Restricted Stock Purchase Agreement Template for Australia

A Restricted Stock Purchase Agreement is a legal document used in Australia that governs the sale of company shares subject to certain restrictions and vesting conditions. The agreement complies with Australian corporate law, particularly the Corporations Act 2001 (Cth) and relevant tax legislation. It details the terms of share acquisition, including purchase price, vesting schedule, transfer restrictions, and company rights of first refusal. The document also addresses tax implications under Australian law, especially concerning employee share schemes, and includes necessary provisions for compliance with ASIC regulations and relevant state securities laws.

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What is a Restricted Stock Purchase Agreement?

The Restricted Stock Purchase Agreement is a crucial document used in Australian corporate environments when companies wish to issue shares while maintaining certain controls over their ownership and transfer. This agreement is commonly utilized in employee share schemes, executive compensation packages, or early-stage investment scenarios. It ensures compliance with Australian corporate law, securities regulations, and tax requirements while protecting both the issuing company's and shareholders' interests. The document typically includes detailed provisions about share acquisition, vesting schedules, transfer restrictions, and rights of first refusal, all tailored to meet Australian legal requirements. It's particularly relevant for startups, growing companies, and established corporations looking to align stakeholder interests through equity participation while maintaining control over share ownership and transfer.

What sections should be included in a Restricted Stock Purchase Agreement?

1. Parties: Identifies the company issuing the restricted stock and the purchaser

2. Background: Sets out the context of the agreement and the company's share scheme

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles

4. Purchase and Sale of Shares: Details the number of shares, purchase price, and payment terms

5. Restrictions on Transfer: Specifies the transfer restrictions and holding period requirements

6. Vesting Schedule: Outlines the vesting timeline and conditions for the restricted stock

7. Company's Right of First Refusal: Details the company's rights to repurchase shares before they can be sold to third parties

8. Representations and Warranties: Contains statements of fact and assurances from both parties

9. Tax Matters: Addresses tax implications and responsibilities

10. Termination: Specifies circumstances and consequences of termination

11. Confidentiality: Establishes confidentiality obligations regarding company information

12. General Provisions: Contains standard boilerplate clauses including governing law, notices, and amendments

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

1. Tag-Along Rights: Include when minority shareholders need protection to join in sales by majority shareholders

2. Drag-Along Rights: Include when majority shareholders need the right to force minority shareholders to join in a sale

3. Employee Obligations: Include when the purchaser is an employee and additional employment-related conditions apply

4. Shareholders Agreement Compliance: Include when the company has an existing shareholders agreement that affects the restricted stock

5. Share Buy-Back Provisions: Include when specific circumstances trigger mandatory share buy-backs

6. Bad Leaver Provisions: Include when different consequences apply for termination under various circumstances

7. Foreign Investment Provisions: Include when the purchaser is a foreign investor subject to FIRB requirements

What schedules should be included in a Restricted Stock Purchase Agreement?

1. Share Certificate: Copy of the share certificate with restriction notations

2. Vesting Schedule Details: Detailed breakdown of vesting dates and conditions

3. Subscription Form: Form for executing the share purchase

4. Board Resolution: Copy of board resolution approving the share issuance

5. Tax Election Forms: Required tax forms for employee share scheme participation

6. Deed of Adherence: If required to adhere to existing shareholders agreement

7. Share Valuation Report: Independent valuation of shares if required

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

Australia

Publisher

Genie AI

Document Type

Stock Agreement

Sector

Cost

Free to use

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