Shareholders Agreements & Disputes

A Personalised CPD Certificate of Completion will be forwarded to you upon completion of this course. These notes do not serve as proof of completion alone.

In Association with:-

Online CPD for Accountants &
Professional Advisors

Shareholder Agreements and
Disputes

Presenter:
Alan O’Driscoll – Flynn O’Driscoll

CPDStore.com

Unit 3, South Court, Block D, Iveagh Court,
Wexford Road Business Park, 5 – 8 Harcourt Road,
Carlow. Dublin 2.
059 9183888 01 4110000
www.OmniPro.ie www.CPDStore.com


Shareholder Agreements and Disputes
Supporting Documentation Index

Contents Page

Slide Set 1 – 27

Back Up Paper

Shareholders Agreement Briefing Questionnaire 28 – 34


The Practising Accountants Seminar
Shareholder Agreements and Disputes
December 2011
Alan O’Driscoll
No.1 Grants Row
Lower Mount Street
Dublin 2
Ireland
Tel: + 353 1 6424220
Fax: + 353 1 6618918

Topics
Clients
- different types, different emphasis

Shareholder Disputes

Appendices

OmniPro Education & Training Page 1 of 34


Client Types
1. Clients who want to put an agreement in
place t regulate th i own relationship and
l to l t their l ti hi d
the management of the company

This consists of all types of companies
including start up and early stage companies
(“Newco”) and also established trading
companies (“Tradeco”)

Client Types

2. Clients who are investing in a company or
wish to bring in investment into their
company (“Investco”)



Shareholders Agreement

Advantages for Newco and Tradeco

Restrictions on transfer of shares

Prohibition on any transfer of shares for an initial period to
be agreed. This is common in early stage companies or
established companies where new/employee shareholders
are being brought into the business.

If any shareholder is selling shares in the company, the
other shareholders shall b entitled t purchase a portion of
th h h ld h ll be titl d to h ti f
the shares on offer, pro rata to their existing shareholding,
so as to ensure their shareholding is not diluted



Pre-emption on allotment of new shares

If the company decides to issue new shares,
the i ti
th existing shareholders shall b entitled t
h h ld h ll be titl d to
acquire allotted additional shares pro-rata to
their existing shareholding so as to ensure
their shareholding is not diluted.

Non-Compete

It is to the benefit of all parties that a
shareholders agreement contains non-
h h ld t t i
compete provisions preventing a shareholder
from participating in any way in a competing
business while they are a shareholder in the
company. This would also usually extend for a
period of six to twelve months from which a
shareholder no longer hold shares in the
company.



Mandatory Transfers of Shares

Shareholders can also benefit from the inclusion of
certain default provisions This would allow the non
provisions. non-
defaulting shareholders the opportunity to purchase
the shares of any defaulting shareholder who commits
an event of default which can include for example,
being in material breach of the shareholders
agreement, being declared bankrupt or being a Bad
g , g p g
Leaver.

Employment Matters
“Good Leaver/Bad Leaver” provisions can provide for
mandatory transfer of shares where a shareholder s
shareholder’s
employment with the company is terminated

- assists in bringing finality to a difficult employment situation
where the company terminates a shareholder’s employment
contract for capability or misconduct

- assists with ‘locking in’ the executive management team



Employment Matters
A Good Leaver will usually be defined simply as an employee who
has ceased employment with the Company arising from any of the
following:
(i) death;
(ii) termination of employment where he has become incapable of
satisfactorily performing his duties to the Company due to physical or
mental incapacity or ill health (provided that such ill health is not caused
by abuse of either drugs or alcohol); or
(iii) where h claims th t t
h he l i that termination of hi employment was a
i ti f his l t
constructive, wrongful or unfair dismissal and he succeeds in such
action before the courts or other tribunal.

Employment Matters
A Bad Leaver will usually be defined as an employee who
has ceased, at the relevant time, to be engaged full time to
the extent required by his employment agreement with the
Company for any reason other than that specified in the
definition of Good Leaver.
This will generally mean a shareholder who has breached his
contract of employment, is leaving the company voluntarily, is
guilty of misconduct or has repudiated his contract of
employment giving the company the right to terminate.



Dispute Resolution
The shareholders agreement can set out in detail how
disputes are to be dealt with. The shareholders may wish to
firstly use mediation before going to arbitration or court, both
of which can be very costly.

