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How to Structure a Stock Purchase Agreement (Template) Posted: 10 Feb 2021 05:30 AM PST Between 1996 and 2017, the number of companies that publicly traded stocks changed drastically. The roughly 50% drop in the number of public U.S. companies during this period suggests that a significant amount of stock exchanges are taking place far away from Wall Street. And that leads us to stock purchase agreements. With stock purchase agreements, you can sell shares of your company directly to buyers outside of the stock market. With the money you raise from these sales of company stock, you can fund new business initiatives without going public. And since you and your buyers sign legally binding agreements, you can protect your assets – and company – as you raise money. Below, learn more about these contracts and find a stock purchase agreement template. What is a stock purchase agreement? A stock purchase agreement is a two-party contract that dictates transactions around a company's shares. Stock purchase agreements are common among small corporations; they provide capital while allowing you, the business owner, to retain a controlling interest. Usually, a stock purchase agreement will empower both the business owner and your company's shareholders to sell stocks. How does a stock purchase agreement work? A stock purchase agreement formally transfers ownership of your company's stocks between two parties. When shares of your company's stocks exchange hands, your company's ownership also changes. Someone who sells all of their stocks to another party no longer has any stake in your company. The new buyer, though, now has a stake in your company equal to what the seller previously had (or more, if the buyer already had stock in your company). Stock purchase agreements differ from asset purchase agreements. Although both agreements have similar frameworks, the latter governs transactions of specific assets or liabilities rather than shares of company ownership. For example, if you sell your equipment to another company, you may want to sign an asset purchase agreement, since no company ownership changes will occur. If you instead sold shares of your company to this other party, a stock purchase agreement would be in order. Notably, when buyers purchase shares of your company, they assume all assets and liabilities tied to your stocks even if you do not disclose them. Who needs a stock purchase agreement? Financial regulations state that, for any stock transaction, both parties must give written consent. If you're preparing to sell stocks in your company, you'll want to have a stock purchase agreement template readily available that you can then easily modify to reflect the terms of the sale and the buyer's information. What is included in a stock purchase agreement? You typically see the following in a stock purchase agreement: Your company's name The name and mailing address of the entity buying shares in your company's stocks The par value (essentially the sale price) of the stocks being sold The number of stocks the buyer is purchasing The transaction's date, time and location Seller and buyer warranties and representations Bonuses, benefits and other potential employee issues An indemnification clause to address unexpected costs The above information is typically grouped into several articles that comprise your stock purchase agreement's structure. Stock purchase agreement template Here is a template of a stock purchase agreement that you can copy and paste into a word processing program and save to your company files. This template is intended to serve as a guide only and does not constitute legal advice. Always consult with legal counsel before finalizing and legal documents. I. PARTIES This Stock Purchase Agreement ("Agreement") details the terms and conditions of the contractual agreement between the below parties: Buyer ("Buyer"): [Name, mailing address] Seller ("Seller"): [Name, mailing address] II. SHARES WHEREAS, Seller plans to sell [number] shares of [type] stock, or [number] percent of the outstanding shares belonging to [Your company name] ("Company"), a [State] corporation, and WHEREAS, Buyer plans to purchase the stock and agrees to the terms and conditions outlined below. THEREFORE, Buyer and Seller (individually, "Party"; together, "Parties") agree as follows: III. PRICE Seller will sell each individual stock to Buyer for $ [number]. Buyer will thereby pay a total of $ [number] to the buyer. [Optional inclusion: Within [number] days of signing this agreement, Buyer will place a deposit of $ [number] to Seller.] IV. CLOSING DATE Upon signing the Agreement, Seller shall commence the transfer of shares to Buyer. The closing of this transaction shall take place on or before [date] ("Closing Date"). On the Closing Date, Buyer shall send money to Seller via [specific money transfer method]. [Optional Clause] V. DUE DILIGENCE  Buyer requires a due diligence period in which Buyer will inspect the finances of Seller and Company. Buyer will have sole discretion over whether the shares are valid for the intended sale, with Buyer's decision being final and binding for the Parties. Buyer shall deliver the verdict of their due diligence no later than [month and day], [year] at [time]. Should Buyer choose to terminate this Agreement after performing due diligence, all deposits made shall be returned to Buyer. VI. REPRESENTATIONS Seller represents, warrants and agrees to and with Buyer as follows on the Closing Date. The Company is a legally recognized corporation formed according to the laws of [State]; The Company is in good legal standing in [State]; Seller and the Company are not aware of government or third-party proceedings, investigations or claims against the Company; Seller claims full ownership of the shares being sold; Seller holds share titles void of restrictions on transfer, encumbrances or other title defects; Seller is able, by state and federal law as well as Company bylaws, to enter into and carry out the Agreement, including the offer, sale and transfer of shares to Buyer and has taken all required steps to legally do so; Seller is not a party to any contract regarding the shares being sold; There are no restrictions, other than relevant securities laws, regarding the offer, sale and transfer of the shares. VII. INDEMNIFICATION Buyer and Seller agree to indemnify both Parties from and against all claims, liabilities, losses, damages, costs and expenses (including attorney's fees) arising directly or indirectly from: Failure to execute the obligations established in this Agreement; Inaccuracies or breaches in representations and warranties established in this Agreement; Actions, suits, arbitration, litigation, investigations, proceedings, claims or liabilities that arise as a result of the sale of shares. VIII. MODIFICATION  No modification will be made to this Agreement unless in writing and signed by the Parties. IX. ENTIRE AGREEMENT  This agreement comprises the entire agreement of both Parties relating to the subject matter herein and supersedes all prior written and oral agreements, understandings, discussions and negotiations between the Parties. X. VENUE  This Agreement and the terms herein shall be construed and governed in accordance with the laws of the State of [State]. The Parties irrevocably submit to the jurisdiction of any and all federal and state courts located in [County], [State]. IN WITNESS WHEREOF, both Parties have agreed to this Stock Purchase Agreement electronically or in person by duly authorized officers as of the below day and year. Buyer's Signature: Print Name: Date: Seller's Signature: Print Name: Date:

