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Stock Escrow Agreement Template for England and Wales

A Stock Escrow Agreement under English and Welsh law is a legally binding document that establishes the terms and conditions for holding shares in escrow by a third-party agent. It outlines the responsibilities of the escrow agent, conditions for release of shares, voting rights, dividend treatments, and termination provisions. The agreement ensures compliance with UK company law, financial services regulations, and corporate governance requirements while providing security and certainty for all parties involved in the share transaction.

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What is a Stock Escrow Agreement?

A Stock Escrow Agreement is commonly used in England and Wales when parties need a secure mechanism for holding shares during a transaction or corporate event. This agreement is particularly relevant in merger and acquisition transactions, employee share schemes, or when shares need to be held pending the fulfillment of certain conditions. The document details the escrow arrangement, including share deposit procedures, release mechanisms, voting rights during the escrow period, and the duties of the escrow agent. It ensures compliance with the Companies Act 2006 and relevant financial services regulations while providing clarity and protection for all parties involved.

What sections should be included in a Stock Escrow Agreement?

1. Parties: Identifies all parties to the agreement including the escrow agent

2. Background: Sets out the context and purpose of the escrow arrangement

3. Definitions: Defines key terms used throughout the agreement

4. Appointment of Escrow Agent: Terms of appointment and scope of escrow agent's duties

5. Deposit of Escrow Shares: Process and requirements for depositing shares into escrow

6. Release Conditions: Conditions that must be met for shares to be released from escrow

7. Escrow Agent's Duties: Detailed obligations and responsibilities of the escrow agent

8. Fees and Expenses: Payment terms for escrow services

9. Termination: Circumstances and process for terminating the agreement

What sections are optional to include in a Stock Escrow Agreement?

1. Voting Rights: Provisions regarding how voting rights attached to the shares will be exercised during the escrow period

2. Dividend Rights: Provisions regarding the treatment of dividends and other distributions during the escrow period

3. Digital Certificate Provisions: Special provisions for handling digital share certificates and electronic transfer mechanisms

What schedules should be included in a Stock Escrow Agreement?

1. Schedule 1 - Share Details: Details of shares being held in escrow including class, number, and nominal value

2. Schedule 2 - Release Mechanics: Detailed procedures for releasing shares from escrow

3. Schedule 3 - Fee Schedule: Detailed breakdown of escrow agent fees and payment terms

4. Appendix A - Form of Release Notice: Template for requesting release of shares from escrow

5. Appendix B - Transfer Forms: Standard forms for transferring shares

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

England and Wales

Publisher

Genie AI

Document Type

Escrow Agreement

Cost

Free to use

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