DIY Legal Forms

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Pledge Of Shares Of Stock

(Dividend and Liquidation Priority)

1. Total Shares. The corporation (Corporation) has the authority to issue [number] shares of Common Stock and [number] shares of Preferred Stock.

2. Par Value. The preferred shares are to be issued at a par value of ........ dollars ($........). The common shares are to be issued with no par value [or, with par value of ........ dollars ($........)].

3. Dividend Preference. Preferred shareholders are entitled to receive dividends on the value of their stock at a rate of ........ percent (........%) per year. Such dividend rights are cumulative. Such dividends shall be paid before any dividends are paid to common shareholders.

4. Liquidation Preference. If Corporation is dissolved or liquidated, the preferred shareholders shall receive the par value of their shares plus any accrued and unpaid dividends before any distribution is made to common shareholders. After such payment, the remaining assets of Corporation shall be distributed solely among the common shareholders, according to their respective shares.

[Alternative Paragraph]

4. On liquidation or dissolution of Corporation, its assets available for distribution to shareholders shall be applied in the following priority:

a. Preferred shareholders shall be paid the par value of their shares plus any unpaid accrued dividends;

b. Common shareholders shall be paid a sum not to exceed ........ dollars ($........) per share, and, thereafter;

c. Preferred and common shareholders shall share in any remaining assets equally, according to their respective shares, with all shareholders participating ratably.

*** If Required By State Law ***

This Section for Notary:

ACKNOWLEDGMENT

State of _________

County of ________ [COUNTY]

On [DATE] before me, [NAME OF NOTARY], notary, personally appeared [NAME OF PERSON(S) INVOLVED], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

Signature ________
Notary

My commission expires: _____

(Seal)