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Restricted Stock Agreement Template for Singapore

A Restricted Stock Agreement under Singapore law is a legal document that governs the issuance of company shares to employees or other stakeholders, subject to certain restrictions and vesting conditions. The agreement complies with Singapore's Companies Act and Securities and Futures Act, outlining the terms of share ownership, vesting schedule, transfer restrictions, and circumstances under which the shares might be forfeited. It serves as a key instrument for employee retention and alignment of interests with the company's long-term success.

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What is a Restricted Stock Agreement?

The Restricted Stock Agreement is commonly used in Singapore by companies seeking to attract and retain key talent by offering equity ownership with specific conditions. This document is essential when implementing employee share schemes, particularly for startups, growing companies, and established corporations. The agreement must comply with Singapore's regulatory framework, including the Companies Act and Securities and Futures Act, while addressing tax implications under local law. It typically includes detailed provisions on vesting schedules, transfer restrictions, voting rights, and treatment of shares upon various termination scenarios.

What sections should be included in a Restricted Stock Agreement?

1. Parties: Identification of the company issuing restricted stock and the recipient/grantee

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement including 'Restricted Stock', 'Vesting Period', 'Fair Market Value'

4. Grant of Restricted Stock: Details of shares granted, including number, class, and nominal value

5. Vesting Provisions: Vesting schedule, conditions, and requirements

6. Transfer Restrictions: Limitations on transfer during restriction period

7. Termination Provisions: Consequences of employment termination on restricted stock

8. Governing Law: Specification of Singapore law as governing law

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

1. Tax Provisions: Optional section detailing tax implications and responsibilities when specific tax elections or obligations need to be addressed

2. Change of Control: Optional section covering impact of company ownership changes, typically used for listed companies

3. Shareholder Rights: Optional section specifying voting and dividend rights during restriction period when different from standard shareholder rights

4. Drag-Along Rights: Optional section detailing obligation to sell shares alongside majority shareholders, typically used in private companies or startups

What schedules should be included in a Restricted Stock Agreement?

1. Vesting Schedule: Detailed timeline and conditions for vesting

2. Share Certificate: Form of share certificate with restrictive legends

3. Section 83(b) Election Form: Tax election form if applicable to jurisdiction

4. Shareholders' Agreement: Reference to or extract of relevant provisions from shareholders' agreement

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

Singapore

Publisher

Genie AI

Document Type

Stock Agreement

Cost

Free to use

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