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Restricted Stock Award Agreement

Restricted Stock Award Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Restricted Stock Award Agreement

"I need a Restricted Stock Award Agreement for our incoming Chief Technology Officer in Saudi Arabia, who will receive 50,000 shares vesting over 4 years starting March 1, 2025, with accelerated vesting provisions in case of a company sale."

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Document background
The Restricted Stock Award Agreement is a critical document used when companies in Saudi Arabia wish to grant shares to their employees as part of their compensation or retention strategy. This agreement is particularly important in the context of Saudi Arabia's Vision 2030, which encourages private sector growth and employee participation in company ownership. The document must comply with the Kingdom's Companies Law, Capital Market Authority regulations, and Labor Law requirements. It typically includes detailed provisions about the number of shares granted, vesting conditions, transfer restrictions, and rights attached to the shares. The agreement is commonly used by both listed companies and companies planning an IPO, serving as a key instrument for aligning employee and shareholder interests while ensuring compliance with local regulatory requirements.
Suggested Sections

1. Parties: Identification of the Company and the Award Recipient, including their full legal names and addresses

2. Background: Context of the agreement, reference to the equity plan under which the award is granted, and board/committee approvals

3. Definitions: Key terms used throughout the agreement, including 'Restricted Stock', 'Vesting Date', 'Cause', etc.

4. Grant of Restricted Stock: Details of the stock award, including number of shares, grant date, and nominal value

5. Vesting Schedule: Specific timeline and conditions for the vesting of shares

6. Transfer Restrictions: Limitations on sale, transfer, or encumbrance of unvested shares

7. Shareholder Rights: Rights attached to the shares including voting and dividend rights

8. Termination of Employment: Treatment of restricted stock upon various types of employment termination

9. Compliance with Laws: Adherence to Saudi Arabian laws, including CMA regulations and labor laws

10. Tax Obligations: Responsibilities for Zakat/tax payments and withholding requirements

11. Administration: Role and authority of the board/committee in administering the award

12. Governing Law and Jurisdiction: Application of Saudi Arabian law and jurisdiction for disputes

13. Notices: Process for formal communications between parties

14. General Provisions: Standard clauses including amendments, severability, and entire agreement

Optional Sections

1. Foreign Ownership Provisions: Additional terms for non-Saudi recipients, including compliance with foreign ownership restrictions

2. Electronic Delivery: Consent to receive documents and notifications electronically

3. Data Privacy: Consent for collection and processing of personal data

4. Clawback Provisions: Terms for recouping shares in case of financial restatement or misconduct

5. Currency Conversion: Provisions for converting values between SAR and other currencies

6. Non-Competition and Confidentiality: Additional restrictive covenants tied to the award

7. Retirement Provisions: Special terms for treatment of awards upon retirement

8. Change in Control: Impact of corporate transactions on vesting and restrictions

Suggested Schedules

1. Schedule 1 - Award Details: Specific details of the grant including number of shares, grant date, and vesting dates

2. Schedule 2 - Equity Plan Terms: Summary of relevant terms from the underlying equity plan

3. Schedule 3 - Acceptance Form: Form for formal acceptance of the award and its terms

4. Schedule 4 - Tax Summary: Overview of tax implications in Saudi Arabia

5. Appendix A - Vesting Schedule: Detailed breakdown of vesting dates and conditions

6. Appendix B - Regulatory Disclosures: Required disclosures under Saudi Arabian law and CMA regulations

7. Appendix C - Share Legends: Required legends and notifications to be placed on share certificates

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Clauses
Grant of Award
Vesting Conditions
Transfer Restrictions
Voting Rights
Dividend Rights
Regulatory Compliance
Tax Obligations
Employment Conditions
Termination Provisions
Confidentiality
Data Protection
Non-Competition
Non-Solicitation
Share Certificates
Amendment
Assignment
Notices
Governing Law
Dispute Resolution
Severability
Entire Agreement
Force Majeure
Shareholder Rights
Corporate Actions
Change in Control
Clawback
Electronic Communications
Currency Provisions
Representations and Warranties
Compliance with Plan
Administration
Withholding Rights
Foreign Exchange Control
Market Abuse Prevention
Share Ownership Limits
Registration Rights
Power of Attorney
Acknowledgments
Interpretation
Waiver
Relevant Industries

Financial Services

Technology

Healthcare

Manufacturing

Telecommunications

Real Estate

Professional Services

Energy

Consumer Goods

Industrial

Mining

Petrochemicals

Retail

Transportation

Construction

Relevant Teams

Legal

Human Resources

Finance

Executive Leadership

Corporate Governance

Compensation & Benefits

Share Registry

Company Secretariat

Compliance

Risk Management

Internal Audit

Corporate Communications

Investor Relations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

Executive Director

Senior Vice President

Vice President

Department Head

Senior Manager

Manager

Key Technical Specialist

Senior Engineer

Research Director

Sales Director

Regional Manager

General Counsel

Human Resources Director

Division Head

Project Manager

Principal Scientist

Senior Analyst

Industries
Companies Law (2015): Royal Decree No. M/3: Governs corporate entities in Saudi Arabia, including regulations on share issuance, transfer restrictions, and shareholder rights
Capital Market Law: Royal Decree No. M/30: Regulates securities activities, including the issuance and trading of shares, disclosure requirements, and market manipulation prevention
Saudi Labor Law: Royal Decree No. M/51: Governs employment relationships and compensation, including regulations on employee benefits and stock-based compensation
Capital Market Authority (CMA) Regulations: Rules and regulations governing listed companies, including requirements for share-based compensation plans and disclosure obligations
Income Tax Law: Royal Decree No. M/1: Covers taxation of share-based compensation and capital gains for both Saudi and non-Saudi employees
Foreign Investment Law: Royal Decree No. M/1: Regulates foreign ownership of shares in Saudi companies, including restrictions and requirements
Corporate Governance Regulations: CMA Board Resolution No. 8-16-2017: Provides guidelines for transparency, disclosure, and fair treatment of shareholders
Anti-Money Laundering Law: Royal Decree No. M/20: Ensures compliance with AML requirements in share transfers and ownership documentation
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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