Companies that are held 50/50 between two shareholders
who are also the company’s only directors should have a
shareholders agreement with deadlock provisions to allow
provisions,
either shareholder buy the other shareholder’s shareholding
in the event of a serious dispute which prevents the company
continuing to function.

Privacy
A private company must file its articles of association
with the Companies Registration Office which is then
Office,
available to the public to obtain. The advantage with the
shareholders agreement is that it does not have to be
filed with the Companies Registration Office and so the
contents are private.



Specific Issues for consideration
p
for Newco when considering to
put a shareholders agreement in
place

Corporate Governance
• Directors’ meetings –the shareholders
agreement can be used to set out the rules
t b dt t t th l
and regulations relating to directors’ meetings.
The following are a number of matters that can
be dealt with:
- Who is entitled to nominate and have
appointed a director to the board;
- Information rights;



- Quorum required for a valid meeting;
- Chairman to have casting vote in the event of
a tie;
- The minimum number of meetings to be held
annually;
- Notice to be given to each director in advance
of each meeting;
- Methods of participation in board meetings.

• Shareholders’ meetings – in a similar
manner shareholders meeting can b
h h ld ti be
regulated in the shareholders agreement.
The following are a number of matters that can
be dealt with:
- The quorum needed to hold a valid meeting;
- Notice required to be given;
- Chairman (casting vote).



Business Plan
Another option for shareholders is that a business plan is
agreed upon and adopted by the shareholders and
adopted and annexed to the Shareholders Agreement

To be reviewed annually or as often as is necessary

Comfort to shareholders who are not involved with the day
to day running of the company

Directors Salary Formula
It can be very helpful in early stage owner
managed companies t agree a formula f
d i to f l for
directors’ salaries based on a company’s
monthly turnover/profit and cash flow



COST
Cost – new companies will be concerned
about th cost of putting a shareholders
b t the t f tti h h ld
agreement in place especially in the early
stages of development when availability
finance can be difficult to obtain. The cost will
vary depending on the complexity of the
circumstances and also the level of detail the
parties require.

Specific Issues for consideration for Tradeco
when considering t put a shareholders
h id i to t h h ld
agreement in place



Retirement and Business
Succession
Compulsory retirement (Bad Leaver?)

Extracting value / agreed exit strategy

Employee Long Term Incentive Plans / Share option
schemes

Management Buyouts / Buyins

Death
• Shares remain with the Estate/ Beneficiaries

• Shares purchased by the Company

• Shares purchased by other shareholders

• Life policies



Investco
Once again, depending on what side of the
transaction your client i on, th requirements
t ti li t is the i t
for your client will differ

Specific issues for consideration for clients who
are i
investing in a company
ti i

We are assuming for the purpose of this
presentation that the investor will become a
minority shareholder
shareholder.



Investment Preconditions
• Completion by the Investor of satisfactory
financial and l
fi i l d legal d dili
l due diligence;
• Management employment contracts and
emoluments to be agreed;
• Keyman insurance;
• Adoption of a business plan;
• Confirmation of intellectual property rights.

Use of Proceeds
A clause such as this will state that the
company shall use th monies subscribed b
h ll the i b ib d by
the Investor solely as outlined in the
company’s business plan. There should also
be a provision whereby changes to the
business plan and its financial budgets and
outgoings must be approved by the Investor.



Access to Information
Where an Investor decides not to take part
in the
i th running of the company or i not a
i f th is t
member of the board of directors, a clause
would usually be included whereby the
company would have to provide the Investor
with access to certain information (audited
accounts /management accounts / other
financial or operational information) within
agreed time periods

Investor Consent
A shareholders agreement will usually provide
for
f certain actions/matters which th company
t i ti / tt hi h the
shall not undertake without the prior written
consent of the Investor. A list of such matters
is commonly scheduled to the agreement and
can vary widely as to its contents.



Director on the Board
The Investor should have the right to nominate at
least one person to act as a director of the company
company.
If the Investor is seeking control of the decisions of
the board then he may insist on a greater number of
directors which he can nominate in order to give
himself that control.
The Investor s director may also be required to form
Investor’s
part of the quorum.

Conduct of the Business
The shareholders through themselves and the
directors they appoint will generally enter into
appoint,
covenants regarding the conduct of the business.
Such covenants would typically include that the
company will carry on the business in an effective
and business-like manner in line with the business
p ,
plan, and that any action undertaken by the company
y y p y
will be done in the ordinary course of business and in
contemplation of the direct benefit of the company.



