Fill and Sign the Close Corporation Form

Agreement to Incorporate Close Corporation Agreement made this the       day of       , 20       , between       , herein referred to as Incorporator One, of (Name of Incorporator One)       ;       , herein (Street Address, City, County, State, Zip Code) (Name of Incorporator Two) referred to as Incorporator Two, of       ; (Street Address, City, County, State, Zip Code) And       , herein referred to as Incorporator Three, of (Name of Incorporator Three)       ; Incorporator One, Incorporator Two, and (Street Address, City, County, State, Zip Code) Incorporator Three being jointly referred to as the Incorporators. Whereas, the parties have agreed to organize a for-profit corporation under the laws of       for the purpose of operating a business; and ( Name of State) Whereas, the parties have agreed to subscribe for the common stock and debt of the corporation (the Securities ) as set forth below in this Agreement; For and in consideration of the mutual promises contained in this Agreement, the Incorporators agree to form a corporation under the laws of       , and particularly (Name of State)       , for the purpose of undertaking and carrying on a (Name of State’s Model Business Corporation Act) business or businesses, as follows: I. Incorporation. The parties will incorporate a for-profit Corporation under the laws of       , to be known as       , hereinafter (Name of State) ( Name of Corporation) called the Corporation. II. Purpose and Powers. The Corporation shall be formed for the purpose of engaging in and maintaining a       business and such other lawful businesses (Nature of Business) as may from time to time be determined by the Board of Directors. The authorized corporate purposes shall include any lawful business purpose or purposes which a corporation organized under       of       as may be (Citation of Model Business Corporation Act) (Name of State) Agreement to Incorporate Close Corporation Page 1 of 13 permitted to undertake including, but not limited to the following: A. To sue and be sued, complain and defend in its corporate name B. To have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it; C. To make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for managing the business and regulating the affairs of the corporation; D. To purchase, receive, lease or otherwise acquire, and own, hold, improve, use and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located; E. To sell, convey, mortgage, pledge, lease, exchange and otherwise dispose of all or any part of its property; F. To purchase, receive, subscribe for, or otherwise acquire; own, hold, vote, use, sell, mortgage, lend, pledge or otherwise dispose of; and deal in and with shares or other interests in, or obligations of, any other entity; G. To make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds and other obligations (which may be convertible into or include the option to purchase other securities of the corporation), and secure any of its obligations by mortgage or pledge of any of its property, franchises or income, and make contracts of guaranty and suretyship which are necessary or convenient to the conduct, promotion or attainment of the business of (i) a corporation all of the outstanding stock of which is owned, directly or indirectly, by the contracting corporation, or (ii) a corporation which owns, directly or indirectly, all of the outstanding stock of the contracting corporation, or (iii) a corporation all of the outstanding stock of which is owned, directly or indirectly, by a corporation which owns, directly or indirectly, all of the outstanding stock of the contracting corporation, which contracts of guaranty and suretyship shall be deemed to be necessary or convenient to the conduct, promotion or attainment of the business of the contracting corporation, and make other contracts of guaranty and suretyship which are necessary or convenient to the conduct, promotion or attainment of the business of the contracting corporation; H. To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment; I. To be a promoter, partner, member, associate or manager of any partnership, joint venture, trust or other entity; J. To conduct its business, locate offices and exercise the powers granted by Agreement to Incorporate Close Corporation Page 2 of 13       within or without this (Cite appropriate statues of State’s Model Business Corporation Act) state; K. To elect directors and appoint officers, employees and agents of the corporation, define their duties, fix their compensation and lend them money and credit; L. To pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans and benefit or incentive plans for any or all of its current or former directors, officers, employees and agents; M. To make donations for the public welfare or for charitable, scientific or