrying a right to subscribe for or acquire such shares, as contemplated by 11A V.S.A. § 6.27(e).

"Transfer" means any sale, assignment, gift, pledge, hypothecation, encumbrance, or other disposition of Shares or any interest therein, whether voluntary or involuntary, by operation of law or otherwise.

"Triggering Event" has the meaning set forth in Section 4.1.

2. PURPOSE & STATUTORY AUTHORIZATION

2.1 Purpose

The purpose of this Agreement is to promote the Shareholders' mutual interests and the interests of the Corporation by imposing certain restrictions and obligations on the Shareholders and the Shares, and by providing for the continuity, governance, and orderly transfer of ownership of a closely-held Vermont corporation.

2.2 Statutory Basis

This Agreement is entered into under and is intended to be enforceable pursuant to Vermont law, including:

(a) Shareholder agreement (omnibus override). 11A V.S.A. § 7.32 provides that an agreement among the shareholders that complies with that section is effective among the shareholders and the Corporation even though it is inconsistent with one or more other provisions of the Act, including provisions that eliminate or restrict the powers of the Board, govern distributions, establish who shall be directors or officers, govern the exercise of voting power, govern related-party transactions, transfer management authority (including the resolution of deadlock), or require dissolution. The persons executing this Agreement constitute all of the shareholders at the Effective Date, this Agreement is a written agreement signed by them and made known to the Corporation, and the Shareholders intend that it have the full effect of § 7.32.

(b) Transfer restrictions. Section 6.27 permits a qualifying restriction in the Articles, Bylaws, shareholder agreement, or agreement with the Corporation for status, securities-law, or another reasonable purpose. A new restriction does not affect previously issued shares unless their holders agree in writing or voted for it. Its existence must be conspicuously noted on a certificate or included in the § 6.26(b) statement; without that notice, it is not enforceable against a person who lacks knowledge. Complete the adoption, purpose, affected-share, notice, knowledge, and particular-restriction analysis before enforcement.

(c) Voting agreements. 11A V.S.A. § 7.31 provides that two or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose, and that such a voting agreement is specifically enforceable. The voting provisions of Section 6 constitute a voting agreement under § 7.31.

(d) Voting trusts. This Agreement does not itself create a voting trust. Any later trust must satisfy § 7.30's signed agreement, share transfer to the trustee, beneficial-owner list, delivery, effectiveness, ten-year term, and extension requirements.

2.3 Term, Amendment, and Effect of § 7.32

Consistent with 11A V.S.A. § 7.32(b)(2)–(3), the parties acknowledge that, unless this Agreement provides otherwise, a § 7.32 agreement is subject to amendment only by the holders of a majority of each class of the Corporation's issued and outstanding capital stock, with each class voting as a separate group, and is valid for ten (10) years. The parties intend that the term and amendment provisions of Sections 14.1 and 14.4 govern in lieu of those defaults. An agreement authorized by § 7.32 that limits the discretion or powers of the Board relieves the directors of, and imposes upon the persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent the directors' powers are so limited.

3. TRANSFER RESTRICTIONS

3.1 General Prohibition

No Shareholder shall Transfer Shares except under this Agreement and applicable law. A violation creates only the remedy that the selected restriction, adoption record, certificate or information-statement notice, transferee knowledge, § 7.32 status, and other controlling law support. The Corporation shall not automatically label every violating transfer void or refuse registration without that review.

3.2 Right of First Refusal

(a) Offer Notice. A Shareholder who receives a bona fide written offer from a third party to purchase any of such Shareholder's Shares and who desires to accept it (the "Selling Shareholder") shall first deliver written notice (the "Offer Notice") to the Corporation and the other Shareholders. The Offer Notice shall identify the prospective transferee, the number of Shares offered (the "Offered Shares"), the price, and all material terms.

(b) Corporation's Option. Subject to 11A V.S.A. § 6.40 and all other lawful share-acquisition and distribution limits, the Corporation shall have [thirty (30)] days after receipt of the Offer Notice to elect, by written notice, to purchase all or part of the Offered Shares on the offered terms.

(c) Shareholders' Option. To the extent the Corporation does not elect to purchase all of the Offered Shares, the other Shareholders shall have an additional [thirty (30)] days to elect to purchase the remaining Offered Shares, pro rata in proportion to their respective holdings (with rights of over-allotment among electing Shareholders).

