{"id":43932,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/sheldon-j-kaphan-shareholder-s-agreement.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"sheldon-j-kaphan-shareholder-s-agreement","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/securities\/sheldon-j-kaphan-shareholder-s-agreement.html","title":{"rendered":"Sheldon J. Kaphan Shareholder&#8217;s Agreement"},"content":{"rendered":"<pre>\n                             SHAREHOLDER'S AGREEMENT\n                                       OF\n                                AMAZON.COM, INC.\n\nTHIS SHAREHOLDER'S AGREEMENT (this 'Agreement'), is made and entered into as of\nthis 8th day of August 1995 by and between Amazon.com, Inc. (the 'Company'), a\nDelaware corporation, and Sheldon J. Kaphan (the 'Shareholder').\n\nSELECT only one of the following:\n\nx       For purposes of this Agreement, the Shareholder is an employee \nshareholder (an 'Employee Shareholder') and is bound to all the provisions of\nthis agreement including Article 9. Shareholder's Initials: SJK\n\n______ For purposes of this Agreement, the Shareholder is not an Employee\nShareholder and is not bound to the provisions of Article 9 of this Agreement.\nShareholder's Initials:________\n\nWHEREAS, the parties hereto deem it in their best interest to provide for\nultimate ownership of the shares of the Company (the 'Stock'), or rights\nthereto, including the right to transfer such Stock and the right to purchase\nsuch Stock upon the occurrence of certain events;\n\nNOW, THEREFORE, in consideration of the foregoing and in consideration of the\nmutual promises set forth herein, the sufficiency of which is hereby\nacknowledged, the parties hereto agree as follows:\n\nARTICLE 1\nRESTRICTION ON DISPOSITION\n\n1.1 Disposition Prohibited. The Shareholder shall not dispose of any of his or\nher Stock except as permitted by this Agreement, and any such attempted\ndisposition shall be void and shall not be recognized or registered upon the\nbooks of the Company.\n\n1.2 Definition of 'Dispose'. The term 'dispose' includes, but is not limited to,\nthe acts of selling, assigning, transferring, pledging, encumbering, giving\naway, devising, and any other form of conveying, including conveyances caused by\nmarital separation, divorce, receivership, or bankruptcy, whether voluntary or\ninvoluntary or by operation of law.\n\n1.3 Notice of Involuntary Disposition. The Shareholder, or his or her personal\nrepresentative, shall notify the Company immediately upon the occurrence of an\ninvoluntary disposal of his or her Stock. The Company shall notify the other\nshareholders of any such involuntary transfer.\n\n1.4 Role of Offeror or Transferor. If the Company is entitled to elect to\npurchase or redeem any Stock owned by the Shareholder hereunder, the Shareholder\nshall not participate in or interfere with, and shall abstain from any vote upon\n(but shall be present for the purpose of meeting any quorum requirement), any\naction to be taken by the Company in effecting such an election. The\nShareholder, or the legal representative of the Shareholder, shall cooperate in\neffecting all company action and execute and deliver all papers as may be\nnecessary to consummate any purchase by the Company of such Stock. Unless\notherwise set forth herein, the option of the Company to purchase or redeem\nStock owned by the Shareholder shall be exercised only upon a majority vote of\nthe Board of Directors.\n\n\n\n                                     Page 1\n\nARTICLE 2\nDISPOSITIONS DURING LIFE\n\n2.1 Voluntary Disposition.\n\n        (a) Disposition of Stock prior to and on December 31, 1999. This\nAgreement prohibits the Shareholder from disposing of any Stock until after\nDecember 31, 1999, unless prior written consent is received from the Company,\nwhich consent can be given only upon a majority vote of the Board of Directors.\n\n        (b) Disposition of Stock after December 31, 1999. In the event that the\nShareholder ('the Offering Shareholder') receives a bona fide offer (the\n'Offer') after December 31, 1999, to purchase all or any portion of his or her\nStock (the 'Shares') and the Offering Shareholder desires to sell his or her\nShares pursuant to the terms of the Offer, then the Offering Shareholder shall\nforthwith deliver to the Company written notice of such offer. Such written\nnotice shall contain the name and address of the bona fide offeror, and the bona\nfide purchase price offered for the Shares and all other terms of such offer.