This Shareholder Agreement is entered into on [DATE] by and between the shareholders of [COMPANY NAME], a [STATE] corporation engaged in contracting services.

1. COMPANY INFORMATION AND OWNERSHIP STRUCTURE

1.1 Company Details

Company Name: [COMPANY NAME]

State of Incorporation: [STATE]

Federal EIN: [EIN NUMBER]

Principal Business Address: [COMPLETE ADDRESS]

Business Type: General Contracting, Specialty Contracting, Construction Services

1.2 Shareholder Information and Ownership Percentages

Shareholder Name	Number of Shares	Ownership Percentage	Initial Capital Contribution
[SHAREHOLDER 1 NAME]	[SHARES]	[PERCENTAGE]	[AMOUNT]
[SHAREHOLDER 2 NAME]	[SHARES]	[PERCENTAGE]	[AMOUNT]
[ADDITIONAL SHAREHOLDERS]	[SHARES]	[PERCENTAGE]	[AMOUNT]

1.3 Authorized Share Capital

The Company is authorized to issue [NUMBER] shares of common stock with a par value of [PAR VALUE] per share. Currently, [ISSUED SHARES] shares are issued and outstanding.

2. SHAREHOLDER RIGHTS AND RESPONSIBILITIES

2.1 Voting Rights

Each share of common stock entitles the holder to one vote on all matters requiring shareholder approval, including:

• Election and removal of directors
• Amendment of corporate bylaws
• Major capital expenditures exceeding [AMOUNT]
• Approval of annual budgets and business plans
• Authorization of debt financing exceeding [AMOUNT]
• Merger, acquisition, or sale of substantial company assets
• Changes to the nature of the contracting business

2.2 Information Rights

All shareholders have the right to:

• Receive quarterly financial statements within 30 days of quarter end
• Access annual audited financial statements
• Review major contracts and project documentation
• Inspect corporate books and records with reasonable notice
• Receive reports on safety incidents and regulatory compliance
• Access project performance metrics and profitability analysis

2.3 Shareholder Responsibilities

Each shareholder agrees to:

• Act in the best interests of the Company
• Maintain confidentiality of proprietary business information
• Comply with non-compete provisions during tenure and for [TIME PERIOD] after exit
• Provide personal guarantees for company financing as required
• Participate in licensing and bonding requirements as applicable

3. GOVERNANCE FRAMEWORK

3.1 Board of Directors

The Company shall be governed by a Board of Directors consisting of [NUMBER] members. Directors shall be elected annually by majority vote of shareholders.

3.1.1 Board Composition

• Each shareholder holding more than [PERCENTAGE]% may designate one director
• Independent director(s) may be appointed for specialized expertise
• At least one director must have construction industry experience

3.1.2 Board Meetings

The Board shall meet at least quarterly. Special meetings may be called with [NOTICE PERIOD] days' notice. A quorum consists of a majority of directors.

3.2 Voting Procedures

3.2.1 Ordinary Resolutions (Simple Majority)

• Approval of annual operating budgets
• Hiring and termination of key management
• Authorization of routine capital expenditures
• Approval of standard contracting projects

3.2.2 Special Resolutions (Supermajority - [PERCENTAGE]%)

• Amendment of this Shareholder Agreement
• Major acquisitions or divestitures
• Changes to dividend policy
• Authorization of debt exceeding [AMOUNT]
• Entry into new geographic markets or service lines

3.2.3 Unanimous Consent Required

• Sale or merger of the Company
• Liquidation or dissolution
• Admission of new shareholders
• Changes to share capital structure

4. EQUITY DISTRIBUTION AND VALUATION METHODS

4.1 Valuation Methodology

For purposes of share transfers, buy-sell provisions, and exit events, the Company shall be valued using the following methodology:

4.1.1 Primary Valuation Method

Professional appraisal by an independent business valuator with construction industry expertise, using appropriate methodologies including:

• Asset-based approach (book value plus adjustments)
• Income approach (discounted cash flow analysis)
• Market approach (comparable company multiples)
• Consideration of work-in-progress and contract backlog

4.1.2 Alternative Valuation Methods

If professional appraisal is not feasible, valuation shall be determined by:

• Formula based on [X] times trailing twelve months EBITDA
• Adjusted book value plus [PERCENTAGE]% premium for goodwill
• Average of three comparable recent transactions in the local market

4.2 Equity Appreciation and Distribution

Shareholders shall participate in equity appreciation proportionate to their ownership percentages. Annual distributions shall be made at the discretion of the Board, considering:

• Cash flow requirements for operations and growth
• Working capital needs for upcoming projects
• Equipment replacement and upgrade requirements
• Debt service obligations and credit facility compliance

5. TRANSFER RESTRICTIONS AND BUY-SELL PROVISIONS

5.1 Transfer Restrictions

No shareholder may transfer shares without first complying with the following restrictions:

5.1.1 Right of First Refusal

Before transferring shares to any third party, the selling shareholder must offer the shares to:

1. The Company (if authorized by Board resolution)
2. Other shareholders on a pro-rata basis
3. If declined by existing parties, then to qualified third parties

5.1.2 Permitted Transfers

The following transfers are permitted without restriction:

• Transfers to immediate family members
• Transfers to personal trusts or estate planning entities
• Transfers pursuant to court order or legal requirement

5.2 Triggering Events for Buy-Sell

5.2.1 Voluntary Departure

If a shareholder voluntarily terminates employment or engagement with the Company, other shareholders may purchase their shares at fair market value with a [PERCENTAGE]% discount for liquidity.

5.2.2 Involuntary Termination

If a shareholder is terminated for cause, the Company may purchase their shares at fair market value with a [PERCENTAGE]% discount.

