To protect outside investors, there are anti-dilution clauses that are often at the expense of founders, former unprotected outside investors or other shareholders. They are not ideal for non-beneficiaries of anti-dilution rules, but the reality is that most of the most serious and experienced investors expect anti-dilution protection. A well-structured shareholder pact can assure a shareholder who terminates his ties with the company that there will be a market for his shares at a price that he or all other shareholders will consider fair. It also gives shareholders control over whether external parties become shareholders. In the unfortunate event of a shareholder`s death, their shares would be transferred to a family member through their estate, without a shareholders` pact. A shareholders` pact can prevent this by setting conditions for the remaining shareholders (or the company, subject to distributable reserves) to purchase the shares of the deceased shareholder. Similar provisions may also be introduced in the event of shareholder mental incapacity. Under what circumstances is the contract terminated? (z.B. bankruptcy, dissolution, unanimous approval) Are there any sanctions? What is an offence? It`s important when owners hire “Sweat Equity” – what if they don`t perform? If a shareholder is late in payment, what happens (time to correct the defect?), termination and redemption? A SHA may grant repurchase rights to a business, so that in the event of a transfer other than an authorized transfer, the company has the exclusive right to acquire those shares. If such a provision is included in a SHA, the price of these buybacks is usually determined by an evaluation mechanism indicated in the SHA. In the case of a voluntary transfer, the price may be based on the value attributed to the shares by a proposed good faith purchaser (the person to whom the shares must be sold or otherwise transferred).
In the event of an automatic transfer, the purchase price would generally be fair value determined by a qualified appraiser or on the basis of the value of the company`s shares, as stated by the company`s board of directors at its last annual meeting.