\nThe Company shall convey such notice to each other shareholder who is at that\ntime a current shareholder of the Company ('the Remaining Shareholders'). Within\nsixty (60) days after receipt by the Company of the written notice of the Offer\n(the 'Option Period'), the Company shall have the right to purchase or redeem\nall of the Shares included in such Offer either upon the price and terms set\nforth in the Offer or, at the election of the Company, upon the price and terms\ndescribed in Article 5. A vote by the majority of the members of the Board of\nDirectors shall be required to exercise or waive the option, except that a\nDirector who is the proposed transferor may not participate in the voting, and\nshall not be included in the number of Directors when computing whether a\nmajority vote of the member of the Board was obtained. If the Company does not\nexercise such right within the Option Period, or exercises such right only as to\na portion of such shares, the Remaining Shareholders shall have the right for a\nperiod of thirty (30) days following the end of the Option Period ('the Second\nOption Period') to purchase all of the Shares included in the Offer that are not\npurchased by the Company, upon the same terms as are available to the Company as\nfollows:\n\n               (1) Each Remaining Shareholder shall, during the Second Option\nPeriod, advise the Secretary of the Company whether such Remaining Shareholder\nwishes to exercise his or her right to purchase Shares and the maximum number of\nShares that he or she wishes to purchase.\n\n               (2) If the aggregate of the maximum number of Shares covered by\nthe Offer to be purchased by all Remaining Shareholders exceeds the number of\nShares available for purchase by them, the number of Shares offered shall be\napportioned pro rata among the Remaining Shareholders electing to purchase based\nupon a fraction, the numerator of which is the number of Shares outstanding held\nby each such Remaining Shareholder and the denominator of which is the number\nwhich is the aggregate number of Shares outstanding held by all Remaining\nShareholders electing to purchase. Fractions resulting in any such computation\nshall be rounded to the next whole number. If such computation results in a\npurchase of less than all Shares offered by the Offering Shareholder, then the\ndifference between the number of Shares agreed to be purchased and the number of\nShares offered shall be allocated to those Remaining Shareholders who have\noffered to purchase a number of Shares greater than the number allocated to such\nRemaining Shareholders in the first allocation. Such allocation shall be based\non a fraction, the numerator of which is the number of Shares outstanding held\nby each such Remaining Shareholder and the denominator of which is the number\nwhich is the aggregate number of Shares outstanding held by all Remaining\nShareholders who have offered to purchase a number of Shares greater than the\nnumber allocated to them. For the purpose of accomplishing the allocations set\nforth herein, the Secretary of the Company shall make the allocations and his or\nher determination as to the allocations shall be conclusive.\n\n\n                                     Page 2\n\n               (3) If the maximum number of Shares to be purchased by the\nRemaining Shareholders is less than the Shares offered by the Offering\nShareholder available for purchase by the Remaining Shareholders, or after\nsuccessive allocations each Remaining Shareholder has been allocated the maximum\nnumber of Shares agreed to be purchased by him or her, and all Shares offered by\nthe Offering Shareholder are still not allocated to a Remaining Shareholder,\nthen the Company shall have the option to purchase the unallocated portion\nwithin the Second Option Period upon the same terms as were available to the\nCompany in the Option Period.\n\n               (4) If neither the Company nor the Remaining Shareholders\nexercises the right to purchase the entirety of the Shares within the time\nprovided for such exercise, the Offering Shareholder shall be free to sell any\nremaining Shares so offered pursuant to the Offer, and only pursuant to the\nOffer, for a period of sixty (60) days following the end of the Second Option\nPeriod, provided, however, that the transferee of those Shares must first agree\nin writing to be bound by the terms and conditions of this Agreement that apply\nto the Shareholder. If no such sale is made by the Offering Shareholder within\nsuch 60-day period, then the restrictions set forth in this Agreement shall\nthereafter continue to apply to the Shares and no Stock, nor any interest\ntherein, shall thereafter be disposed, whether pursuant to an Offer or\notherwise, without again first complying with all of the provisions of this\nAgreement.