(d) Sale to Third Party. If the Corporation and the Shareholders do not collectively elect to purchase all of the Offered Shares within the option periods, the Selling Shareholder may, within [sixty (60)] days thereafter, Transfer the Offered Shares to the identified third party at a price not less than, and on terms no more favorable to the transferee than, those in the Offer Notice, provided the transferee first executes a joinder agreeing to be bound by this Agreement. Any Shares not so transferred again become subject to this Agreement.

3.3 Permitted Transfers

The right of first refusal in Section 3.2 shall not apply to, and a Shareholder may make, the following Transfers (each, a "Permitted Transfer"; each transferee, a "Permitted Transferee"), provided the transferee executes a joinder agreeing to be bound by this Agreement and the Shares remain subject hereto:

(a) a Transfer to the Corporation or to another Shareholder;

(b) a Transfer to a member of the Shareholder's Immediate Family or to a trust or entity wholly owned for estate-planning purposes, provided the transferring Shareholder retains voting control of the Shares during such Shareholder's lifetime;

(c) a Transfer upon death by will or intestacy, subject to Section 4; and

(d) any Transfer approved in writing by Shareholders holding at least [____]% of the outstanding Shares.

3.4 Prohibited Transfers

No Shareholder shall pledge, hypothecate, or grant a security interest in any Shares, or Transfer any Shares to a competitor of the Corporation, without the prior written consent of Shareholders holding at least [____]% of the outstanding Shares.

4. BUY-SELL: TRIGGERING EVENTS

4.1 Triggering Events

The occurrence of a selected event below initiates only the review, notice, option, and purchase route that applicable nonbankruptcy law permits. Delete every event and consequence not adopted after counsel reviews entity, employment, marital-property, creditor, insolvency, bankruptcy, tax, insurance, and valuation effects.

(a) Death of a Shareholder who is an individual;

(b) Disability of a Shareholder who is an individual;

(c) Termination of Employment of a Shareholder who is employed by the Corporation, whether voluntary or involuntary, with or without cause;

(d) Bankruptcy or Insolvency of a Shareholder, including the filing of a voluntary or involuntary petition, an assignment for the benefit of creditors, or the appointment of a receiver;

(e) Divorce of a Shareholder, to the extent any Shares (or marital interest therein) would be awarded to a non-Shareholder spouse;

(f) Involuntary Transfer by operation of law, levy, or attachment; and

(g) Voluntary Withdrawal by a Shareholder who delivers a written notice of intent to withdraw and sell.

4.2 Mandatory and Optional Purchase

(a) Death. Upon death, the Corporation [shall / may], only to the extent a lawful purchase and distribution can be made, purchase the Shares at the Section 5 price, and the estate [shall / may] sell. The surviving Shareholders [shall / may] purchase any balance under the selected allocation.

(b) Disability. Disability shall be determined by a licensed physician selected by the Corporation (or, if the Affected Shareholder disputes the determination, by a third physician jointly selected by the Corporation's and the Shareholder's physicians). Upon a determination of Disability, the purchase mechanics in Section 4.2(a) apply.

(c) Termination of Employment. Upon Termination of Employment of a Shareholder, the Corporation and the other Shareholders shall have the option (and, if the parties so elect by completing the bracketed term, the obligation) to purchase the terminated Shareholder's Shares. The parties shall complete: purchase is [mandatory / optional]; in the case of termination [for cause], the Purchase Price shall be [Fair Market Value / __% of Fair Market Value / Agreed Value].

(d) Bankruptcy, Divorce, Involuntary Transfer, Voluntary Withdrawal. The Corporation and other Shareholders may exercise only a purchase option that remains enforceable in the actual proceeding. A spouse, transferee, estate, creditor, or trustee is bound only to the extent controlling law and a valid joinder or restriction provide. Under 11 U.S.C. § 541(c)(1), an insolvency- or bankruptcy-conditioned restriction cannot by itself exclude, forfeit, modify, or terminate the debtor's ownership interest against the bankruptcy estate.

4.3 Closing

The closing of a permitted purchase shall occur within [sixty (60)] days after the later of the triggering event or final price determination, subject to court orders, creditor rights, approvals, and the Corporation's § 6.40 determination when it is the buyer. The parties shall use transaction-specific transfer, lien-release, authority, and payment documents.

