Restricted Stock Award Agreement Template for England and Wales

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Key Requirements PROMPT example:

Restricted Stock Award Agreement

"I need a Restricted Stock Award Agreement for our UK-based fintech startup to grant 10,000 restricted shares to our new CTO, with quarterly vesting over 4 years starting from March 1, 2025, and including good/bad leaver provisions."

Document background
A Restricted Stock Award Agreement is commonly used by companies in England and Wales as part of their equity compensation strategy to attract, retain, and motivate key employees and service providers. The agreement grants actual shares at the time of award, but these shares are subject to restrictions on transfer and risk of forfeiture until specific vesting conditions are met. This document type must comply with English corporate law requirements, UK tax regulations, and, where applicable, FCA rules. It typically includes detailed provisions on vesting schedules, performance conditions, good/bad leaver provisions, and tax treatment.
Suggested Sections

1. Parties: Identifies the company and the award recipient

2. Background: Context of the award and reference to any equity incentive plan

3. Definitions: Key terms used throughout the agreement

4. Grant of Award: Details of shares awarded and restrictions

5. Vesting Provisions: Vesting schedule and conditions

6. Transfer Restrictions: Limitations on transfer of restricted shares

7. Taxation: Tax treatment and responsibilities

8. Termination Provisions: Impact of employment termination

Optional Sections

1. Malus and Clawback: Recovery provisions for misconduct scenarios - typically used for senior executives or regulated entities

2. Change of Control: Treatment of awards upon company sale/merger - recommended for private companies or those likely to be acquired

3. Relationship with Employment: Impact on employment rights - applicable when recipient is an employee

Suggested Schedules

1. Award Details Schedule: Specific number of shares, dates, and vesting schedule

2. Share Plan Rules: Reference to or extract of relevant plan rules

3. Section 431 Election: Tax election form under Income Tax (Earnings and Pensions) Act

4. Shareholders Agreement Provisions: Key provisions applicable to restricted shareholders

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Clauses
Relevant Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company operations, including share capital provisions, directors' duties, company secretarial requirements, and shareholder rights

Financial Services and Markets Act 2000: Regulates financial services and markets, covering financial promotion rules, securities offering regulations, and regulatory compliance requirements

Employment Rights Act 1996: Core employment legislation affecting employment contracts, rights, and National Insurance contribution considerations for share awards

Income Tax (Earnings and Pensions) Act 2003: Tax legislation governing the treatment of restricted securities, including income tax implications and employee tax obligations

Corporation Tax Act 2009: Corporate tax implications for companies issuing restricted stock awards and related corporation tax relief

UK GDPR and Data Protection Act 2018: Data protection requirements for handling personal information of award recipients and maintaining confidentiality

UK Market Abuse Regulation: Regulations concerning inside information, market manipulation, and disclosure requirements for share-based awards

FCA Listing Rules: Regulatory requirements for listed companies regarding share awards, including disclosure and transparency obligations

UK Corporate Governance Code: Best practice guidelines for corporate governance, including recommendations on executive remuneration and share-based incentives

Trust Law: Legal framework governing trust arrangements if shares are held in trust as part of the restricted stock award scheme

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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