Form Overview
The Stock Trust Agreement places shares of stock recently repurchased by a Corporation in trust to secure payment to the former shareholder for such shares. The former shareholder is partially paid for the shares in the form of a promissory note. The Trustee holds title to such shares until the shares are properly relinquished to either the former shareholder in the event of a default on the note, or the Corporation upon payment of the note in full. During the term of the trust, the Corporation is entitled to retain any and all voting rights to such shares pursuant an irrevocable proxy granted by the Trustee (Exhibit B). During the term of the trust, the former shareholder is entitled to receive any and all distributions associated with the Shares. The shares held in trust are relinquished to the former shareholder if the Corporation defaults on the note upon notice from the former shareholder. However, the Corporation has the right to object to relinquishment of the shares to the former shareholder by submitting objection notice to the Trustee. In such event, the parties will resolve the dispute through arbitration unless the Corporation withdraws its objection. Once Trustee pays the note in full the Trustee relinquishes the Shares to the Corporation upon receipt of Satisfaction Notice identifying full payment of the note. You can find answers to your questions using our extensive library of
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