5. VALUATION & PAYMENT TERMS

5.1 Agreed Value

The Shareholders [may] establish an agreed value per Share (the "Agreed Value") by executing a Certificate of Agreed Value attached as Exhibit A, to be reviewed and updated at least annually. If a Certificate of Agreed Value has been executed within [twenty-four (24)] months before a Triggering Event, the Agreed Value shall be the Purchase Price.

5.2 Formula / Appraisal (Fair Market Value)

If no current Agreed Value exists, the Purchase Price shall be the "Fair Market Value" of the Shares, determined as follows (the parties shall select one method):

(a) Formula. [Describe formula — e.g., [____] times trailing twelve-month EBITDA, less indebtedness, multiplied by the selling percentage]; or

(b) Appraisal. Fair Market Value shall be determined by an independent appraiser. The Corporation and the seller shall each select one qualified appraiser within [fifteen (15)] days; if the two appraisals are within [ten percent (10%)] of each other, the Fair Market Value is their average; otherwise, the two appraisers shall select a third, whose determination (within the range of the first two) is binding. The appraisal shall [apply / not apply] minority and marketability discounts.

5.3 Payment Terms

(a) Cash / Insurance Proceeds. At closing, the buyer shall pay [____]% of the Purchase Price in cash, including any life-insurance proceeds applied under Section 5.4.

(b) Promissory Note. The balance shall be evidenced by a promissory note payable in [____] equal [monthly / quarterly / annual] installments over [____] years, bearing interest at [the applicable federal rate / ____% per annum], secured by a pledge of the purchased Shares, with the right to prepay without penalty.

5.4 Life-Insurance Funding

(a) The Corporation [and/or the Shareholders] may purchase and maintain life-insurance policies on the lives of the Shareholders to fund the purchase obligations on death. The Corporation shall be the [owner and beneficiary] of such policies.

(b) The policies and beneficiaries are listed on Exhibit B. Upon a Shareholder's death, the proceeds shall be applied first to the Purchase Price for that Shareholder's Shares. Proceeds exceeding the Purchase Price shall belong to the Corporation.

(c) A Shareholder whose Shares are purchased (or such Shareholder's estate) shall have the option to purchase any policy on such Shareholder's life for its interpolated terminal reserve (cash surrender) value.

6. VOTING AGREEMENT; BOARD; OFFICERS

6.1 Voting Agreement

Each Shareholder agrees to vote all Shares now or hereafter owned by such Shareholder, and to take all other action within such Shareholder's control (including executing written consents under the Act), so as to give effect to the provisions of this Section 6. This Section is a voting agreement under 11A V.S.A. § 7.31 and is specifically enforceable.

6.2 Board Composition

(a) The Board shall consist of [____] directors.

(b) Each Shareholder (or group of Shareholders) holding at least [____]% of the outstanding Shares shall be entitled to designate [one (1)] director, and the Shareholders shall vote their Shares to elect each such designee. A designating Shareholder may remove and replace its designee at any time, and the Shareholders shall vote accordingly.

(c) A vacancy created by a designated director shall be filled only by the Shareholder entitled to designate that director.

6.3 Officers

The Shareholders shall cause the Board to elect the following officers, who shall serve until removed in accordance with the Bylaws: [President / CEO: ____; Secretary: ____; Treasurer/CFO: ____].

6.4 Cumulative Voting

The parties acknowledge the default rules of the Act regarding voting for directors under 11A V.S.A. § 7.28. To the extent cumulative voting would otherwise apply, the Shareholders agree to vote so as to implement the designation rights in Section 6.2, and the Articles of Incorporation [shall / shall not] authorize cumulative voting.

7. DRAG-ALONG & TAG-ALONG RIGHTS

7.1 Drag-Along

If Shareholders holding at least [____]% of the outstanding Shares (the "Dragging Shareholders") approve a bona fide arm's-length sale of the Corporation (whether by sale of shares, merger, or sale of substantially all assets) to an unaffiliated third party, the Dragging Shareholders may require each other Shareholder to (a) vote all Shares in favor of the transaction, (b) sell the same proportion of Shares on the same per-share terms, and (c) execute reasonable transaction documents, provided that no Shareholder shall be required to give representations other than as to title, authority, and ownership, and that liability shall be several (not joint) and capped at the proceeds received.