Warranties
An Investor may also seek warranties from the
company and its existing shareholders. Warranties
are effectively statements concerning the
company, in particular concerning its share capital
structure, business plan, liabilities, capacity, title to
premises, assets, litigation, employees etc.

The warranties will usually survive until the second
anniversary of completion after which the Investor
will no longer be able to claim for a breach.

Share Transfers

There are a number of options open to the parties in
relation to share transfers which can benefit their
respective positions.
For example the Promoters cannot transfer their
shares without the prior written consent of the
Investor.



Share Transfers

Where the Investor is a minority shareholder he
should insist on the benefit of a tag along provision.
Where this provision is included and the Majority
Shareholders are selling their shares in the
company, the Investor shall be entitled to have his
shares also purchased by the purchaser on the
same terms
terms.

Restrictive Covenants
The shareholders agreement usually includes
a clause which will restrict th current
l hi h ill t i t the t
shareholders and Promoters from competing
with the company. Such covenants will usually
enter into force on completion of the
investment and will continue for two years
after the date on which the relevant
Promoter/shareholder ceases to be a
shareholder of the company.



Specific issues for consideration for clients who
wish t b i i i
i h to bring in investment i th i company
t t in their
We are assuming for the purpose of this presentation that the
client that is bringing in the investor will remain the controlling
shareholders.
The shareholders agreement can be drafted significantly in
favour of the controlling shareholders depending on the
g p g
relationship between the parties. The issues to consider can
include, but are not limited to:

The Board
• The Investor may try to negotiate a contractual right
in the shareholders agreement to nominate and have
appointed a director to the board. The Controlling
Shareholders should try avoid this right and perhaps
allow the Investor to have an observer present at
board meetings who is not entitled to vote.
• If the Controlling Shareholders are forced to g
g give this
right to the investor, they ensure they maintain a
majority on the board and therefore retain the control
of the day to day activities of the company.



Drag Along
A significant advantage for majority shareholders
g g j y
to enter into a shareholders agreement is the
benefit of what is referred to as the drag along
provision. Where this provision is included and
the majority shareholder receives an offer for all
of the shares of the company, the majority
p y, j y
shareholder can force the minority shareholders
to also sell their shares to the purchaser.

Default

Majority h h ld
M j it shareholders can also b
l benefit f
fit from
the inclusion of certain default provisions. This
would allow the majority shareholders the
opportunity to purchase the shares of the
investor who commits an event of default
which can include for example being in
example,
material breach of the shareholders
agreement.



Shareholder Disputes

Disputes in the Media

Coman Family Dispute – Rathgar Pub

Eddie Irvine

• Shareholders agreements provide structure and rules so that the
shareholders are putting themselves in the best position to avoid
potential disputes
disputes.

• If a dispute arises between shareholders, recourse to the courts
should be a last resort remedy due to the amount of time and
money it will cost. It is true that litigation may sometimes be
necessary to protect shareholders (particularly minority
shareholders) rights, however other options such as mediation can
often be effective in breaking the deadlock between shareholders.

• A properly drafted shareholders agreement should provide for the
fact that disputes may arise and relationships break down, and
provide effective and efficient solutions to resolve these issues.



• The first option should always be to get the parties to
meet and discuss the issues at hand, and to try and
resolve the issue. Such an option however must be
subject to strict time limits, as the dispute may be
centred around the company taking a particular course
of action which may lapse if the dispute is not resolved
as quickly as possible.

• The following briefly sets out certain options which are
available to shareholders who wish to initially avoid
having a court resolve a shareholders dispute:

Third party Director/shareholder
with a casting vote
Such a person will hold the balance of control at
board and general meetings of the company Ideally
company.
the 3 rd party should have strong experience in the

industry so that the decision which he/she makes
can be seen to be in the best commercial interests of
the company. The main advantage of this option is
that the decision of the 3rd party will inevitably be
quicker and less formal that other avenues while it
avenues,
will also have the advantage that the person making
the decision is inherently familiar with the business of
the company.



Mediation
The appointment of a mediator under a shareholders
agreement will seek to encourage an agreement being
reached by th parties through consensus, th b creating
h d b the ti th h thereby ti
a situation where the continuing relationship between the
parties is not jeopardised, unlike in litigation which can
cause confrontation between the parties and can seriously
damage or make impossible any future relationships. The
mediation only becomes binding when a formal settlement
agreement is signed by all the parties at the end of the
mediation.
mediation Up to that moment any party can walk away and
continue with other procedures, such as court action or
arbitration. Mediation clauses should always be limited to a
certain time frame within which an agreement must be
decided upon.

