Chapter 4 - THE SHAREHOLDER AGREEMENT
Ethan requested the family shareholder agreement.
Diane refused.
“You don’t need it.”
He stared.
“I’m a shareholder.”
“You have counsel.”
“Then send it.”
She hung up.
That was new.
Ethan called company attorney Rachel Sloan.
Rachel hesitated.
Then said:
“You should have received the amended family agreement after Sophie was born.”
“I didn’t.”
Silence.
“Why?”
“I sent it to Diane as trustee for distribution.”
Ethan went still.
Rachel forwarded the document.
Page forty-two.
Section 11.4.
FIRST-DESCENDANT INCENTIVE BLOCK.
Upon the birth of the first lineal grandchild of William Collins, a 6% non-voting economic interest would be assigned to a protected descendant trust for that child.
At age twenty-five, subject to education and governance conditions, half could convert to voting shares.
No male preference.
No grandson.
No surname condition.
Sophie had been born first.
The trust should already exist.
Value of 6% economic interest at current internal valuation:
approximately $4.2 million.
Hannah stared.
“Does Sophie have it?”
Rachel answered:
“I don’t know.”
Ethan looked sick.
His mother had been trustee when the triggering event occurred.
May you like
If Diane had failed to implement it, that was not just family favoritism.
It was a fiduciary problem.