What Are Qualifying Life Events, and How Do They Impact Your Health Insurance? Posted: 10 Feb 2021 04:30 AM PST Each year, health insurance providers hold an open enrollment period, during which employees of the companies they serve can sign up for coverage or make changes to their existing coverage. For most employees, this is the only time of the year they can make these designations or changes to their health insurance benefits. The exceptions are when they experience a qualifying event, also known as a "qualifying life event." It is your responsibility as a business owner to ensure you and your employees understand what a qualifying event is, and how to avoid potentially expensive gaps in coverage. What is a qualifying event? A qualifying event is a milestone in a person's life that makes them eligible to take advantage of a "special enrollment period" – a span of time outside the open enrollment period during which individuals can make and act on decisions about their health insurance coverage. For example, if an employee has a baby or adopts a child, they can add the child to their insurance plan without waiting for open enrollment. "Numerous qualifying life events exist, but what they all have in common is the potential to significantly alter your health insurance or preferences," said independent health insurance agent Michael McNulty of Mayfair Medicare. "And whether your new circumstances demand greater protection, affordability, or flexibility, you can use the special [enrollment] period after a qualifying life event to adjust your coverage." [Need help with open enrollment and health insurance benefits? Learn how a PEO can help. Check out our best picks and reviews.] Which events are considered a qualifying event? There are four types of qualifying events: Changes in household Marriage Divorce or legal separation from a spouse Birth or adoption of a child Placement of a foster child Death of an immediate family member who was covered by the health insurance plan Changes in residence Moving outside the service area of an existing healthcare plan Moving to or from a shelter or other transitional housing For students, moving to or from the place they attend school For seasonal workers, moving to or from the place they live and work Loss of health coverage Turning 26 years old and, as a result, becoming ineligible for healthcare coverage under a parent's plan Losing existing health coverage, including employer-sponsored, individual, or student coverage Losing eligibility for Medicare, Medicaid or the federal Children's Health Insurance Program (CHIP) Other Changes in income that affect the coverage for which employees are qualified Becoming a U.S. citizen Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) corporation shareholder Leaving incarceration (jail or prison) Being discharged from active duty in the U.S. armed forces Starting or finishing service in AmeriCorps  Under what circumstances are employees ineligible for the special enrollment period? Employees who have lost healthcare coverage because their health insurance premiums were not paid cannot purchase other healthcare coverage due to a qualifying life event, said James Major, founder and owner of insurance quote comparison portal Insurance Panda. Committing a fraudulent act also makes people ineligible to use a qualifying event to modify or add health insurance coverage. A divorce or legal separation is a qualifying life event only if the employee loses healthcare coverage provided by their former spouse's employer. Employees who already have their own healthcare policy at the time of divorce are not eligible for the special enrollment period. How long does the special enrollment period last? Time restrictions can vary according to circumstances, and certain special enrollment periods in Medicare can be valid for up to a year. In general, though, the special enrollment period lasts 60 days. That countdown starts the day the qualifying event occurs. If, for example, an employee gets married on Jan. 14, the special enrollment period begins on Jan. 14 and ends on March 14. "You'll have 60 days from the date of the qualifying event to update your coverage," said Melanie Musson, health insurance specialist at USInsuranceAgents.com. "If you don't do it within that time limit, you'll have to wait until the next open enrollment period." Employees who are without healthcare coverage because they didn't take advantage of the special enrollment period could suffer a big financial blow, such as a staggering hospital bill in the case of an unforeseen emergency. How can employers help employees when it comes to qualifying events and the special enrollment period? It is critical for employers to educate their employees about qualifying events and remind them to utilize the special enrollment when necessary. "I would encourage employers to be proactive in how they share information about qualifying events," McNulty said. "A best practice is to educate new employees on what a qualifying event is during initial onboarding, or whenever insurance options are shared with employees." If you learn that an employee has a qualifying event coming up – for instance, they announce that they are getting married or expecting a baby – make a note of it, and remind them to make the appropriate changes to their coverage within the special enrollment parameters. Just as importantly, urge employees to ask any questions about healthcare plans available through your company and to discuss their options. You can also take some stopgap measures to help employees. At one time or another, you will probably have employees who are in between enrollment periods but do not qualify for the employer-sponsored healthcare plan because they have not yet experienced a qualifying event. Michael Hammelburger, CEO of The Bottom Line Group, said one option is to provide those employees with short-term health insurance to fill in the gap. This is temporary health coverage for doctor visits, emergency room or urgent care visits, and preventive care. What can employees do to avoid missing out on special enrollment when they have a qualifying event? 1. Keep employers abreast of upcoming life changes. Many qualifying events are unforeseen. But others, like getting married or having a baby, can be prepared for well in advance. Employees should keep their employer in the know about any upcoming qualifying events so both parties can discuss any new health insurance options the event might trigger. If you are in this situation, be proactive to ensure you have the time to study all of the available options. 2. Be prepared to submit documentation. Employees may be required to prove that a qualifying event has occurred. For example, they might need to produce a marriage certificate, a divorce decree, a birth certificate or adoption papers. Failure to prepare and submit these documents can cause issues. Even if you end up not needing it, you should keep this documentation on hand so you aren't scrambling to find it at the last minute. A qualifying event can be happy or not. Either way, employers and employees must pay close attention to the special enrollment period, in turn maximizing employees' healthcare coverage and minimizing risk.

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