Arbitration
Arbitration proceedings are held in private. The parties can choose
the person whom they wish to act as arbitrator, enabling them to
choose a person to adjudicate their dispute who has specialist
knowledge or experience. The Arbitrator works to rules agreed
between the parties or, if no such rules are agreed, as laid down by
the Arbitration Acts. Arbitration tends to be somewhat quicker than
court proceedings but nonetheless it could still take approximately
one year from beginning to end, allowing for full pleadings,
disclosure of documents, witness statements, evidence etc. A
simple arbitration, or one that is capable of being conducted on the
basis of documents only, should be far more expeditious.
y p
Arbitration costs are generally lower than litigation before the
Courts. An arbitrator has the same powers as a judge to award
costs against an unsuccessful party. An arbitrator’s award is final
and binding. There is no appeal against an arbitrator’s award.



Expert Determination
Although similar to arbitration, the role of an expert can be
very different. An expert focuses more on the areas of
valuation and assessment to make his/her final
l ti d tt k hi /h fi l
assessment. Expert determination is governed specifically
by the terms of the clause appointing him/her, and
therefore subject to the terms of the contract an expert may
make his/her own decision on a strict commercial basis
without receiving evidence or information from the parties.
It is for this reason that expert determination is usually a
time and cost efficient method of dispute resolution It is
resolution.
important to remember that the decision of an expert
although binding cannot be enforced in the same way as an
arbitration award.

Good Leaver / Bad Leaver
A good leaver / bad leaver provision can also be an
effective provision to avoid costly disputes and costly
p y p y
litigation. If the situation arises that there is a good
leaver /bad leaver, the remaining shareholders may not
want him to continue to be involved in the company by
being able to vote at shareholders' meetings and will
require him to offer to transfer his shares to the other
shareholders or a third party.

The price to be paid and the definition of good leaver
and bad leaver is up for negotiation between the
parties.



Russian Roulette
This is a situation where one shareholder is permitted
to serve a notice on another shareholder, offering g
either to sell his shares to the other or purchase the
other’s shares, both at the same price. The
shareholder receiving the notice then has the option of
either buying or selling, but if he fails to make a
decision within a certain period of time then the original
shareholder who served the notice can require him to
sell at the price specified. As the original p
p p g price is one at
which the original shareholder must be prepared to
both buy and sell, it generally ensures that a fair price
will be paid for the shares.

Russian Roulette
The russian roulette provision is used primarily as
a means of terminating a relationship between
shareholders where they cannot agree on a
specific issue regarding the conduct of the
business. The main disadvantage to the russian
roulette provision is that should one party be in a
financially stronger position than the other, he
could decide to serve a notice on the other party
at a price under which he knows the other party
will have to sell as he cannot afford to be put in a
position where he is compelled to purchase.



Briefing Questionnaire
• Please find enclosed in the Notes Pack a Briefing
Questionnaire.
• This questionnaire can be used as an aid when discussing
with a client the possibility of entering into a shareholders
agreement.
• It can them be completed by the accountant and given to a
solicitor as a briefing document that will allow the solicitor to
prepare an initial draft shareholders agreement.
• The questionnaire will need to be adapted depending on
q p p g
the particular situation.
• If you require further information or a soft copy of this
document, please contact Alan O’Driscoll of Flynn
O’Driscoll.

Documentation
• The documentation required will depend on
circumstances of each situation
situation.
• Along with the shareholders agreement, any of
the following actions may be required:
- new shares may have to be issued;
- new articles may have to be adopted to
coincide with the shareholders agreement;
- board minutes may be required for the
company.



• The foregoing is merely a guide and is not
a substitute f professional l
b tit t for f i l legal advice
l d i
which should be obtained should you have
any queries in relation to any aspect of the
foregoing.

• Questions

Contact details
Phone: 01-6424220
Email: alanodriscoll@fod.ie
Website: www.fod.ie



Shareholders Agreement

Briefing Questionnaire

NO.1 GRANTS ROW
LOWER MOUNT STREET
DUBLIN 2
IRELAND

TEL: + 353 1 6424220
FAX: + 353 1 6618918

1


Company Name:________________________

1.Parties

1.1 Who are the parties to the Agreement to be and what are their addresses?

1.2 What shareholding will each party hold?

2. Directors

2.1 Who is on the Board at present and who is to be on the board at the time of
signing the shareholders agreement?

2.2 How often is it envisaged that the Board will meet? Can directors participate
by phone or other electronic methods? What notice is required to be given to
each director in advance?

