Stockholders Agreement / Shareholder Agreement

PREAMBLE

This Stockholders Agreement ("Agreement") dated [Date] among [Company Name] ("Company"), [Founder 1], [Founder 2], and [VC Fund Name] ("Investor") establishes governance rights for shareholders post-Series A financing. Legal Framework: Delaware General Corporation Law (DGCL), German GmbHG.

1. BOARD REPRESENTATION & VOTING

1.1 Board Composition: Company Board shall consist of [X directors]:

(a) [Founder 1 Name] (Founder Director)
(b) [Investor Representative] (Investor-Designated Director)
(c) [Independent Director] (Mutually agreed)
(d) Investor has right to attend all Board meetings as observer (non-voting)

1.2 Board Voting Rights (Major Decisions): Per Delaware §141-142: Following matters require vote of Series A holders (or their designated director):

- Acquisition/merger/sale of Company
- Issuance of new share class (Series B+)
- Change in Board size
- Liquidation or material asset sale
- Related-party transactions >USD [50,000]

2. DRAG-ALONG & TAG-ALONG RIGHTS

2.1 Drag-Along (Investor Initiated): Per Delaware standard VC practice: If Series A holders approve sale/merger at >50% of outstanding consideration AND founders have agreed:

(a) All shareholders MUST sell at same price/terms
(b) Non-selling shareholders cannot block deal
(c) Used in acquisition scenarios (e.g., strategic buyer offers USD 50M)

2.2 Tag-Along (Founder Initiated): If founders receive acquisition offer and founders own [>50%] of company:

(a) Founders may sell stake to buyer
(b) Series A holders have right to tag-along at same price/terms
(c) Prevents founder sale without investor participation

3. PRO-RATA & ANTI-DILUTION RIGHTS

3.1 Pro-Rata Rights (Future Rounds): Series A may participate in future financings pro-rata to maintain ownership %:

(a) Ownership % = Shares held / Total outstanding shares
(b) If Series A does not exercise within 20 days, rights lapse
(c) Company may offer shares to other investors
(d) Pro-rata rights terminate at IPO or if ownership <0.5%

3.2 Anti-Dilution Protection: ☐ Broad-based weighted-average | ☐ Narrow-based | ☐ No protection. If new round at lower valuation, Series A price adjusts per formula.

4. LIQUIDATION PREFERENCES

4.1 Waterfall on Liquidity Event (Acquisition/IPO): Per Delaware §151-158 (Preferred Stock Rights):

1. Series A Preferred: 1x non-participating liquidation preference (receives EUR/USD 1.00 per share before common)
2. Common Stockholders (Founders): Receive remainder (if total proceeds >1x Series A preference)
3. If proceeds <1x preference: Series A receives all proceeds (capped), common gets zero

4.2 Participation (Optional): If specified: After receiving 1x preference, Series A participates pro-rata with common on remaining proceeds (up to their pro-rata ownership %).

5. FOUNDER RESTRICTIONS & COVENANTS

5.1 Founders Shall NOT (without Series A Consent):

(a) Sell/transfer shares >10% of their holdings
(b) Pledge shares as collateral
(c) Create new share class or senior securities
(d) Declare dividends to common stockholders
(e) Hire/fire C-level executives (CEO, CFO, CTO, etc.)

5.2 Vesting Acceleration: If Series A initiates founder removal and founder is not engaged in fraud/gross misconduct: Unvested shares accelerate [X months] per IRC §409A (409A Valuation).

6. INFORMATION & REGISTRATION RIGHTS

6.1 Information Rights (GDPR Compliant): Company shall provide quarterly financials, annual audited statements, cap table updates to Series A.

6.2 Registration Rights (IPO): If Company goes public per EU Prospectus Regulation 2017/1129 or US Securities Act §5: Series A may require registration of shares on Company's dime (piggyback rights).

8. FOUNDER PREEMPTIVE RIGHTS & ANTI-DILUTION

8.1 Founder Anti-Dilution (Weighted Average): If Company issues new shares at lower price than founders' entry, founders' ownership % protected per Delaware §151 (Preferred Stock):

Formula: New price = Old price × (Outstanding pre-round + Funded at old price) / (Outstanding pre-round + Funded at new price)
Example: Founder 10% at USD 10/share, Series B at USD 5/share → Founder adjustment protects ownership dilution

8.2 Anti-Dilution Waiver: Founders may waive anti-dilution for down rounds (if necessary to save company)

9. EMPLOYEE OPTION POOL & FUTURE DILUTION

9.1 Option Pool Reservation: Company reserves [10-20%] of fully-diluted shares for employee option grants (pool subject to increase per Series B+ negotiations)

9.2 Option Pool Dilution: Option pool expansion (if needed for recruitment) pro-rata dilutes all shareholders equally per IRC §409A (Valuation Standards)

10. TRANSFER RESTRICTIONS & LOCK-UP

10.1 Lock-Up Period (Post-Exit): Upon IPO per SEC Regulation M (Underwriting): Founders/Series A locked for [180 days] (typical underwriter requirement)

10.2 Right of First Refusal (ROFR): If founder/Series A wants to sell pre-exit: (a) Company has right to purchase at proposed price, (b) If declined, Series A has pro-rata right to purchase, (c) Only then can founder sell to third party

11. DISPUTE RESOLUTION & AMENDMENT

11.1 Governing Law: ☐ Delaware law ☐ German law | Disputes: Mediation first, then DIS Arbitration

11.2 Amendment: No modification except in writing signed by all parties.

CRITICAL: This agreement controls all major VC rights (governance, exit, liquidation preferences). Without clear terms, conflicts between founders/investors common. Both parties must clearly understand dilution mechanics, drag-along triggers, and liquidation priority BEFORE signing.

Date: [Date] | Company: ____________ | Founder 1: ____________ | Investor: ____________