educational purposes; N. To transact any lawful business that will aid governmental policy; O. To make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation. III. Principal Office. The principal office for the transaction of the business of the Corporation shall be located in       , and       . (Name of County) ( Name of State) IV. Capitalization. The authorized capital of the Corporation shall be $       of authorized capital. The authorized capital stock of the Corporation shall be one class of common stock. V. Stock Subscription. Each of the Incorporators subscribes as capital of the Corporation the sum set out opposite the Incorporator's name below and agrees to accept in exchange for the amounts so specified the shares of stock following the names of the Incorporators: Names of No. of Shares Dollar Amt. Subscription Incorporators                                                                         VI. Incorporation; Permit to Issue Shares; Payment of Subscription. The Incorporators shall cause the Corporation to be formed under the provisions of       (citation of State’s Model       , formed within       days from the date of this Business Corporation Act) Agreement, and then with all reasonable diligence shall cause the Corporation to apply for and secure any necessary permit authorizing issuance of stock as above subscribed and then issue such stock after receiving the above stated dollar amounts. Agreement to Incorporate Close Corporation Page 3 of 13 VII. Signing Articles; First Directors. The parties to this Agreement, or so many of them as may be necessary for the purpose, shall sign the Articles of Incorporation as Incorporators. The persons named below shall be designated in the Articles of Incorporation as the first directors of the Corporation and shall serve as such until their respective successors are duly elected and qualified: Names of Directors Addresses of Directors                                     VIII. Officers. The Bylaws to be adopted at the first meeting of the Board of Directors shall provide for the following corporate officers: President, Vice President, and Secretary-Treasurer. The offices shall be filled by the Board of Directors at their first meeting by electing the following-named persons, each of whom has agreed to serve in the indicated office for the term designated in the Bylaws and at the monthly salary shown after his or her name, until his or her successor is duly elected and qualified. Title of Officer Name of Officer Monthly Salary                                                                         IX. Employment of Attorney. The Incorporators promptly shall employ       as corporate legal counsel for the following purposes: (Name of Attorney) A. Drafting the Articles of Incorporation, Bylaws, and any other documents required or convenient to the formation of the Corporation; B. Advising the Incorporators and the Corporation upon its formation with respect to each step in its organization; and C. To serve until other counsel is selected by the Corporation as its legal counsel. Charges for such legal services and all fees of state and county offices required in the process of incorporation and all other costs and charges of incorporation, including franchise tax, if any, certification, and seal, shall be expenses of the Corporation to be paid by the Corporation following its organization and the receipt of funds upon subscription. Each of the undersigned Incorporators promises to advance such costs as required in proportion to the amounts of their several stock subscriptions . Agreement to Incorporate Close Corporation Page 4 of 13 X. Close Corporation Status. A. The Corporation shall be qualified as a Close Corporation. Accordingly, all things shall be done to insure qualification of the Corporation as a close corporation. If anything necessary to qualify as a close corporation is overlooked during the organization of the corporation or subsequently, the parties agree that they shall take such steps as are appropriate to qualify the Corporation as a close corporation. B. After organization of the Corporation, the parties shall observe all the requirements necessary to continue close Corporation status, until such time as the close Corporation status is terminated as provided in this Agreement. Notwithstanding anything to the contrary in this Agreement, no actions may be taken by the Corporation, or by any of the stockholders, including issuance of additional shares, which would have the effect of disqualifying the Corporation as a close Corporation under       , unless such action is agreed to by the (citation of state statute) unanimous vote of all parties to this Agreement and any transferees of shares of the parties to this Agreement. XI. Articles of Incorporation. The parties shall cause the execution and filing of the Articles of