This Shareholders' Agreement (this "Agreement") is entered into as of [EFFECTIVE DATE] by and among:
Olney-Fraser Management Limited, a company incorporated in England and Wales with registered number [NUMBER] and registered office at [ADDRESS] (the "Company"); and
Olney-Fraser (US) LLP, a Delaware limited liability partnership; Olney-Fraser (UK, Europe, Canada) LLP, an England and Wales limited liability partnership; Olney-Fraser (China, Hong Kong) LLP, a Hong Kong registered limited liability partnership; Olney-Fraser (Asia, Aust/NZ, LATAM) LLP, a Singapore limited liability partnership; and Olney-Fraser (Middle East, Central Asia, Africa) LLP, a DIFC limited liability partnership (each a "Shareholder" and together the "Shareholders").
The Company and the Shareholders are each referred to individually as a “Party” and collectively as the “Parties.” The Shareholders are the five Regional LLPs comprising Olney-Fraser, as described in the Olney-Fraser Global Governance Framework Agreement among the Shareholders, the Company, and Darren Olney-Fraser (the “Governance Framework”).
RECITALS
WHEREAS, the Company was incorporated to provide shared management, administrative, branding, technology, and other services to the Shareholders under the Governance Framework, and does not itself practice law, hold client funds, or employ lawyers to provide legal services;
WHEREAS, the issued share capital of the Company is held in equal shares by the five Shareholders, reflecting the equal standing of the five Regional LLPs under the Governance Framework;
WHEREAS, the Parties wish to regulate their relationship as shareholders of the Company, the composition and conduct of its board of directors, the funding of its operations, and the transfer of its shares, consistently with the Governance Framework;
NOW, THEREFORE, the Parties agree as follows:
1. DEFINITIONS
1.1 Articles. means the articles of association of the Company from time to time.
1.2 Board. means the board of directors of the Company.
1.3 Business. means the provision of shared services to the Shareholders as described in Section 7.4 (and 7.4A) of the Governance Framework, and any other lawful activity incidental thereto, excluding the practice of law.
1.4 Chairman. means the chairman of Olney-Fraser appointed or elected under the Governance Framework, who serves on the Board as described in Section 4.1.
1.5 Companies Act. means the Companies Act 2006, as amended.
1.6 LLP Director. means the director appointed by a Shareholder under Section 4.2.
1.7 Management Committee. means the Management Committee described in the Governance Framework.
1.8 Reserved Matter. means a matter listed in Schedule 2.
1.9 Shares. means ordinary shares of £1.00 each in the capital of the Company, or such other shares as the Company may from time to time have in issue.
2. SHARE CAPITAL AND OWNERSHIP
2.1 Current Shareholding. As of the Effective Date, the issued share capital of the Company is held as set out in Schedule 1, with each Shareholder holding twenty percent (20%) of the issued Shares.
2.2 Equal Rights. All Shares rank equally in all respects, including as to voting, dividends, and return of capital, and the Company shall not issue any Share carrying rights different from those of the Shares then in issue without the unanimous consent of the Shareholders.
2.3 No Dividend Policy. The Parties intend that the Company operate on a cost-recovery basis, funded by the contributions described in Article 3, and do not intend that the Company generate distributable profit for the purpose of paying dividends. This Section 2.3 does not prevent the Board from declaring a dividend if the Company holds surplus funds not required for its Business, but no Shareholder shall be entitled to expect or rely on a dividend as a return on its shareholding.
3. FUNDING
3.1 Funding Determination. Each Shareholder shall contribute funding to the Company in the amount, on the basis, and at the times the Management Committee determines under Section 7.3 of the Governance Framework. The Board shall implement the Management Committee's determination by calling for funding from each Shareholder, whether by way of subscription for further Shares, a shareholder loan on terms the Board approves, or payment for services, as the Board determines to be the most appropriate mechanism from time to time.
