This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
1. This deposit is made for the purpose of enabling widely separated stockholders of said the A. B. Company actively and effectively to participate in the control and management of its affairs for the benefit of both said corporation and said stockholders. The shares deposited under this agreement shall remain on deposit with said trustees for a period of --------- years, beginning with the
--------day of ---------, 19-.
2. By the deposit of the within mentioned shares with the X. Y. Trust Company of --------, hereinafter termed the depositary, the within named trustees are vested with the same powers, in all respects as to voting or otherwise, either in person or by proxy, as if the trustees were the absolute owners thereof. The stockholders who have deposited said shares under this contract agree that they will not attempt to vote said shares either in person or by proxy, and that they will not interfere with' the voting of said shares by said trustees.
3. The genuineness of the certificates of stock deposited, in respect to which this certificate of deposit is issued, is not guaranteed, and the trustees reserve the right to call in this certificate upon returning to the holder thereof the certificate so deposited by him in case the genuineness of such certificate is disputed or doubtful.
4. All proceedings of the trustees shall in case of difference be decided by a majority of the votes of the trustees present at a meeting.
5. In case of the death or resignation of any of the trustees, or in case of a vacancy through any cause, the remaining trustees are authorized to fill such vacancy or vacancies, and the person or persons so selected shall have the same powers as if he or they had been originally a trustee hereunder. Any trustee absent or incapacitated through illness may, with the consent of the other trustees, appoint a proxy or substitute who shall represent him and perform his duties hereunder.
6. Said trustees shall not, without the consent of a majority of the certificate holders at a meeting called for that purpose, agree or vote at any stockholders meeting in favor of increasing or reducing the capital* stock of said the A. B. Company, or in favor of issuing preferred stock, or of executing any mortgage on the property of said corporation except as a renewal or refunding of the loans now secured by mortgage.
7. Meetings of the certificate of deposit holders may be convened by the trustees on ten days' notice to each certificate holder mailed to his last known address. The place and time of meetings shall be fixed by the trustees and mentioned in such notice.
8. Each trustee is responsible only for the bona fide exercise of his judgment on the matters and things done by said trustee. No trustee shall be liable for the act or omission of any agent hereunder, nor by reason of any error of law or of any matter or thing done or omitted under this agreement, except for his own malfeasance.
9. Any and all dividends declared and paid upon the shares deposited hereunder shall be paid to the persons appearing by the transfer books of said trustees to be the owners thereof.
10. A charge of--------- per share is to be paid to the depositary on deposit of the within shares for the purpose of defraying the expenses of such deposit and of said trustees.
See references under Sec. 3840.