Incorporation in the form set forth as Exhibit A which is attached to this Agreement and incorporated by this reference. X. Bylaws. Attached to this Agreement as Exhibit B and incorporated by reference are a set of Bylaws which shall be the Bylaws of this Corporation and which the parties shall cause to be adopted after formation of the Corporation. XI. S-Corporation Status. This Corporation shall elect to be an S-Corporation. All the parties to this Agreement agree to cause the Corporation to file, and shall execute as stockholders, any form necessary to be filed with the Internal Revenue Service in order to obtain S-Corporation status. It is understood by all parties that S-Corporation status would be terminated if there is any transfer of shares of this Corporation to a party who elects to terminate the S election, or to sufficient parties to increase the number of stockholders beyond the maximum allowed under the S-Corporation provision of the Internal Revenue Code. Accordingly, all parties agree not to transfer their stock in any way that would cause a termination of the Corporation's S-Corporation election except pursuant to unanimous Agreement to the contrary entered into by written amendment of this Agreement. Therefore, any party who desires to transfer shares of the Corporation to someone who is not a party to this Agreement shall have no right to transfer such shares to any third party who does not agree prior to such transfer, in writing, to join in the election of S-Corporation status. The foregoing restriction upon transfer of shares is in addition to, and not in place of, any other restrictions created by this Agreement and shall appear as a legend on the Corporation's stock certificates. XII. Termination. This Corporation shall be terminated, and the parties agree to then wind up the affairs of the Corporation and to liquidate and dissolve the Corporation upon       (Number) Agreement to Incorporate Close Corporation Page 5 of 13 days' written notice in the event of any of the following, in which case the mutual rights and duties of the parties may also be settled in the manner set forth in this Agreement: A. Claimed breach of this Agreement, coupled with failure of the other stockholders to negotiate and consummate a purchase of the Corporation's stock from such claimant. B. Conduct of a stockholder detrimental to the Corporation, coupled with failure of the stockholders to negotiate and consummate a purchase of the stockholder's stock pursuant to the terms of this Agreement. C. Filing of a petition in bankruptcy against a stockholder, coupled with failure of the stockholders to negotiate and consummate a purchase of the shares of a stockholder whose assets have become subject to a petition in bankruptcy. D. Adjudication of insanity or incompetence of a stockholder coupled with failure of the stockholders (including any guardian or conservator of a stockholder) to negotiate and consummate a purchase of the insane or incompetent stockholder's stock. E. Issuance of a lien or levy of writ of attachment or writ of execution against the shares of any stockholder without immediate removal of such lien or levy, coupled with failure of the stockholders to negotiate and consummate a purchase of the shares of the stockholder whose shares have been subject to such attachment or execution. Any transfer of ownership of shares of a stockholder by operation of law pursuant to a writ of execution or otherwise shall be deemed a breach of this Agreement. If any stockholder attempts to transfer his or her shares in violation of the restrictions on such transfer contained in this Agreement, the remaining parties shall have the option and the right to cause voluntary dissolution of the Corporation at once, and shall have an irrevocable proxy to vote the shares in favor of a voluntary dissolution of the Corporation. XIII. Continuing Obligation. A party's withdrawal shall not release such withdrawing party from any obligation he or she has to the Corporation or to the other parties. XIV. Cessation of Business. Upon termination and dissolution of the Corporation, no further business will be transacted other than winding up of Corporation affairs, collection of outstanding accounts and payment of outstanding liabilities, and liquidation of the Corporation. XV. Division of Assets upon Liquidation. Upon liquidation, Corporation assets shall be divided in the following order: A. Expenses of liquidation and debts of the Corporation other than debts owing to stockholders shall be paid first. B. Next, there shall be paid debts owing to stockholders, including business loans and advances by stockholders to or for the benefit of the Corporation. C. The remaining assets shall be distributed to the stockholders of the Corporation in proportion to their rights to such assets under the Articles of Incorporation, or under the