\n\n2.2 This section remains only so as to preserve the numbering in this Agreement.\n\n2.3 Closing. The closing of any purchase and sale under this Article 2 shall\ntake place at the principal office of the Company at the date designated by the\nCompany, which shall not be more than ninety (90) days after the written consent\nof the Company pursuant to Section 2.1(a) or ninety (90) days after the end of\nthe Second Option Period pursuant to Section 2.1(b).\n\nARTICLE 3\nThis article remains only so as to preserve the numbering in this Agreement.\n\nARTICLE 4\nThis article remains only so as to preserve the numbering in this Agreement.\n\nARTICLE 5\nVALUATION AND PAYMENT OF TERMS\n\n5.1 Agreed Valuation and Terms. For purposes of Article 2, the value per share\nof the Stock and the terms of the purchase or redemption shall be determined\nannually by a majority vote of the Company's Board of Directors at the Company's\nannual Directors' meeting, which is scheduled for December 31 of each year, or\nat any other time prior to the closing of the proposed purchase or redemption.\nIf the necessary vote cannot be obtained or if the Offering Shareholder objects\nto the value established by the Company's Board of Directors, then the value per\nshare shall be established pursuant to Section 5.4, and the terms of purchase or\nredemption shall be those most recently adopted by the Directors pursuant to\nthis Section 5.1, or if no such terms have been so adopted or if the Offering\nShareholder objects to such terms, then those terms described in Section 5.2\nbelow.\n\n5.2  Initial Valuation and Terms.\n\n        a) The initial value per share of the Company's Stock is the book value.\n\n        b) The terms for payment are a down payment of ten percent (10%) of the\npurchase or redemption price (or more at the purchaser's option) with the\nbalance to be paid in sixty (60) equal monthly installments of principal and\ninterest including interest on the declining principal balance calculated so\nthat the entire principal balances of the note shall be paid in full on the\nfifth anniversary of the note.\n\n                                     Page 3\n\n5.3 Book Value. If the 'book value' shall be used as the measurement of value,\nper share, the following definition of 'book value' shall apply:\n\nCapital Stock plus retained earnings plus additional paid-in capital as of the\nlast day of the month preceding the date of purchase ('Valuation Date'), as\ndetermined by the accountant regularly employed by the Company or, if no\naccountant is regularly employed by the Company, then by an accountant selected\nby mutual agreement of the parties.\n\n5.4 Alternative Appraisal Value. If a valuation as provided for in Section 5.1\nis not recorded for a particular year, the last previous valuation shall be\nused; except that if no valuation is recorded within eighteen (18) months\npreceding the proposed disposition, then in the event that the parties cannot\nagree to use the last previous recorded valuation, the value per share shall be\ndetermined by three appraisers. Within fifteen (15) days of the date that use of\nthe last previous recorded valuation was rejected, the rejecting party shall\nselect an appraiser and notify the other of the appraiser's name and address.\nWithin fifteen (15) days after receipt of that notice, the remaining party shall\nselect an appraiser and notify the first party of the name and address of such\nappraiser. If any party is unable to or unwilling to agree upon an appraiser\nwithin fifteen (15) days of the time designated for such selection, then the\nappraiser shall be selected by the presiding judge of the King County Superior\nCourt. The two appraisers selected by the parties shall promptly appoint a third\nappraiser as soon as practical. The three appraisers shall evaluate and agree\nupon the value per share of the Stock as soon as practical after their\nselection; the vote of two such appraisers shall be sufficient to establish the\nvalue per share. The appraisers need not be licensed appraisers but should be\nexperienced in business matters and shall be independent of all parties. Each\nparty shall pay the fee charged for that party's appraiser; the fee charged by\nthe third appraiser and any costs related to the appraisal shall be borne\nequally by each party.