Download Application for an Estate Transaction within a

Estate Transaction within a Family
(Part One)
e-version
Introduction: We are pleased that you are planning to join the Island Inn family by purchasing or
inheriting a share of Island Inn stock. Because you are a family member of an existing shareholder, we
have simplified the application process, but there are certain legal requirements that must be met.
This application must be accompanied by a signed letter from the current shareholder or the estate
administrator requesting that your name be added to the existing shareholder’s Island Inn share
certificate or advising the Inn that you are the estate’s designated or intended purchaser, beneficiary, or
transferee of the share certificate. If there is to be more than one designated or intended purchaser,
beneficiary or transferee of the share certificate, each individual must complete and submit a signed
application.
Part 3, Exhibit A, page A-2 below describes “Accredited Investors.” This is NOT an income or means test
and any answer you select will not influence acceptance of your application, one way or the other. In
addition, you must complete the Application form, which asks for information required by the
Island Inn or that may be necessary to conform to state and federal requirements.
1.
Terms and Conditions for Stock Ownership:
 You read, understand and accept the restrictions on ownership summarized below and as set forth
more fully in the Company’s Articles of Incorporation and Bylaws, as well as the expectations
relating to the perceived limited advantages to share ownership noted below.

You understand that the Island Inn places great emphasis on the “next generation”, that is, what
is the likelihood that your children and/or grandchildren will become legacies and continue as
active guests of the Inn.

You understand and agree that this process does not ensure that you will become a shareholder.
This process is not a subscription agreement or a commitment by the Company to enable you to
acquire a share in the Company. The Company is not hereby offering you any opportunity to
purchase shares from the Company.

You must have read and signed the “accredited investor” provisions as that term is defined in
Regulation D of the guidance promulgated under the Securities Act of 1933, as amended and
applicable laws of your state of residence. (See Island Inn Company Prospective Shareholder
Representative Agreement attached at Part 3, Exhibit A.)
2. Application Form: Please complete the electronic application form in detail. Press the “Tab” key to
move the cursor sequentially through the application form. Manual forms are available on request.
NOTE: Most of your responses may be completed electronically. Space for essay/text information will
automatically expand to accommodate all of your remarks. Signatures must be original. After
completing and submitting the application you will receive a confirmation of receipt.
3. Application Process:

After the VP of Administration has reviewed your application and certified that it is complete, it
will be considered by the Island Inn Board of Directors. The Board will review your application and
you and your sponsor will be notified as to whether or not your application has been approved by
the Board in its sole discretion and no reason need be provided by the Board for its determination.
The Company reserves the right to not approve an application for any reason, including, without
limitation, celebrity status, security concerns, or other perceived impacts on the current
atmosphere and tradition of the Inn. Pursuant to the Island Inn Bylaws, the Board of Directors will
have 90 days to review and decide on the pending application, once all pertinent information has
been received.

As a condition of adding your name to an existing share, you will be asked to sign an agreement
with the Company acknowledging the application of the Company’s Articles and Bylaws to your
share as well as other items set forth therein as determined by the Board from time to time (a
current copy of the required agreement will be provided to you upon request after your
application has been approved by the Board). No transfer will be recognized unless or until it has
been duly recorded in the books and records of the Company and a new stock certificate issued by
the Company to you in your name.
Ownership Considerations: Please carefully consider the following before you decide to apply to be an
approved shareholder of the Company:
1.
2.
Limited Advantages/No Financial Benefits. Shareholders have limited, if any, advantages, other
than participating in the mission of the Company to preserve the “Olde Florida” Inn experience.
a.
Ownership is not required to be a guest of the Inn. Company shareholders do not receive
any discounts, advantageous pricing or other such benefits.
b.
There are no intended or particular financial benefits to share ownership. Share ownership
is not to be seen as an investment in the traditional sense of the word. The Island Inn was
incorporated in 1957 by a small group of dedicated founders determined to preserve “the
atmosphere and tradition of the Island Inn as we have known it.” One Island Inn director
later noted the purpose of the Inn was to “maintain the warm, friendly atmosphere that
pervades the Inn, and to encourage its frequent use by those who share in ownership.” The
founders set up the Company for such purpose for themselves and their families.