5.2.3 Death or Disability

Upon death or permanent disability of a shareholder, their shares may be purchased by the Company or remaining shareholders at fair market value. Life and disability insurance should be maintained to fund such purchases.

5.2.4 Retirement

Shareholders reaching age [AGE] may trigger buy-sell provisions, with payment terms extended over [YEARS] years to facilitate transition.

6. MANAGEMENT ROLES AND COMPENSATION

6.1 Management Structure

The day-to-day management of the Company shall be structured as follows:

Position	Shareholder	Primary Responsibilities	Base Compensation
Chief Executive Officer	[NAME]	Overall strategy, client relations, major project oversight	[AMOUNT]
Chief Operating Officer	[NAME]	Operations, project management, quality control	[AMOUNT]
Chief Financial Officer	[NAME]	Financial management, accounting, contract administration	[AMOUNT]

6.2 Compensation Philosophy

Management compensation shall consist of:

• Base Salary: Competitive with local market rates for similar positions
• Performance Bonus: Based on company profitability and individual performance metrics
• Project Incentives: Additional compensation for projects exceeding profit margins
• Benefits Package: Health insurance, retirement contributions, vehicle allowances

6.3 Key Performance Indicators

Management performance shall be evaluated based on:

• Annual revenue growth and profitability targets
• Project completion on time and within budget
• Safety record and regulatory compliance
• Client satisfaction and repeat business metrics
• Cash flow management and working capital efficiency

7. FINANCIAL MATTERS

7.1 Capital Contributions

Initial capital contributions are as specified in Section 1.2. Additional capital may be required for:

• Major equipment purchases or leases
• Bonding capacity increases
• Working capital for large project mobilization
• Technology upgrades and software systems
• Facility expansion or relocation

7.1.1 Additional Capital Calls

Additional capital contributions shall be:

• Approved by [PERCENTAGE]% majority vote
• Contributed pro-rata based on ownership percentages
• Due within [DAYS] days of notice
• Subject to dilution provisions if not contributed

7.2 Distribution Policy

Distributions to shareholders shall be made quarterly, subject to:

• Maintaining minimum cash reserves of [AMOUNT]
• Compliance with debt covenant requirements
• Retention of sufficient working capital for operations
• Board approval by majority vote

7.3 Financial Reporting and Controls

The Company shall maintain:

• Monthly financial statements prepared within 15 days of month-end
• Quarterly reviewed financial statements
• Annual audited financial statements by independent CPA
• Job costing system for all projects
• Regular cash flow projections and budgets vs. actual analysis

8. EXIT STRATEGY PROVISIONS

8.1 Planned Exit Events

8.1.1 Strategic Sale

The Company may be sold to a strategic buyer such as:

• Larger contracting companies seeking market expansion
• Private equity firms focused on construction services
• Industry consolidators or roll-up entities
• Equipment manufacturers or suppliers seeking vertical integration

8.1.2 Management Buyout

Key management personnel may purchase the Company with:

• Seller financing arrangements
• Third-party debt financing
• SBA acquisition financing programs
• Earn-out provisions based on future performance

8.1.3 Employee Stock Ownership Plan (ESOP)

Consideration may be given to ESOP conversion, providing:

• Tax advantages for selling shareholders
• Employee ownership and retention benefits
• Continuity of business operations and culture
• Gradual transition over multiple years

8.2 Exit Timeline and Process

When shareholders decide to pursue an exit strategy:

1. Planning Phase (12-18 months): Financial cleanup, operational improvements, management strengthening
2. Preparation Phase (6-12 months): Marketing materials, buyer identification, preliminary discussions
3. Marketing Phase (3-6 months): Formal marketing process, negotiations, due diligence
4. Closing Phase (2-3 months): Final negotiations, documentation, regulatory approvals

8.3 Exit Proceeds Distribution

Proceeds from any exit event shall be distributed:

1. Payment of transaction expenses and professional fees
2. Satisfaction of company debts and obligations
3. Distribution to shareholders pro-rata based on ownership percentages
4. Allocation of any escrow or earn-out provisions

9. DISPUTE RESOLUTION PROCEDURES

9.1 Internal Dispute Resolution

Disputes between shareholders shall first be addressed through:

• Direct negotiation between parties within [DAYS] days
• Mediation with mutually agreed mediator within [DAYS] days
• Board resolution if dispute affects company operations

9.2 Formal Dispute Resolution

If internal resolution fails, disputes shall be resolved through:

• Arbitration: Binding arbitration under rules of the American Arbitration Association
• Venue: [CITY, STATE]
• Arbitrator Qualifications: Experience in construction industry and corporate law
• Cost Allocation: Each party bears own costs unless otherwise awarded

9.3 Deadlock Resolution

In case of deadlock on major decisions:

• Cooling-off period of [DAYS] days
• Third-party advisor consultation
• Buy-sell mechanism triggering at fair market value
• Dissolution procedures if no resolution achieved

10. GENERAL PROVISIONS

10.1 Term and Termination

This Agreement shall remain in effect until:

• Unanimous written consent of all shareholders to terminate
• Sale or liquidation of the Company
• Reduction to a single shareholder
• [DATE], unless extended by mutual agreement

10.2 Amendment

This Agreement may only be amended by written consent of shareholders holding at least [PERCENTAGE]% of outstanding shares.

10.3 Governing Law

This Agreement shall be governed by the laws of [STATE], without regard to conflict of law provisions.

10.4 Severability

If any provision of this Agreement is held invalid or unenforceable, the remainder shall continue in full force and effect.

10.5 Binding Effect

This Agreement shall be binding upon heirs, successors, and assigns of all parties.

SIGNATURE PAGE

IN WITNESS WHEREOF, the parties have executed this Shareholder Agreement as of the date first written above.