7.2 Tag-Along

If one or more Shareholders (the "Transferring Shareholders") propose to Transfer, in one transaction or a series, Shares representing more than [____]% of the outstanding Shares to a third party (other than a Permitted Transfer), each other Shareholder may elect to participate in the sale on the same terms, selling a pro rata portion of its Shares. The Transferring Shareholders shall give at least [twenty (20)] days' written notice of the proposed sale, and each electing Shareholder shall respond within [ten (10)] days.

8. PREEMPTIVE RIGHTS

8.1 Grant

Except for Exempt Issuances, before the Corporation issues any new Shares or securities convertible into Shares, it shall offer each Shareholder the right to purchase such Shareholder's pro rata portion (based on then-current ownership) on the same price and terms, so as to maintain such Shareholder's percentage ownership.

8.2 Procedure

The Corporation shall deliver written notice of the proposed issuance describing the securities, price, and terms. Each Shareholder shall have [twenty (20)] days to elect to exercise its preemptive right. Shares not subscribed for may be issued to the proposed purchaser within [ninety (90)] days on terms no more favorable than those offered to the Shareholders.

8.3 Exempt Issuances

"Exempt Issuances" means issuances (a) under a board-approved equity-incentive plan, (b) upon conversion or exercise of outstanding securities, (c) in connection with a bona fide acquisition or strategic transaction approved under Section 9, or (d) approved by Shareholders holding at least [____]% of the outstanding Shares.

9. PROTECTIVE PROVISIONS / SUPERMAJORITY

Notwithstanding any contrary provision of the Bylaws, the Corporation shall not take any of the following actions without the approval of Shareholders holding at least [____]% of the outstanding Shares (or the unanimous consent where indicated):

(a) amending the Articles of Incorporation or Bylaws;

(b) issuing additional Shares or securities (other than Exempt Issuances) or creating a new class or series;

(c) declaring or paying any dividend or distribution other than pro rata;

(d) merging, consolidating, converting, or selling all or substantially all assets;

(e) authorizing dissolution or liquidation; any bankruptcy authorization or filing must be handled under controlling federal and fiduciary law and cannot be contractually vetoed in all circumstances;

(f) incurring indebtedness in excess of [$____] or granting liens on material assets;

(g) entering into any transaction with a Shareholder, director, officer, or Affiliate other than on arm's-length terms;

(h) materially changing the nature of the Corporation's business; and

(i) approving annual compensation of any officer in excess of [$____].

If the parties invoke 11A V.S.A. § 7.27 for a greater shareholder quorum or voting requirement, the requirement belongs in the Articles. A separate § 7.32 allocation must independently satisfy that section; do not treat ordinary Bylaws alone as a § 7.27 vehicle.

10. INFORMATION RIGHTS

The Corporation contractually shall deliver: (a) annual financial statements within [one hundred twenty (120)] days after fiscal year-end; and (b) quarterly unaudited statements within [forty-five (45)] days after each quarter. Statutory inspection is separate: § 16.01(e) records are available after at least five business days' written notice without the additional proper-purpose test, while accounting records and the shareholder record require the § 16.02(c) good-faith, proper-purpose, particularity, and direct-connection showing. Any broader contractual access, confidentiality protocol, privilege protection, data security, and copying charge shall be specified here: [________________].

11. RESTRICTIVE COVENANTS

11.1 Non-Competition

☐ Not used. [OR] After counsel records the person's role, protected interest, restricted conduct, duration, territory, exceptions, consideration, governing law, and current official authority, the following tailored covenant applies: [________________].

11.2 Non-Solicitation

☐ Not used. [OR] The separately reviewed employee, contractor, customer, or supplier non-solicitation covenant is: [________________].

11.3 Confidentiality

Each Shareholder shall hold in confidence all confidential and proprietary information of the Corporation and shall not use or disclose it except for the benefit of the Corporation, both during and after the period of share ownership.

11.4 Remedies; Reformation

No remedy or judicial reformation is automatic. For each activated covenant, counsel shall state the available remedy, proof, bond, forum, severability or reformation rule, defenses, and fee treatment under current controlling authority: [________________].

12. DEADLOCK RESOLUTION

12.1 Deadlock Defined

A "Deadlock" exists if the Board or the Shareholders are unable, after [two (2)] properly noticed meetings held at least [fifteen (15)] days apart, to reach the vote required to act on a material matter, and the inability materially impairs the Corporation's business.