Applicants should not expect any financial return on their ownership “investment”, but
should consider share ownership as entitling shareholders to serve as temporary custodians
so that the Inn can be passed on to future generations as a viable business that promotes
and sustains a gracious sense of Olde South Florida. Neither the Company nor the Board
has any expectation of financial gain to individual shareholders, either through the
operations of the Inn or the appreciation of the Company’s assets or any appreciation in
Company shares or otherwise, and no potential shareholder should have any such
expectations.
c.
A shareholder must be in a financial position to hold the share for an indefinite period of
time and must be able to withstand a complete loss of the investment in a Company share.
(See Island Inn Company Prospective Shareholder Representation Agreement attached at
Part 3, Exhibit A.)
d.
The benefit to shareholders is the knowledge that they are actively supporting and
maintaining a special low density environment that is not heavily developed and is being
preserved for the enjoyment of their family as well as future generations.
Control by the Board. The Company is run by the Board in accordance with the Company’s
organizational documents and to carry out the purpose described above.
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3.
No Market for Shares. The Company does not make or maintain a market for Company shares.
Share transactions are conducted between an approved and willing buyer and a willing
shareholder who wishes to sell his/her share.
4.
Company’s Option Right. Article VI of the Company’s Bylaws retain an option for the Company to
purchase any shares being sold, gifted or otherwise transferred by a selling shareholder (or
pledged by a shareholder) at the lesser of (i) the price agreed between the shareholder and the
buyer (or the amount of debt in the case of a pledge) or (ii) the “fair market value” of the shares
(defined in Article VI of the Bylaws as the average price at which shares have been transferred for
a valuable consideration expressed in money or its equivalent in a bona fide transaction in the
twenty-four full calendar months preceding the effective date of the notice of proposed transfer).
The price asked for a share by a current shareholder may be more or less than such “fair market
value.
NOTE: After the VP of Administration has reviewed your application and certified that it is
complete, it will be considered by the Island Inn Board of Directors. Pursuant to the Island Inn
Bylaws, the Board of Directors will have 90 days to review and decide on the pending application,
once all pertinent information has been received.
5.
Annual Shareholders Meeting. An annual shareholders meeting is held on the second Monday of
January to conduct the business of the Inn and the Company and to elect members of the Board of
Directors.
6.
Voting. According to Article V of the Articles of Incorporation of the Company, each shareholder
has only one (1) vote at any shareholders meeting regardless of the number of shares held, except
in the case of any proposal to: (i) sell all, or substantially all, of the assets of the Company (ii) to
liquidate the Company; (iii) to merge or consolidate with any other corporation; or (iv) to amend
Article V, in any such special case, each shareholder to have one (1) vote per share owned and the
vote of at least two-thirds (2/3) of the issued and outstanding shares shall be required to adopt
any such proposal. Any new shareholder should not expect to have any material effect on the
Company or the control of the Company due to these limited voting rights.
(See Prospective Shareholder Application beginning on next page.)
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Prospective Shareholder Application for the Island Inn
(Part Two)
Personal Information: (Use NA when not applicable):
Full Applicant Name: First:
Middle:
Last:
Home Address: Street & Number:
Apt#:
City:
State/Province:
Postal Code:
Home Phone:
Email:
Married:
Single:
Other
Are you a U.S. citizen? Yes
No
If naturalized, when?
Where?
Country:
What is or was your profession?
Give name of business:
Nature of business:
Business Title:
Business Address:
Full Name of Spouse:
Spouse Email:
Will name of spouse appear on stock certificate?
What is or was your profession?
Give name of business:
Nature of business:
Business Title:
Business Address:
Yes
No
Name of shareholder/s sponsoring/endorsing applicant: NA
Primary Sponsor/Estate:
Others:
What is your relationship to your sponsor/s?
(Estate, Mother, father, brother, sister, cousin, etc)
Long-term Commitment to the Inn
Other than inheritance, are there other reasons why you wish to become an Island Inn shareholder?
Do you have business or organizational skills that might benefit the Inn?