3.2 Default in Funding. If a Shareholder fails to pay funding called under Section 3.1 within thirty (30) days of it falling due, interest accrues on the overdue amount at the rate of one percent (1%) per month, and the Board may suspend the defaulting Shareholder's access to Company services (other than the Global Conflicts Database and data protection functions under Section 8 of the Governance Framework, which shall continue) until the overdue amount, with interest, is paid in full.
4. THE BOARD
4.1 Composition. The Board consists of the Chairman and one LLP Director appointed by each Shareholder, consistent with Section 7.2 of the Governance Framework.
4.2 Appointment and Removal of LLP Directors. Each Shareholder may appoint and remove its own LLP Director by written notice to the Company, and shall do so to reflect that Shareholder's then-current representative on the Management Committee under the Governance Framework.
4.3 Chairman. The Chairman serves on the Board for so long as, and on the same terms as, the Chairman holds that office under the Governance Framework, and the Company shall take no action to remove the Chairman from the Board other than as a consequence of the Chairman ceasing to hold that office under the Governance Framework.
4.4 Board Meetings. The Board shall meet at least quarterly. A quorum is four (4) directors, which must include at least three (3) LLP Directors. Each director has one vote, and matters are decided by simple majority, with the Chairman having a casting vote in the event of a tie, consistent with Section 3.3 of the Governance Framework.
4.5 Reserved Matters. The Company shall not take, and the Board shall not approve, any action listed in Schedule 2 without the prior written consent of all Shareholders.
5. TRANSFER OF SHARES
5.1 General Restriction. No Shareholder may transfer, charge, or otherwise dispose of any Share or any interest in a Share except as permitted by this Article 5 or with the prior written consent of all other Shareholders.
5.2 Permitted Transfer. A Shareholder may transfer its Shares to a successor Regional LLP approved by the Management Committee under Section 7.1 of the Governance Framework, and the incoming entity shall execute a deed of adherence to this Agreement as a condition of the transfer.
5.3 Compulsory Transfer. If a Shareholder ceases to be a Regional LLP under the Governance Framework, whether by withdrawal under Section 10.4 of the Governance Framework, expulsion, or otherwise, that Shareholder shall transfer all of its Shares as the Management Committee directs, at a price equal to the nominal value of those Shares unless the Management Committee determines a different price, within thirty (30) days of ceasing to be a Regional LLP.
5.4 New Shareholders. If a new Regional LLP is admitted under Section 10.3 of the Governance Framework, the Company shall allot and issue new Shares to it, and the existing Shareholders shall take such action (including, if necessary, surrendering or transferring Shares for nominal consideration) as the Management Committee directs so that, immediately following the admission, all then-current Regional LLPs hold equal shareholdings in the Company.
6. CONFIDENTIALITY AND NON-SOLICITATION
6.1 Confidentiality. Each Shareholder shall keep confidential all non-public information concerning the Company's business, finances, technology, and supplier and service arrangements, and shall use such information solely for purposes consistent with this Agreement and the Governance Framework, except as required by law or professional obligation.
6.2 Non-Solicitation. For so long as it is a Shareholder and for twelve (12) months afterward, a Shareholder shall not solicit for hire any then-current employee of the Company with whom it had material dealings, to the extent enforceable under applicable law.
7. DEADLOCK
7.1 Escalation. If the Board cannot reach a decision on a matter because of an equality of votes, or the Shareholders cannot agree on a Reserved Matter, the Chairman shall convene a meeting of one representative of each Shareholder to attempt to resolve the matter by negotiation within fourteen (14) days. If not resolved, the matter shall be dealt with under Section 10.2 (Dispute Resolution).
8. WARRANTIES
8.1 By Each Shareholder. Each Shareholder severally warrants that it has full power and authority to enter into this Agreement, that doing so is consistent with its own partnership agreement and the Governance Framework, and that this Agreement constitutes its valid and binding obligation.