2.3 What is the maximum number of directors allowed to hold office at any one
time?

2.4 How are the directors to be nominated? Does each shareholder have the
right to nominate a director?

2.5 What is the quorum for directors meetings? (Recommend a majority of the
directors for example 3 out of 5) Is it one vote per director?

2.6 In the event of the Board being unable to arrive at a decision will the matter be
referred to shareholders? If so, what percentage of shareholders will it take to
carry the vote?

2.7 Is there to be a third party director with a casting vote?

2.8 Is there to be a Chairman of the Board? Is the Chairman of the Board to have
a casting vote?

2.9 Who is to be the Secretary of the Company from the date of signing of the
shareholders agreement?

2.9 Do cheques need to be signed by more than one director, and if so, up to
what amount will one signature suffice?

3. Shareholders

2


3.1 What is the quorum for a shareholders meeting? (Recommend a majority of
the shareholders for example 3 out of 5)

3.2 Is it one vote for every shareholder or for every share held?

3.3 What notice is required to be given to each shareholder in advance of each
meeting?

3.4 Are written resolutions acceptable?

3.5 Will russian roulette apply in the event of dead lock or will there be a third
party with a casting vote?

3.6 What accounts / information (if any) must the directors furnish to the
shareholders on request? Do the parties want to insert a provision entitling
them and their professional representatives to inspect the Company records
after giving a period of notice?

3.7 Is good leaver / bad leaver to apply?

3.8 Do the parties envisage shareholders will have to provide further financing?
What are the consequences for shareholders who refuse to provide further
financing?

3.9 If the company issues new shares, are existing shareholders entitled to be
allotted a pro rata amount of shares in proportion to their shareholding?

4. Restricted Transactions

4.1 What percentage of shareholders need to consent to a restricted transaction
before it can be performed?

4.2 Which of the following shall be deemed to be a restricted transaction?

1. Subscription for shares in any company or purchase or otherwise
acquire any assets of any nature whatsoever other than such assets
as the Company shall necessarily require for the Business in
accordance with the terms and provisions of this Agreement.

2. Make any public offering of any shares of the company.

3. Creating or issuing or agreeing to create or issue any share or loan
capital or debenture or giving or agreeing to give any option in
respect of any share or loan capital or debenture or consolidate,
sub-divide or alter any of the rights attaching to any of the
Company’s issued shares or reduce the Company’s share capital or

3


repay any amount standing to the credit of any share premium
account or capital redemption reserve fund or capitalise any
reserves or otherwise re-organise the Company’s share capital in
any way or create any new class of shares.

4. Entering into any transactions or contracts or series of transactions
or contracts whereby the business would be controlled otherwise
than by the board.

5. Passing any resolution for the winding up of the company, save
where winding up is necessary by reason of insolvency or enter into
any compensation or scheme of arrangement with the company’s
creditors.

6. Creating any fixed or floating charge, lien (other than a lien or other
form of security arising by operation of law) or other encumbrance
over the whole or any part of the Business undertaking, property or
other assets of the Company or of any subsidiary

7. Entering into any guarantee or indemnity or grant any loan.

8. Entering into any material contract or transaction

9. Disposing of or factoring any of the Company’s book debts.

10. Granting any service contract to any Director.

11. Allowing the total remuneration payable by the Company to the
Directors in respect of any financial year to exceed such amounts as
would be reasonable and normal in relation to commercial practice
generally in Ireland.

12. Making any material change in the nature of the Business or in the
conduct of the Company’s affairs.

13. Appointing any Director/Alternate Director save for such
appointments made pursuant to this Agreement.

14. Make any material change in the Business including changes
effected by acquiring or incorporating or investing in any other
company not engaged in the Business or by disposing of a material
or substantial part of the Company’s assets.

15. Enter into any contracts, arrangements, or transactions except in the
ordinary course of its business and upon an arms length basis or
whereby it would receive less than a fair commercial price for any of
its products or services, or would pay more than a fair commercial
price for any product or service supplied to it (less customary trade
discounts and allowances in each case).

