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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 ($........). The common shares are to be
issued with no par value [or, with par value of ........ dollars
3. Dividend Preference. Preferred shareholders are entitled
to receive dividends on the value of their stock at a rate of ........
percent (........%) per year. Such dividend rights are cumulative.
Such dividends shall be paid before any dividends are paid to common
4. Liquidation Preference. If Corporation is dissolved or
liquidated, the preferred shareholders shall receive the par value of
their shares plus any accrued and unpaid dividends before any
distribution is made to common shareholders. After such payment, the
remaining assets of Corporation shall be distributed solely among the
common shareholders, according to their respective shares.
4. On liquidation or dissolution of Corporation, its assets
available for distribution to shareholders shall be applied in the
a. Preferred shareholders shall be paid the par value
of their shares plus any unpaid accrued dividends;
b. Common shareholders shall be paid a sum not to
exceed ........ dollars ($........) per share, and,
c. Preferred and common shareholders shall share in any
remaining assets equally, according to their
respective shares, with all shareholders participating
*** If Required By State Law ***
This Section for Notary:
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.
My commission expires: _____