Good Leaver/Bad Leaver Shareholder Agreement (New Share Issue)
This Basic Shareholder Agreement - New Share Issue with leaver provisions added is based on our basic shareholder agreement but has incorporated good leaver/bad leaver provisions within the body of the agreement.
The good leaver/bad leaver clause relates to any shareholder who is also an employee of the company and who subsequently leaves the company’s employment. Whether the employee shareholder is obliged to offer his/her shares up for sale to the other shareholders on his/her departure as an employee will depend on the circumstances of his/her departure and whether he/she is classified as a good or bad leaver.
A good leaver is defined as anyone who leaves the company’s employment through retirement, disability, redundancy or unfair dismissal. Good leavers have the option but not the obligation to sell their shares on departure. A bad leaver is defined in this agreement as anyone who is not considered to be a good leaver. A bad leaver is obliged to sell his shares on exit to the other shareholders. The definitions can be altered as required to suit the circumstances that need to be achieved.
Our good leaver/bad leaver clause can also be accessed here as a standalone document.
This agreement anticipates new shares being issued. It also differs from our basic shareholder agreement with new shares in that a clause relating to restrictions on the shareholders (such as anti-solicitation and anti-competition) has been added as well as an optional anti-corruption clause.
Square brackets are used to denote optional words and phrases or an either/or choice. If the wording is required, the pair of square brackets should be deleted. If the wording is not required, then the pair of square brackets and the wording in between should be deleted.
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