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Restricted Stock Unit Award Agreement Template for Germany

This document is a legally binding agreement governed by German law that establishes the terms and conditions under which a company grants Restricted Stock Units (RSUs) to an employee. It outlines the vesting schedule, settlement terms, tax implications, and compliance requirements in accordance with German corporate, securities, and employment laws. The agreement includes specific provisions for data protection under GDPR, German tax withholding obligations, and local regulatory requirements, while ensuring alignment with German employment law principles and corporate governance standards.

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What is a Restricted Stock Unit Award Agreement?

The Restricted Stock Unit Award Agreement is used when a company wishes to grant equity-based compensation to employees in Germany as part of their total compensation package. This document is essential for companies offering RSUs to German employees, as it must comply with specific German legal requirements including corporate law (Aktiengesetz), securities regulations, employment law, and data protection requirements under GDPR. The agreement outlines the grant details, vesting conditions, settlement procedures, and tax implications while ensuring compliance with German regulatory framework. It serves as the primary legal document governing the RSU relationship between the company and the employee, typically issued in conjunction with a broader equity incentive plan.

What sections should be included in a Restricted Stock Unit Award Agreement?

1. Parties: Identification of the granting company and the RSU recipient (employee)

2. Background: Context of the RSU grant and reference to the equity plan under which RSUs are granted

3. Definitions: Key terms used throughout the agreement including 'RSUs', 'Vesting Date', 'Share', etc.

4. Grant of RSUs: Details of the RSU award including number of units and grant date

5. Vesting Schedule: Timing and conditions for RSU vesting

6. Settlement of RSUs: Process and timing for converting vested RSUs into shares or cash

7. Tax Obligations: Tax withholding requirements and responsibilities under German tax law

8. Employment Relationship: Clarification that the RSU grant does not affect employment terms

9. Data Protection: GDPR-compliant provisions for processing personal data

10. Compliance with Laws: Participant's obligation to comply with applicable securities and other laws

11. Governing Law and Jurisdiction: Application of German law and competent courts

What sections are optional to include in a Restricted Stock Unit Award Agreement?

1. Malus and Clawback: Provisions for recouping RSUs in case of misconduct or financial restatement

2. Foreign Exchange Provisions: Required for international participants or cross-border transfers

3. Change of Control: Treatment of RSUs in case of corporate transaction or merger

4. Non-Competition and Non-Solicitation: Restrictive covenants (if permissible under local law)

5. Works Council Approval: Reference to works council approval if required

6. Special Retirement Provisions: Treatment of RSUs upon retirement

7. Disability and Death: Treatment of RSUs upon disability or death

What schedules should be included in a Restricted Stock Unit Award Agreement?

1. Schedule 1: Vesting Schedule: Detailed breakdown of vesting dates and conditions

2. Schedule 2: Tax Summary: Overview of applicable German tax treatment

3. Schedule 3: Data Processing Notice: Detailed GDPR-compliant data protection information

4. Appendix A: Copy of Plan: Copy or summary of the equity plan under which RSUs are granted

5. Appendix B: Consent Forms: Required acknowledgments and consents from participant

6. Appendix C: Country-Specific Terms: Additional terms specific to German grants

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

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Equity Agreement

Cost

Free to use

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