terms of this Agreement, whichever is controlling. Agreement to Incorporate Close Corporation Page 6 of 13 XVI. Restrictions on Distributions. No dividends, distributions or payments for or upon shares shall be made by the Corporation if such dividends, distributions or payments for or upon shares would be in violation of any provision of       . Before any (Cite State Statute) dividends, distributions or payments for or upon shares are made, the stockholders, directors and officers shall consult with the Corporation's legal counsel and accountant to obtain their opinion as to whether such dividends, distributions or payments for or upon shares may be made legally. XVII. Identification of Source of Distribution upon Shares. Each distribution to stockholders other than one chargeable to retained earnings shall be identified in a notice to stockholders as being made from a source other than retained earnings, stating the accounting treatment of such distribution. Such notice shall accompany the distribution or shall be given within       (Number) months after the end of the fiscal year in which the distribution has been made. XVIII. Irrevocable Proxy. All parties to this Agreement shall vote their own shares. However, all parties agree to vote their shares in favor of all actions required explicitly or implicitly to be taken under this Agreement and against any action explicitly or implicitly contrary to this Agreement. If any party to this Agreement should attempt to vote his or her shares contrary to the provisions of this Agreement, such vote shall be disregarded and shall have no force and effect, and immediately and automatically upon the attempt to vote such shares contrary to the terms of this Agreement, the other parties shall have a proxy to vote such shares in the manner required by the terms of this Agreement. Such proxy shall be deemed an irrevocable proxy which continues during the term of this Agreement. XIX. Initial Directors. The Corporation initially shall have       directors who shall be: (Number) be: Name Address                                                                                     Agreement to Incorporate Close Corporation Page 7 of 13       XX. Initial Officers. The initial officers of the Corporation shall be: Chairperson:       (Name of Chairperson) President:       (Name of President) Vice President:       (Name of Vice President) Secretary:       (Name of Secretary) Treasurer:       (Name of Treasurer) XXI. Employment Contract. The Corporation shall employ       (Name of Employee) as the       of the Corporation for a period of not less than (title of employee)       months and shall pay him $       per year for his services as such; the amount to be paid in biweekly installments of $       , the first such payment to be paid on       .       shall have the authority to: (Date) (Name of employee) A. Acquire and dispose of assets. B. Borrow money and give security for the same. C. Enter into contracts. D . Deposit and withdraw corporate funds. E. Employ and dismiss employees and establish their wages. F. Establish corporate procedures. G. Determine hours of operation. H. Advertise. I. Do such other things, as he in his sole and reasonably exercised discretion, shall deem necessary to successfully establish, operate and manage the Corporation. The Corporation and       shall enter into an employment (Name of Employee) contract with the following fringe benefits: A. Medical insurance with the following features: 1. Hospital. Agreement to Incorporate Close Corporation Page 8 of 13 2. Room and board: $       per day. 3. Maximum No. of days:       . 4. Intensive care additional: $       per day. 5. Intensive care no. of days:       . 6. Maximum extra charges: $       . 7. Surgical schedule:       . (State surgical schedule) 8. Anesthesia:       . (State anesthesia benefits) 9. In-hospital benefit:       . (Statement of in-hospital benefits) 10. Hospital out-patient:       . (Statement of hospital out-patient benefits) 11. Supplemental accident:       . (Statement of supplemental accident benefits) 12. Radiation therapy:       . (Statement of radiation therapy benefits) 13. Diagnostic X-ray and lab:       . (Statement of X-ray and laboratory benefits) 14. Maternity:       . (Statement of maternity benefits) B. Major medical: 1. Maximum: $       . 2. Deductible: $       . 3. Coinsurance:       %. 