Are any of your children or grandchildren likely to be interested in becoming successor shareholder/s-Legacies:
Yes
No If yes, please identify:
If no, why not:
Are you an Island Inn Legacy (child, grandchild or relative of a shareholder)? Yes
If yes, name of family member who is or was a shareholder:
No
Please check any current or past Island Inn Board of Directors with whom you have met and are
acquainted.
Current and Past Board of Directors:
Burke Wood
Bill Fuqua
Pat Yankus
Sam Bailey
Jim Kuder
Evan Stouten
Merrell Rushworth
Mead Treadwell
Richard Johnson
Other Former Board
Joe Orndorff
Dick Notebaert
Tom Blanton
Sherie Brezina
Members:
Betsy Jollay
Ralph Scott
Nan Leeming
Al Paladino
Rachel Brady
Robin Krivanek
Frank Wilk
Ken Metz
Other Shareholder Acquaintances: List the names of any other shareholders and non-shareholders that
you have met while a guest of the Inn:
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Certification:
I have read, understood and signed the Shareholder Representation Agreement, Part 3,
Exhibit A.
I have read and understood the terms and conditions of share-ownership and believe the
above personal information and statements of long-term commitment to the Inn to be
correct and that these statements fairly represent my true intentions.
__________________________________
Applicant’s Name (printed or typed)
Date of Application: __________________
Signature of Applicant
Signature of Joint Applicant (if any)
Address
Address
City, State, and Zip Code
City, State, and Zip Code
NOTE TO PRIMARY SPONSOR:
Please carefully review the entire application for completeness and all necessary signatures.
Completed forms should be sent to:
Vice President of Administration and Finance,
The Island Inn Company
P.O. Box 659
Sanibel Island, Florida 33957
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EXHIBIT A
ISLAND INN COMPANY PROSPECTIVE
SHAREHOLDER REPRESENTATION AGREEMENT
(PART 3)
Board of Directors
Island Inn Company
3111 West Gulf Drive
P.O. Box 659
Sanibel, FL 33957
Dear Sir/Madam:
The undersigned, intending to be legally bound, hereby irrevocably submits the
undersigned’s Island Inn Company Prospective Shareholder Application (the “Application”),
and acknowledges, warrants and represents to the Island Inn Company, a Minnesota
corporation (the “Company”) as follows:
1. If, as and when I become a shareholder of the Company, I understand that I will
become subject for all purposes to the terms and conditions of the Company’s Articles of
Incorporation and Bylaws, as amended (collectively the “Governance Documents”).
I
acknowledge that prior to purchasing a share in the Company, I have the opportunity to
examine and obtain professional advice regarding the Company, an investment in the
Company and the Governance Documents, and that I will either do so, or determine not to do
so in my sole discretions.
2. I acknowledge and agree that the Company reserves the right, in its sole
discretion, to accept or reject my Application or its approval or denial thereof.
3. I understand and acknowledge that no person has been authorized to give any
information or to make any representations which are not set forth in the Application and
that I have received no oral representations, warranties or information regarding the
Company, or a prospective purchase of stock in the Company, from the Company, or its
officers or directors or their respective agents or affiliates, which were inconsistent with
those contained in the Application.
4. I have obtained and will obtain, to the extent I deem necessary, my own personal
professional advice with respect to (i) the risks inherent in a purchase of stock in the
Company; (ii) the suitability of any purchase in light of my financial condition; and (iii) legal,
tax and accounting matters.
5. I acknowledge that I, either alone or with the assistance of my purchaser
representatives with whom I have consulted, if any, have sufficient knowledge, skill and
experience in financial and business matters to be capable of evaluating the risks and merits
of my prospective purchase of stock in the Company and to make an informed decision about
whether to purchase stock in the Company.