12.2 Escalation; Mediation

Upon a Deadlock, the matter shall first be referred to the senior representatives of the disputing Shareholders for good-faith negotiation for [thirty (30)] days, and then, if unresolved, to non-binding mediation under Section 15.

12.3 Buy-Sell Shotgun

If a Deadlock remains unresolved [sixty (60)] days after mediation begins, any Shareholder (or 50% group) (the "Offeror") may deliver a written notice to the other (the "Offeree") stating a price per Share. The Offeree shall, within [thirty (30)] days, elect either (a) to sell all of its Shares to the Offeror at that price, or (b) to buy all of the Offeror's Shares at that same price. Failure to elect within the period shall be deemed an election to sell. The resulting purchase shall close under Section 4.3 and be paid under Section 5.3.

12.4 Statutory and Contract Routes

Section 14.30 does not make every contractual Deadlock a dissolution ground. For a shareholder proceeding based on director deadlock, the directors must be deadlocked, shareholders unable to break it, and either irreparable injury threatened or suffered or the business no longer conductible to shareholders' general advantage. The section separately addresses illegal, oppressive, or fraudulent control conduct; shareholder voting deadlock lasting through at least two annual-meeting dates without successor elections; and misapplication or waste. Section 7.32(a)(7) permits a compliant all-shareholder agreement to require dissolution on a stated request or event. Counsel shall select the applicable route and plead or document every prerequisite.

13. CERTIFICATE LEGEND

Each certificate representing Shares (and any information statement for uncertificated Shares under 11A V.S.A. § 6.26(b)) shall bear the following conspicuous legend, consistent with 11A V.S.A. §§ 6.27(b) and 7.32(c):

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TRANSFER RESTRICTIONS, VOTING AGREEMENT, AND OTHER TERMS OF A SHAREHOLDER AGREEMENT DATED [__/__/____], INCLUDING AN AGREEMENT AMONG SHAREHOLDERS UNDER 11A V.S.A. § 7.32, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION. TRANSFER AND REGISTRATION ARE SUBJECT TO THAT AGREEMENT AND CONTROLLING LAW.

The Corporation shall note the existence of this Agreement conspicuously as required by 11A V.S.A. §§ 6.27(b) and 7.32(c), and shall recall and reissue any outstanding certificates as required by § 7.32(c). Failure to so note does not affect the validity of the Agreement, but a purchaser without knowledge of the Agreement may rescind the purchase as provided in § 7.32(c) (action to be commenced within the earlier of 90 days after discovery or two years after purchase).

14. TERM & TERMINATION

14.1 Term

This Agreement becomes effective on the Effective Date and continues until terminated under Section 14.2. The parties intend that this term provision override the 10-year default of 11A V.S.A. § 7.32(b)(3).

14.2 Termination

This Agreement terminates upon the earliest selected event: (a) the written agreement of all Shareholders; (b) dissolution or completed liquidation; (c) one Shareholder owning all Shares; or (d) the Corporation becoming a Public Corporation, when § 7.32(d) ends the statutory agreement's effectiveness. Bankruptcy effects require separate federal-law review and are not an automatic contractual forfeiture or termination.

14.3 Effect of Termination

Termination does not affect rights or obligations that accrued before termination, including any closing of a purchase already triggered. The confidentiality obligations of Section 11.3 survive termination.

14.4 Amendment

This Agreement may be amended only by a writing signed by the Corporation and by Shareholders holding at least [____]% of the outstanding Shares (or, where it disproportionately and adversely affects a Shareholder, with that Shareholder's written consent). The parties intend that this provision override the default amendment rule of 11A V.S.A. § 7.32(b)(2) (majority of each class). The parties may specify that certain provisions require unanimous consent.

15. DISPUTE RESOLUTION & GOVERNING LAW

15.1 Governing Law

This Agreement is governed by and construed in accordance with the laws of the State of Vermont, without regard to conflict-of-laws principles, and the internal affairs of the Corporation are governed by the Act.

15.2 Dispute Process Selection

After counsel reviews claim type, party status, governing law, urgent-relief needs, enforceability, cost, confidentiality, appellate rights, and existing contracts, select one coordinated process and delete the others:

☐ Negotiation for [____] days, followed by nonbinding mediation with [provider] at [place / remote].

☐ Arbitration under [identified rules and version], before [one / three] arbitrator(s), seated in [place], with allocation of fees, discovery, interim relief, confidentiality, and award enforcement stated in [schedule].