\n\n5.5 Note for Unpaid Balance. Unless otherwise expressly provided herein, any\nunpaid balance owing under this Agreement shall be evidenced by an installment\npromissory note executed by the purchaser to the order of the seller providing\nfor an interest rate equal to the prime rate of Bank of America on the business\nday prior to the closing date. The note shall give the purchaser the option of\nprepaying the principal in full or in part at any time without penalty.\n\n5.6 Setoff. In the event the Company purchases any Stock pursuant to this\nAgreement, the Company shall set off against the purchase price for the Stock\nany indebtedness owed to the Company by such Shareholder or his or her estate,\nwhether or not such indebtedness is then due. If any shareholder or other third\nparty purchases any Stock pursuant to this Agreement, as a condition of the\npurchase, the purchaser agrees, prior to making any payment to the transferring\nShareholder, that the purchaser shall pay to the Company that part of the\npurchase price equal to any indebtedness owed by the seller or his or her estate\nto the Company, whether or not such indebtedness is then due, and such payments\nshall be deemed payments on account of said purchase price or the promissory\nnote issued by such shareholder with respect thereto.\n\nARTICLE 6\nENDORSEMENT OF CERTIFICATE\n\n6.1 The Secretary of the Company shall endorse all certificates representing\nStock owned by the Shareholder and all certificates representing Stock issued or\ntransferred after this Agreement is entered into with the following legend:\n\nThe transfer of the shares represented by this certificate is restricted by the\nterms of a Shareholder's Agreement between the Shareholder and the Company dated\n_______________, 19___, a copy of which is on file in the office of the Company.\n\n\n                                     Page 4\n\nARTICLE 7\nTERMINATION OF THIS AGREEMENT\n\n7.1 Termination. This Agreement shall terminate at such time as the Common Stock\nof the Company is listed on a recognized United States national securities\nexchange or is traded in an over-the-counter market.\n\nARTICLE 8\nAGREEMENT BINDING UPON TRANSFEREES\n\n8.1 Except as otherwise provided for in this Agreement, in the event that any\nStock is at any time disposed of or transferred to any party pursuant to the\nprovisions hereof, the transferee shall take such Stock pursuant to all the\nterms, provisions, conditions, and covenants of this Agreement, and the\ntransferee shall, as a condition precedent to the valid transfer of such Stock\nto such transferee, be bound, and agree (for and on behalf of himself or\nherself, his or her legal and personal representatives, his or her assigns, and\nhis or her transferees, direct or indirect) in writing to be bound, by all\nprovisions of this Agreement, including Article 9 in the case of a disposal or\ntransfer from an Employee Shareholder.\n\nARTICLE 9\nGRANT OF IRREVOCABLE PROXY\n\n9.1 Definition of Total Disability. As used in this Agreement, the term 'Total\nDisability' refers to a condition resulting from injury or illness to the\nEmployee Shareholder which prevents the Employee Shareholder from performing the\nduties he or she has previously performed, and could be reasonably expected to\nperform on behalf of the Company, for a period of 365 consecutive days (the\n'Disability Period'), and Total Disability shall be deemed to occur on the first\nday following the initial 365 day period (the 'Total Disability Date'). In the\nevent that the disabled Employee Shareholder returns to the Company within the\nDisability Period, but can fully perform the required services for less than\nthirty (30) days, and then relapses to his or her disability, the Disability\nPeriod shall not be considered to have been interrupted. In the event the\nCompany has disability insurance protection on the Employee Shareholder, or the\nEmployee Shareholder has an individual policy, the receipt of such disability\ninsurance payments shall be deemed proof that the Employee Shareholder is\ndisabled, and the waiting period and periods during which such Employee receives\ndisability payments from such insurance, shall be deemed proof of the extent of\ntime the Employee Shareholder has been disabled. Any dispute as to whether or\nnot an Employee Shareholder is 'Totally Disabled' and for how long he or she has\nbeen disabled as defined in this Agreement, shall be settled by mediation and\/or\narbitration in accordance with the provisions of this Agreement.