Restricted Stock Grant Agreement Template for Saudi Arabia

The Restricted Stock Grant Agreement serves as a fundamental instrument for companies in Saudi Arabia seeking to implement employee equity compensation programs. This document is typically used when a company wishes to grant shares to key employees as part of their compensation package, subject to certain vesting conditions and transfer restrictions. The agreement must comply with Saudi Arabian Companies Law, Capital Market Authority regulations, and Sharia principles, while addressing crucial aspects such as share ownership, vesting schedules, shareholder rights, and tax implications. It is particularly important in the context of employee retention strategies and long-term incentive programs, especially for companies looking to align employee interests with corporate growth objectives while maintaining compliance with local regulatory requirements.

1. Parties: Identification of the Company (Grantor) and the Employee (Grantee)

2. Background: Context of the agreement, reference to any employee incentive plan, and corporate approvals obtained

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

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

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

6. Transfer Restrictions: Limitations on transfer of unvested shares and any lock-up periods

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

8. Tax Obligations: Responsibilities for Zakat/tax payments and withholding obligations

9. Termination of Employment: Impact of various types of employment termination on unvested shares

10. Compliance with Laws: Adherence to Saudi Arabian laws, particularly CMA regulations and Companies Law

11. Confidentiality: Obligations regarding non-disclosure of agreement terms and company information

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

13. Execution: Signature blocks and execution requirements