Restricted Stock Unit Agreement for Canada

Restricted Stock Unit Agreement Template for Canada

A Canadian Restricted Stock Unit Agreement is a legal document that establishes the terms and conditions under which a company grants restricted stock units to employees, directors, or consultants. The agreement operates within the framework of Canadian securities laws, provincial employment standards, and federal tax regulations. It details the grant amount, vesting schedule, settlement terms, and tax implications while ensuring compliance with relevant Canadian corporate and securities legislation. The document includes specific provisions for Canadian tax treatment and incorporates requirements from provincial securities regulators and privacy laws.

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What is a Restricted Stock Unit Agreement?

This document is used when a Canadian company or a company operating in Canada wishes to grant restricted stock units (RSUs) to its employees, directors, or consultants as part of their compensation package. The Restricted Stock Unit Agreement sets forth the terms under which the participant receives the right to acquire shares or receive cash payments based on the company's stock value at future dates. It is essential for companies offering equity-based compensation in Canada, as it must comply with provincial securities laws, the Income Tax Act, and relevant employment standards. The agreement typically forms part of a broader equity incentive plan and includes specific provisions for Canadian tax treatment, including tax withholding requirements and available elections under Canadian tax law. It's particularly relevant for public companies and private companies planning to go public, helping them attract and retain talent while aligning employee interests with company growth.

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

1. Parties: Identifies the company granting the RSUs and the participant receiving them

2. Background: Explains the context of the agreement, including reference to the equity incentive plan under which RSUs are granted

3. Definitions: Defines key terms used throughout the agreement including 'RSUs', 'Vesting Date', 'Service Provider', etc.

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

5. Vesting Schedule: Specifies when and how RSUs vest, including any performance conditions

6. Settlement of RSUs: Describes how RSUs will be settled (shares, cash, or combination) upon vesting

7. Tax Withholding: Addresses tax obligations and withholding requirements under Canadian law

8. Restrictions on Transfer: Limitations on the participant's ability to transfer or assign RSUs

9. Termination of Service: Treatment of RSUs upon various types of employment termination

10. Compliance with Laws: Ensures compliance with applicable securities laws and regulations

11. Data Privacy: Addresses collection and use of personal information in administering RSUs

12. General Provisions: Standard contractual provisions including notices, amendments, and governing law

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

1. Dividend Equivalents: Include when the company wishes to provide dividend equivalent rights on RSUs

2. Change in Control: Include to address treatment of RSUs in event of corporate transaction

3. Clawback Provisions: Include if company has policy allowing recovery of compensation in certain circumstances

4. Non-Competition and Non-Solicitation: Include if RSUs are tied to post-employment restrictive covenants

5. Foreign Requirements: Include if participant may be subject to laws of multiple jurisdictions

6. Electronic Delivery: Include if documentation will be delivered electronically

7. Performance Conditions: Include if vesting is tied to specific performance metrics

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

1. Schedule A - Notice of Grant: Details specific to individual grant including number of RSUs and vesting dates

2. Schedule B - Vesting Schedule: Detailed breakdown of vesting dates and any applicable conditions

3. Schedule C - Tax Elections: Forms and information regarding available tax elections under Canadian law

4. Appendix A - Data Privacy Notice: Detailed privacy notice compliant with Canadian privacy laws

5. Appendix B - Performance Metrics: If applicable, detailed description of performance vesting conditions

6. Appendix C - Country-Specific Terms: If applicable, additional terms required by Canadian law or other jurisdictions

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

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Stock Agreement

Cost

Free to use
Clauses
Relevant Industries

Technology

Financial Services

Professional Services

Manufacturing

Healthcare

Energy

Mining

Telecommunications

Retail

Consumer Goods

Software

Biotechnology

Real Estate

Transportation

Media and Entertainment

Relevant Teams

Human Resources

Legal

Finance

Executive Leadership

Board of Directors

Compensation

Corporate Governance

Payroll

Tax

Compliance

Employee Benefits

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Technology Officer

Human Resources Director

Compensation Manager

Legal Counsel

Corporate Secretary

Finance Manager

Software Engineer

Product Manager

Sales Director

Senior Executive

Board Member

Department Head

Vice President

Senior Manager

Technical Lead

Research Scientist

Business Development Manager

Industries
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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