4. Prescription drugs:       . (Statement of prescription drug benefits) 5. Outpatient:       . (Statement of outpatient benefits) 6. Convalescent care:       . (Statement of convalescent care benefits) C. Dental: 1. Deductible/family:       . ( Statement of deductible and family benefits) 2. Oral exams, etc.:       . (Statement of oral exam benefits) 3. X-Rays, fillings, etc.:       . (Statement of dental benefits for procedure) 4. Bridges, dentures, crowns, etc.:       . (Statement of dental benefits) Agreement to Incorporate Close Corporation Page 9 of 13 5. Maximum benefit: $       . D. Carrier:       . (Name of carrier) E. Disability insurance with the following features:                               (Description of disability insurance coverage) F. Medical reimbursement: maximum benefit per corporate fiscal year: $       . G. Group term life insurance: death benefit: $       . H. Group whole life insurance: death benefit: $       . I. Fully paid vacation days per year:       . (Number) J. Fully paid sick days per year:       . (Number) K. Use of car: 1. Make and model:       and       . (Name of manufacturer) (model) 2. Reimbursement per business mile: $       per mile. 3. Repair policy:       . (Statement of repair policy) L. Education benefits -- work related: 1. Days fully paid:       . (Number) 2. Maximum course charge per day: $       per day. 3. Maximum hotel allowance: $       per day. 4. Maximum meal allowance: $       per day. 5. Maximum entertainment: $       per day. M. Qualified retirement plan benefit which has the following features: 1. Name of Plan:       . (Name) 2. Minimum age for participation:       . (Minimum age) Agreement to Incorporate Close Corporation Page 10 of 13 3. Minimum service for participation:       . (Number of Months, Years, or Months and Years) 4. Categories of Employment status:       . (Categories) 5. Vesting:       . (Vesting Schedule) 6. Corporation contribution formula:       . (Contribution Formula) 7. Employee contribution formula:       . (Contribution Formula) 8. Effective date of plan:       . (Date) 9. Initial committee members:       . (Names) 10. Initial trustees:       . (Names) 11. Initial contribution: $       . N. A deferred compensation plan which has the following features: 1. Benefit on death: $       . 2. Benefit on disability: $       . 3. Benefit on retirement or termination before age 65: $       . 4. Benefit on retirement or termination after age 65: $       . O. Reimbursement for: 1. Entertainment: not to exceed $       . 2. Travel: not to exceed $       . 3. Hotel per day: $       . 4. Meals per day: $       . XXII. Buy-Sell Agreement. The parties and additional stockholders (if any) shall enter into a Buy-Sell Agreement in substantially the same form as that attached to this Agreement as Exhibit A, with the following features:       . (Description of Buy-Sell Agreement) XXIII. Agreement to be Filed with Corporate Secretary. A copy of this Agreement shall be filed with the secretary of the Corporation for inspection by any prospective purchaser of shares. XXVII. Legend on Certificates. Each certificate for shares issued by the Corporation shall bear a notation or legend giving notice of all of the following which are applicable: (i) the fact that the shares represented by the certificate are subject to restrictions upon transfer imposed by the Agreement to Incorporate Close Corporation Page 11 of 13 stockholders' Agreement; (ii) the fact that the shares represented by the certificate are subject to a voting Agreement or an irrevocable proxy; (iii) the legend prescribed by law; (iv) an S- Corporation status legend; and (v) a Blue-Sky legend. XXVIII. Severability. The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision. XXIX. No Waiver. The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. XXX. Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of       . (Name of State) XXXI. Notices. Unless provided herein to the contrary, any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement. XXXII. Attorney’s Fees. In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party in the action shall pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party's attorney fees. XXXIII. Mandatory Arbitration. Notwithstanding the foregoing, and anything herein to the contrary, any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect. XXXIV. Entire Agreement. This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement. XXXV. Modification of Agreement. Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party. XXXVI. Assignment of Rights. The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party. Agreement to Incorporate Close Corporation Page 12 of 13 XXXVII. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. XXXVIII. Compliance with Laws. In performing under this Agreement, all applicable governmental laws, regulations, orders, and other rules of duly-constituted authority will be followed and complied with in all respects by both parties. WITNESS our signatures as of the day and date first above stated. By: By: (Signature of Incorporator One ) (Signature of Incorporator Two)             (Signature of Incorporator One ) (P rinted Name of Incorporator Two ) By: (Signature of Incorporator Three )       (P rinted Name of Incorporator Three ) Agreement to Incorporate Close Corporation Page 13 of 13