A shareholder agreement, an example of the form of which will be presented below, is considered a kind of civil contract. This document is binding on its parties. The rules of the Civil Code, including the provisions on obligations, contracts and transactions, are applied to the joint-stock agreement of the joint-stock company .
Definition
It is disclosed in Art. 32.1 of the Federal Law No. 208. A joint agreement refers to an agreement on the exercise of rights certified by securities, or on the specifics of exercising shareholder rights. Simply put, the parties accept the obligation to commit certain actions or to refrain from them.
For example, the subject of a shareholder agreement is a specific voting procedure for the parties at a general meeting, the obligation to agree on a voting option with other shareholders. The document may fix the alienation or acquisition of securities only at a fixed cost or upon the occurrence of the agreed circumstances. The subject of a shareholder agreement may be a ban on the alienation of financial instruments under certain conditions.
It is forbidden to include in the document the obligation of the parties to vote as directed by the executive bodies of the company.
Features of circumstances
The conditions referred to in Federal Law No. 208, depending on the content of the shareholder agreement, may be circumstances that comprise the essence of the contract or the condition for its execution. Accordingly, the requirements of the Civil Code will apply to them.
This may be a prescription on the terms of the transaction, the performance of an obligation established by its terms. For example, if we are talking about the term, as an essential condition of the shareholder agreement, the rules of Articles 190, 425, 314 of the Civil Code apply, if the price - Art. 424.
Third parties
They are not parties to the shareholder agreement . As a rule, the presence of third parties in the contract leads to disputes. This happens, for example, when it is necessary to invalidate a decision made in violation of the terms of a shareholder agreement. In such situations, disputes may arise that affect the rights of third parties and pose a threat to the stability of the internal turnover of society.
Protective gear
In the shareholder agreement of an open joint stock company , certain measures may be provided that cannot be fixed in the charter. In foreign corporate practice, one of the most effective and difficult to overcome mechanisms to protect an economic entity from unfriendly takeovers is considered to be a set of legal measures that includes the "poison pill" method and step board of directors.
Corporate law of foreign states provides for the possibility of fixing these mechanisms in the charter. Domestic legislation does not give such a right to societies. However, the rules do not prohibit the inclusion of appropriate measures in a shareholder agreement .
Stepped Board of Directors
It is an organ consisting of several groups. As a rule, there are 3-4 of them. Each group has several members. In accordance with the rules set forth in the shareholder agreement, only one group can be re-elected annually.
For example, there are 9 people on the board of directors. They are divided into 3 groups of 3 people. At the first annual meeting, re-election will be held for only one group, at the second - the next, at the third - the last. In the event of an unfriendly takeover, the “invader” will be forced to wait for the next meeting to receive a majority on the board of directors. Accordingly, the absorption will occur no earlier than in a year.
Efficiency Conditions
Step council will benefit society if:
- Includes at least 3 groups. With fewer members, more than 50% of board members will be re-elected. Accordingly, corporate control will be established by the absorbing entity.
- The charter prohibits the re-election of the council. The constituent documentation, however, may establish an exception. It is associated with a violation by the council of certain conditions of the company. If the general prohibition is absent in the charter, re-election can take place for a variety of reasons.
- In the constituent document, the right of shareholders to increase the composition of the board is limited.
In domestic practice, a condition that prohibits early re-election of the board of directors is often included in a shareholder agreement . It is worth saying that the mere fact of filling out such a document reduces the attractiveness of acquiring the company's securities by an absorbing company.
Poisoned Pill
This is a very specific method of protection, the essence of which is as follows. The company issues securities, the rights under which the acquirers can exercise only if there is a threat of hostile takeover. A shareholder can receive a “poisoned pill” in the form of a warrant (a special type of financial instrument) as a special bonus.
Such shares allow you to purchase additional ordinary registered securities of the company at a fixed price or at a discount of up to 70% of their market price at the time the counterparty takes unfriendly steps. The minimum discount threshold is 50%. The establishment of a lower indicator leads to an increase in expenses for payment of placed securities with a large volume of additional issue.
One of the signs of an unfriendly takeover is the purchase of shares and the purchase of more than 5% of the total number of voting securities by one legal entity.
Warrant Benefits
These securities provide peculiar rights that begin to operate from the moment the acquisition process begins. The head of the business entity conducts state registration of the additional issue (issue) of shares. Due to the sharp increase in the number of company securities, the package bought up by the absorbing company is “eroded”.
In order to quickly take advantage of this mechanism, a provision on a sufficient volume of authorized shares should be introduced in the company's charter. The board of directors may decide on the placement, if the constituent document provides for the corresponding right.
The company’s charter can also fix a clause according to which the board of directors is granted the right to issue preferred shares providing for a certain set of legal opportunities. Simply put, the Board of Directors may, at its sole discretion, determine the conversion rate of preferred securities into ordinary ones, establish the possibility of obtaining their voting rights at meetings. In such cases, the board of directors does not even need to agree on the procedure for using the "poison pill."
Using the complex of all these measures, the company will be able to block the purchase of securities by the absorbing company. She will have to make a lot of efforts to get a majority in at least one vote. As a result, the absorption process will shift by at least a year. During this time, the "invader" will significantly increase financial risks.
Additional features
On the basis of paragraph 3 of clause 11 of article No. 208, the charter of a company may limit the number of securities owned by a shareholder, their total value, and the maximum number of votes. However, it should be borne in mind that any member or employee of the company can familiarize themselves with the constituent document. In this regard, experts recommend including the above conditions in the shareholder agreement. This will ensure that society retains control and minimizes the likelihood of takeover.
Shareholder Agreement: Sample
The contract is drawn up only in writing and in the form of one document signed by all its participants.
Please note that the conclusion of an agreement in electronic form or through the exchange of letters is not recognized as observing its proper form.
If the established conditions are not fulfilled, the contract is deemed not concluded, which, in turn, entails the consequences enshrined in article 162 of the Civil Code.
Expert Advice
The agreement may provide for the obligation to carry out actions agreed upon, the need for which arises during the reorganization, liquidation, management of an AO and other circumstances.
As mentioned above, the general rules of the Civil Code on contracts apply to the shareholder agreement.
The signing of the document must be carried out by persons with the appropriate authority. Otherwise, the contract may be invalidated in court.
Only shareholders are entitled to enter into an agreement. The ultimate beneficiaries may not be parties to the contract.
Experts recommend including in the content of the document data from extracts from the register confirming the status of the shareholder. You can attach copies of them.
When formulating the terms of the agreement, one should check their compliance with the charter. The parties may not invoke the invalidity of the contract due to a contradiction with the constituent document.
According to paragraph 4.1 of Article 32.1 of the Federal Law No. 208, the parties to the agreement are required to notify the company of its conclusion. Given this requirement, it is advisable to include in the text the provisions governing the assignment of this obligation to one or more shareholders participating in the contract.
Particular attention should be paid to the clause on enforcement of the shareholder agreement and the measure of responsibility for violation of the provisions. Experts recommend a detailed description of the liability mechanism.