6. I RECOGNIZE (I) THAT A PURCHASE OF STOCK IN THE COMPANY INVOLVES A HIGH
DEGREE OF RISK WHICH MAY RESULT IN THE LOSS OF THE TOTAL AMOUNT OF MY PURCHASE
PRICE; (II) THAT TRANSFERABILITY AND SALE OF STOCK IN THE COMPANY IS RESTRICTED IN
MANY WAYS; (III) THAT THE COMPANY MAKES NO REPRESENTATIONS WHATSOEVER
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CONCERNING THE PRESENT OR PROSPECTIVE VALUE OF THE STOCK; AND (IV) THAT, IN THE
EVENT OF DISPOSITION OF THE STOCK, I COULD SUSTAIN A TOTAL LOSS OF THE AMOUNT PAID
FOR THE STOCK.
7. I intend to acquire and hold any stock in the Company for my own account as
principal, and not with a view to, or for resale in connection with, the distribution thereof
within the meaning of the Securities Act of 1933, as amended (the “Act”), and not directly or
indirectly on behalf of, or as nominee for, any other person or entity.
8. I have adequate means of providing for my current needs and possible personal
contingencies, have no need for liquidity with respect to any stock in the Company, have the
financial ability to bear the substantial economic risk for an indefinite period of time and can
afford a total loss of the amount paid for any stock in the Company.
9. I acknowledge that no stock of the Company has been registered (i) under the Act;
or (ii) under the Minnesota Securities Act; or (iii) under the securities laws of any other states
in which any stock of the Company may be offered or sold by an existing shareholder of the
Company.
10. I further acknowledge that any stock I may hereafter own in the Company may not
be sold, transferred or otherwise disposed of except in accordance with applicable state and
Federal securities laws and the Governance Documents. As a result thereof, I may be
required to hold any stock in the Company for an indefinite period of time.
11. I acknowledge and understand that the Company will rely on my representations
contained herein for the purpose of determining whether or not I qualify as an Accredited
Investor. By checking and initialing one or more of the lettered subparagraphs below, I, for
the purpose of inducing the Company to approve my Application, hereby represent that the
statement or statements initialed below are true and correct. NOTE: This is NOT a means
test.
A.
I certify that I had an individual income in excess of $200,000 in each of the
two most recent years or joint income with my spouse in excess of $300,000 in
each of those years and reasonably expect to reach the same income level in
the current year.
B.
I certify that as of the date of this document, I (either individually or jointly
with my spouse) have a net worth in excess of $1,000,000 (for purposes hereof
“net worth” excludes the value of the investor’s primary residence).
C.
I certify that I am not an accredited investor because none of the foregoing
statements (A) and/or (B) are true with respect to the undersigned.
(Applicants may claim non-accredited status without prejudice to their
application.)
12.
The provisions of this document shall be binding upon and shall inure to the
benefit of the undersigned and to the successors and assigns of the Company and to the
personal representatives, heirs, guardians, executors administrators, legal representatives
and successors of the undersigned. If the undersigned is more than one person, the
obligations of the undersigned shall be joint and several and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made by and be
binding upon each such person and his or her personal representative, heirs, guardians,
executors, administrators, legal representatives and successors.
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13.
I represent and warrant to the Company that (i) the information contained
herein is complete and accurate as of the date set forth at the end hereof and may be relied
upon by the Company and (ii) I will notify the Company immediately of any material change in
any of such information occurring prior to the Company’s approval of my application and/or
my purchase of any share of stock in the Company.
14.
This document shall be governed by and construed in accordance with the laws
of the State of Minnesota.
15.
I agree that my Application, and this document, together with the Governance
Documents, constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof; and no provisions hereof shall be waived, modified,
discharged or terminated except by an instrument in writing signed by the party against
whom any waiver, modification, discharge or termination is sought.
IN WITNESS WHEREOF, I have executed this Shareholder Representation Agreement on
the ______ day of __________________, _________.
Applicant’s Name Printed or Typed
Name of Joint Applicant Printed or Typed
(if any)
Signature of Applicant
Signature of Joint Applicant (if any)
Address
Address
City, State and ZIP Code
City, State and ZIP Code
Social Security Number
Social Security Number
TYPE OF OWNERSHIP
Please check appropriate box
Joint Tenants with Rights of Survivorship
Ownership by a single individual
Each Joint Tenant with Rights of Survivorship must sign the Application and this Exhibit A.
Accepted on behalf of the Company:
By:
Its:
Updated April 26, 2013
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