9. RELATIONSHIP TO THE GOVERNANCE FRAMEWORK AND THE ARTICLES
9.1 Order of Precedence — Governance Framework. If this Agreement conflicts with the Governance Framework on a matter the Governance Framework governs (including the composition of the Board as it reflects the Management Committee, the determination of funding levels, and the services the Company provides), the Governance Framework prevails. This Agreement governs the Companies Act mechanics of share ownership, transfer, and board governance not addressed by the Governance Framework.
9.2 The Articles. The Parties shall procure that the Articles are adopted and amended as necessary to be consistent with this Agreement. If the Articles conflict with this Agreement, this Agreement prevails as between the Shareholders, and the Parties shall amend the Articles accordingly as soon as reasonably practicable.
10. GENERAL PROVISIONS
10.1 Governing Law. This Agreement is governed by the laws of England and Wales, without regard to its conflict of laws principles.
10.2 Dispute Resolution. The Parties shall first attempt to resolve any dispute arising out of this Agreement through good faith negotiation within fourteen (14) days of written notice of the dispute. If not resolved, the dispute shall be referred to binding arbitration administered by [ARBITRATION BODY] seated in London, England, and judgment on the award may be entered in any court of competent jurisdiction. Nothing in this Section 10.2 prevents a Party from seeking urgent injunctive or interlocutory relief from a court of competent jurisdiction.
10.3 Amendment. This Agreement may be amended only with the approval of the Management Committee and the ratification of a majority of the Partners voting in each of at least four (4) of the five Shareholders, except that a change to the voting thresholds in this Section 10.3 itself, or to Schedule 2, requires ratification by all five Shareholders, consistent with Section 12.1 of the Governance Framework.
10.4 Winding Up. The Company shall not be wound up voluntarily except as a Reserved Matter. On a winding up, any surplus assets remaining after discharging liabilities shall be distributed among the then-current Shareholders in equal shares.
10.5 Entire Agreement. This Agreement, together with its Schedules and the Articles, constitutes the entire agreement among the Parties regarding its subject matter and supersedes all prior discussions or understandings on the subject.
10.6 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.
10.7 Notices. All notices under this Agreement shall be in writing and delivered to a Party's address of record, or such other address as a Party may designate in writing.
10.8 Counterparts. This Agreement, and any deed of adherence under Section 5.2, may be executed in counterparts, including by electronic signature, each of which shall be deemed an original.
SCHEDULE 1 — SHAREHOLDINGS
Olney-Fraser (US) LLP — 20% of issued Shares
Olney-Fraser (UK, Europe, Canada) LLP — 20% of issued Shares
Olney-Fraser (China, Hong Kong) LLP — 20% of issued Shares
Olney-Fraser (Asia, Aust/NZ, LATAM) LLP — 20% of issued Shares
Olney-Fraser (Middle East, Central Asia, Africa) LLP — 20% of issued Shares
SCHEDULE 2 — RESERVED MATTERS
Amending the Articles.
Altering the Company's share capital, or issuing, redeeming, or buying back any Shares, except as Section 5.4 requires.
Incurring borrowing, or granting security over any Company asset, in excess of £[AMOUNT].
Approving the Company's annual budget and the funding to be called from Shareholders under Article 3, except that the underlying funding determination remains the Management Committee's under the Governance Framework.
Entering into, amending, or terminating any contract outside the ordinary course of the Business with a value exceeding £[AMOUNT].
Appointing or removing the Company's auditors.
Commencing, settling, or compromising any litigation or arbitration with a value exceeding £[AMOUNT].
Changing the nature of the Business or the Company's registered activities.
A voluntary winding up, merger, or sale of all or substantially all of the Company's assets.
Granting any Share or option over Shares to any person who is not a Regional LLP.
NOTE: Some of the entities, counterparties and licences contemplated in this agreement may still be in formation, and the agreement may not yet be excuted. It is likely that Founding Partners are still being recruited to enable formation, execution and licensing steps in a jurisdiction to be completed