☐ Litigation in a court with independently established subject-matter jurisdiction, personal jurisdiction, and venue.

15.4 Forum; Interim Relief

The selected forum and any permitted interim-relief court are [________________]. This clause does not create subject-matter jurisdiction, venue, standing, an injunction, specific performance, or a bond exception; counsel shall verify each for the actual claim.

15.5 Attorneys' Fees and Costs

☐ Each side bears its own. ☐ The tribunal may award fees and costs only under [identified contract term/statute/rule], subject to its prerequisites and limits.

15.6 Jury Treatment

☐ No contractual waiver. ☐ Counsel-approved claim- and forum-specific waiver attached as [Exhibit __] after reviewing current enforceability and execution requirements.

16. GENERAL PROVISIONS

16.1 Specific Performance

The voting agreement created under 11A V.S.A. § 7.31 is specifically enforceable. No party concedes that every other breach automatically proves uniqueness, inadequate legal remedies, injunction factors, or entitlement to specific performance.

16.2 Further Assurances

Each party shall execute such further documents and take such further actions as may be reasonably necessary to carry out this Agreement.

16.3 Notices

All notices shall be in writing and delivered personally, by nationally recognized overnight courier, or by certified mail (return receipt requested) to the addresses on Exhibit C, and are effective upon receipt (or refusal).

16.4 Successors and Assigns; Joinder

This Agreement binds the parties and their permitted successors and assigns to the extent controlling law permits. Before registering a transfer, the Corporation shall document the restriction's adoption, the affected shares, certificate or statement notice, transferee knowledge, any required joinder, and the remedy available under §§ 6.27 and 7.32.

16.5 Severability

If a provision is held invalid or unenforceable, the tribunal may sever or reform it only to the extent controlling law permits and the parties' lawful allocation can operate without it. The order controls the effect on the remaining provisions.

16.6 Entire Agreement

This Agreement, together with its Exhibits, constitutes the entire agreement among the parties regarding its subject matter and supersedes all prior understandings.

16.7 Counterparts; Electronic Signatures

The parties may sign counterparts and use electronic signatures only after confirming signer identity, authority, consent, record integrity, delivery, retention, and any transaction-specific exclusion or formality. The compiled, authenticated counterparts constitute the parties' execution record.

16.8 No Third-Party Beneficiaries

Except as expressly provided, this Agreement is solely for the benefit of the parties and their permitted successors and assigns.

17. SIGNATURES

IN WITNESS WHEREOF, the parties have executed this Shareholder Agreement as of the Effective Date.

THE CORPORATION:

[CORPORATION NAME], a Vermont corporation

By: [________________________________]

Name: [____________________]

Title: [____________________]

Date: [__/__/____]

THE SHAREHOLDERS:

[________________________________]
Name: [____________________]
Date: [__/__/____]

[________________________________]
Name: [____________________]
Date: [__/__/____]

[________________________________]
Name: [____________________]
Date: [__/__/____]

18. SOURCES & REFERENCES

• Vermont Business Corporation Act, Title 11A V.S.A.
• 11A V.S.A. § 7.32 — Shareholder agreements (omnibus override; all-shareholder requirement; conspicuous-legend requirement; default 10-year term and majority-of-each-class amendment; ceases when corporation becomes a public corporation).
• 11A V.S.A. § 6.27 — Restriction on transfer of shares and other securities (authorizes transfer restrictions in articles, bylaws, or shareholder agreements; conspicuous-legend requirement).
• 11A V.S.A. § 6.26 — Shares without certificates; information statement (§ 6.26(b)).
• 11A V.S.A. § 7.30 — Voting trusts.
• 11A V.S.A. § 7.31 — Voting agreements (specifically enforceable).
• 11A V.S.A. §§ 7.27-7.28 — Greater shareholder requirements and director voting.
• 11A V.S.A. § 7.28 — Voting for directors; cumulative voting.
• 11A V.S.A. § 6.30 — Shareholders' preemptive rights (opt-in via articles).
• 11A V.S.A. §§ 16.01-16.02 — Corporate records and the two inspection routes.
• 11A V.S.A. § 14.30 — Grounds for judicial dissolution (deadlock; oppression; waste).
• 11 U.S.C. § 541(c)(1) — Effect of transfer and insolvency restrictions on bankruptcy-estate property.