\n\n9.2 Grant of Irrevocable Proxy. The Employee Shareholder hereby grants to the\nCompany an irrevocable proxy to vote all of the Stock held by the Employee\nShareholder upon or subsequent to his or her death, Total Disability as defined\nabove, or termination of employment with the Company, without regard to when or\nfor what reason, if any, such employment shall terminate. Such proxy is coupled\nwith an interest arising out of the terms of the Agreement, and such continues\nso long as this Agreement remains in full force and effect.\n\nThe irrevocable proxies described in this Article 9 shall remain in effect until\nthe Company has issued and has outstanding shares of Common Stock held of record\nby 300 stockholders or more and the Common Stock of the Company is quoted on a\nrecognized United States national securities exchange or the over-the-counter\nmarket.\n\nThis irrevocable proxy is coupled with an interest arising out of the terms of\nthis Agreement, and continues as long as this Agreement remains in full force\nand effect.\n\n                                     Page 5\n\nARTICLE 10\nGENERAL PROVISIONS\n\n10.1 Mediation and Arbitration. All controversies, claims, disputes and matters\nin question arising out of or relating to this Agreement or the breach thereof,\nshall be decided by mediation and\/or arbitration in accordance with this Article\n10.1. The party who seeks resolution of a controversy, claim, dispute or other\nmatter in question shall notify the other party in writing of the existence and\nsubject matter hereof, and shall designate in such notices the names of three\nprospective mediators, each of whom shall be registered with the Seattle,\nWashington office of the American Arbitration Association. The recipient party\nshall select from such list one individual to act as a mediator in the dispute\nset forth by the notifying party. The parties agree to meet with said mediator\nin the City of Seattle within two weeks after the recipient party has received\nnotice of the dispute and agree to utilize their best efforts and all expediency\nto resolve the matters in dispute. The mediation shall not continue longer than\none (1) hearing day without the written approval of both parties. Neither party\nshall be bound by any recommendation of the mediator; however, any agreement\nreached during mediation shall be final and conclusive.\n\nIf the dispute is not resolved by such mediation, it shall be decided by\nmandatory arbitration in accordance with the Commercial Arbitration Rules of the\nAmerican Arbitration Association. Either party may apply to the American\nArbitration Association for a determination of the dispute set forth in the\nnotification thereof by the originating party. The parties agree that the\narbitration shall take place in the City of Seattle, and shall be governed by\nthe laws of the State of Washington. The award entered or decision made by the\narbitrator(s) shall be final and judgment may be entered upon it in accordance\nwith applicable law in any court having jurisdiction thereof. Expense of\nmediation and\/or arbitration shall be shared equally by both parties.\n\n10.2 Successors and Assigns. This Agreement shall be binding upon and inure to\nthe benefit of the parties, their spouses, heirs, legal representatives,\nsuccessors, transferees and assigns.\n\n10.3 Specific Performance. It is agreed that the remedy at law for any breach of\nthis Agreement would be inadequate, and that the aggrieved party shall be\nentitled to injunctive relief as well as damages for such breach.\n\n10.4 Notices. All notices, offers, acceptance, waivers and other acts under this\nAgreement shall be in writing and shall be sufficiently given if delivered to\nthe addresses in person or if mailed, postage prepaid, return receipt requested,\nto the addresses as follows or at any address that such party may designate by\nwritten notice to the other:\n\nIf to the Company:                  Jeffrey P. Bezos\n                                    c\/o Chuck Katz\n                                    Perkins Coie\n                                    1201 Third Avenue, 40th Floor\n                                    Seattle, WA 98101-3099\n\n\nIf to Sheldon J. Kaphan             Sheldon J. Kaphan\n                                    7748 32nd Ave. NE\n                                    Seattle, WA 98115\n\n10.5 Prior Agreements. This Agreement contains the entire agreement between the\nparties and supersedes all prior agreements entered into by the parties relative\nto the subject matter of this Agreement.