4


16. Make any loan or advance or give an indemnity or guarantee or
provide any credit, advance monies or extend credit to customers,
suppliers or subcontractors other than on an arms length basis and
in accordance with the Company’s normal trade terms.

17. Borrow any money or enter into any capital expenditure exceeding €
[monetary amount] on an annual basis.

18. Pay or agree to pay any royalty or commission (other than normal
trade royalty or commission) or enter into any contract or transaction
whereby any person other than full time employees of the Company
would or might receive remuneration calculated by reference to the
income or profits of the Company.

19. Make any loan or advance to employees or directors.

20. Change its name or carry on trade or business under any name
other than [Company name].

21. Change its financial year.

22. Pass any resolution of its members in a general meeting, the effect
of which would be to alter in a material way the nature of the
Business of the Company and/or alter the Memorandum and Articles
of Association in any way.

23. Enter into any onerous or unusual contracts, arrangements, or
understandings with regard to the business or assets of the
Company.

24. Enter into any hire purchase agreement, credit sale agreement or
equipment leasing agreement for any purposes whatsoever if as a
result the aggregate liability of the Company would exceed
€[monetary amount] on an annual basis.

25. Acquire by purchase, lease or otherwise any freehold or leasehold
property or dispose of or carry out any development upon any part of
its property or assets.

26. Change its auditors, solicitors or bankers.

27. Employ or retain the services of any person at an annual basic
salary of in excess of € [monetary amount].

28. Except for debt collection in the ordinary course of business in an
amount not exceeding €[monetary amount] and claims against the
Company which are covered by insurance, commence, settle or
defend any action or proceedings brought by or against the
Company or take any other material step in the conduct or defence
of any such material litigation involving the Company.

5


29. Acquire, incorporate or invest in any other company or business.

30. Declare or pay a dividend.

5. Non-Competition

5.1 Do you wish to include a restriction on directors/shareholders in relation to
competition with the business when they resign as directors or cease to be
shareholders? How long is this restriction to last, and over what territory?
What percentage of shareholders is needed to vote otherwise in order to
invalidate this provision for any given director/shareholder?

6. Intellectual Property

6.1 Does the Company have Intellectual Property which it wishes to protect?

7. Selling of Shares by Default

7.1 What events of default, (if any) are required to be included in the
Agreement? These may include default relating to the adverse financial
position of shareholders (including bankruptcy), shareholders being in
material breach of the Memorandum and Articles of Association of the
Company.

8. Transfer of Shares

8.1 Is there an initial number of years for which a shareholder may not transfer
their shares in the Company? If they leave during this period, how much
should they be paid for their shares?

8.2 Will shareholders wishing to sell their shares have to offer the shares to the
other shareholders first?

8.3 Are shareholders entitled to sell to third parties at any stage?

9. Share Value

9.1 How is the value of shares to be calculated if the parties cannot agree (by
chartered accountant, or do the parties want another method of
calculation)?

10. Drag Along

10.1 What percentage of the shareholders are needed to make drag along
provisions kick in?

11. Tag Along

11.1 Is Tag Along to apply?

6


12. General Power of Attorney

12.1 What percentage of shareholder votes will it take to nominate an attorney
with power to transfer a non-complying shareholders stake?

13. Business Plan

13.1 Do the parties intend to have a business plan incorporated into the
shareholders agreement? How often is it to be renewed?

13.1 Do the parties intend to have a business plan incorporated into the
shareholders agreement? How often is it to be renewed?

14. Insurance, Death, Retirement

14.1 Is Keyman Insurance necessary? If so, against whom is it being taken out?

14.2 What is to occur on the death of a shareholder?
Do the shares vest in his estate? Do the company or remaining
shareholders have the option to buy them?

14.3 What is to happen on the retirement of a shareholder?

15. Dispute Resolution

15.1 What dispute resolution mechanism will be included?
- Mediation;
- Arbitration;
- Expert Determination;

16. Miscellaneous

16.1 What is the preferred choice of jurisdiction and law?

16.2 Is the Shareholders Agreement to take precedence over the Articles of
Association in case of conflict between both? Will it also be incumbent on
the shareholders to hold a meeting for the purposes of eliminating the
conflict?

The foregoing is merely a guide and is not a substitute for professional legal advice
which should be obtained should you have any queries in relation to any aspect of
the foregoing.

If you have any queries in relation to the content of this article please contact Alan
O’Driscoll whose contact details can be found at www.fod.ie.

7

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