Structuring Shareholder Waiver Agreements A shareholder waiver agreement is a legal contract by and between a publicly traded corporation, on the one hand, and one or more of its shareholders, on the other. While the subject matter of a shareholder waiver agreement will vary tremendously. But the structure of each agreement will remain for the most part consistent, as there are several key provisions that must be included in every shareholder waiver agreement. 1. Recitals. In every shareholder waiver agreement the overall purpose of the agreement should be addressed at the outset. This includes listing the title of the agreement, who the parties are, where the parties are located, and the abbreviated terms that will be used throughout the agreement and what they refer to. (i.e. “Agreement”, “Company”, “Shareholders”, etc.) 2. Waived right. Early on the agreement should clearly state the specific right that is being waived by the shareholder(s). This provision should also address the period for which the rights are waived (the expiration date if applicable) and any conditions precedent to the waiver. 3. Representations and Warranties. Each of the shareholders must represent that they have not sold, transferred, or otherwise conveyed any of the relevant shares of company stock. The shareholder waiver agreement may also want to state that each shareholder agrees that it may only transfer its shares (if it still can) to another entity who agrees, in writing, to be bound by the agreement. These are the most important provisions to any enforceable shareholder waiver agreements. Varying in their subject matter, in such agreements shareholders could be waiving their right to receive dividends, to receive a notice of a meeting (which would otherwise be required under the corporation’s bylaws), or the right to take part in a vote. Essentially, any time a company wants to do something without gaining shareholder approval they must execute a shareholder waiver agreement with its shareholders assuming that the bylaws provide shareholders with the right to do what it wants to do. Drafters of shareholder waiver agreements should try to keep the agreement as short and concise as possible. The beauty of these agreements is the potential for them to be simple and straightforward, depending of course on the right that is being waived and the compensation, if any, the shareholder will receive for that waiver. Drafters should keep in mind that not all shareholders are sophisticated investors, and should use understandable language accordingly and avoid unnecessary legal jargon.