\n\n\n\n                                     Page 6\n\n10.6 Applicable Law. This Agreement shall be governed by and construed in\naccordance with the laws of the State of Washington. Jurisdiction over and venue\nof any suit arising out of or related to this Agreement shall be exclusively in\nthe state and federal courts of King County, Washington.\n\n10.7 New Shareholders. Nothing in this agreement shall restrict the Company from\nselling shares of its Stock to third persons on such terms and conditions as the\nCompany's Board of Directors deems appropriate.\n\n10.8 Severability. If for any reason any portion of this Agreement shall be held\nto be invalid or unenforceable, the holding of invalidity or unenforceability of\nthat portion shall not affect any other portion of this Agreement and the\nremaining portions of this Agreement shall remain in full force and effect.\n\n10.9 Counsel. The Shareholder acknowledges that he or she is aware of his or her\nright to have independent counsel review this Agreement concerning his or her\nrights and obligations under this Agreement prior to his or her execution of it.\nThe Shareholder represents: (i) that he or she has consulted independent\ncounsel, or by executing this Agreement, waives his or her right to consult with\nan attorney concerning this Agreement; and (ii) that the Shareholder understands\nthe terms of this Agreement and will be bound by this Agreement.\n\n10.10 Investment and Other Warranties. Each Shareholder, by his or her execution\nof this Agreement, acknowledges and understands that, in connection with the\nStock now or hereafter owned by him or her:\n\n        (a) the Shareholder has been fully informed as to the circumstances\nunder which he or she is required to hold the Stock pursuant to the requirements\nof the Securities Act of 1933, as amended (the 'Act');\n\n        (b) the Company has informed the Shareholder that such Stock is not\nregistered under the Act and may not be transferred or otherwise disposed of\nunless such Stock is subsequently registered under the Act or unless an\nexemption from such registration is available; and\n\n        (c) the Shareholder has been informed that the Stock is subject to this\nAgreement and that a restrictive legend, referring to the restrictions set forth\nherein, has or will be placed upon the certificate(s) evidencing such Stock.\n\n\n\n                                     Page 7\n\nIN WITNESS WHEREOF, the parties have executed this Agreement on the date first\nwritten above.\n\nAMAZON.COM, INC.\n\nBy:            Jeff P. Bezos\n\nName:          Jeffrey P. Bezos\n\nTitle:         President\n\nDate:          August 8, 1995\n\n\n\nSHAREHOLDER\n\nSignature:     Sheldon J. Kaphan\n\nName:          Sheldon J. Kaphan\n\nTitle:         ____________________________________\n\nDate:          9 August 1995\n\n\nSPOUSAL CONSENT\n\nBy execution of this Agreement, _______________________ hereby agrees and\nconsents to all the terms and conditions of this Agreement and agrees to be\nbound by such terms and conditions, and does hereby appoint his or her spouse as\nattorney-in-fact in all respects with regard to the Company, its affairs, and\ninterest in the Company's Stock. _______________________ has been informed of\nhis or her right to obtain independent legal counsel concerning this\nShareholder's Agreement and the rights and obligations provided for in this\nAgreement, and by execution of this Agreement, acknowledges having either\nobtained such independent counsel or having waived the same.\n\n                                              By: _______________________\n\n\n                                              ___________________, Individual\n\n\n                                     Page 8\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6645],"corporate_contracts_industries":[9492],"corporate_contracts_types":[9629,9633],"class_list":["post-43932","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-amazoncom-inc","corporate_contracts_industries-retail__books","corporate_contracts_types-securities","corporate_contracts_types-securities__shareholder"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43932","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43932"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43932"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43932"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43932"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}