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Restricted Stock Award Agreement Template for Canada

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Key Requirements PROMPT example:

Restricted Stock Award Agreement

"I need a Restricted Stock Award Agreement for a private Canadian tech company, granting 10,000 shares to a senior executive with a 4-year vesting schedule and a one-year cliff, including change of control provisions and standard non-compete clauses."

Document background
The Restricted Stock Award Agreement is a crucial document used by Canadian companies to grant shares of company stock to employees as part of their compensation package. This agreement is typically implemented when a company wishes to provide equity-based incentives to attract, retain, and motivate key employees while ensuring their long-term commitment to the company's success. The document must comply with Canadian federal and provincial securities laws, tax regulations, and corporate requirements. It specifies the number of shares granted, vesting schedule, restrictions on transfer, and conditions that must be met before the shares fully vest with the employee. The agreement is particularly important for both private and public companies in Canada, as it helps structure equity compensation while maintaining compliance with regulatory requirements and protecting the company's interests.
Suggested Sections

1. Parties: Identification of the company issuing the restricted stock and the employee receiving the award

2. Background: Context of the agreement, reference to the equity incentive plan, and board approval

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 par value if applicable

5. Vesting Schedule: Specific timeline and conditions for when restrictions on the shares will lapse

6. Restrictions on Transfer: Limitations on selling, transferring, or encumbering the shares before vesting

7. Rights as a Shareholder: Voting rights, dividend rights, and other shareholder privileges during the restriction period

8. Tax Matters: Canadian tax implications, withholding requirements, and tax reporting obligations

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

10. Compliance with Securities Laws: Acknowledgments and agreements regarding securities law compliance

11. General Provisions: Standard contractual terms including notices, amendments, governing law, etc.

Optional Sections

1. Change in Control Provisions: Special vesting provisions in case of merger, acquisition, or other corporate transactions - used for public companies or those contemplating exit events

2. Performance Conditions: Additional vesting conditions tied to company or individual performance metrics - used when award includes performance-based vesting

3. Lock-up Agreement: Additional holding period restrictions after vesting - typically used for public companies or pre-IPO companies

4. Clawback Provisions: Company's right to recoup shares in certain circumstances - used when required by company policy or regulations

5. International Supplement: Additional terms for non-Canadian employees - used when agreement template will cover international participants

6. Electronic Acceptance: Terms for electronic agreement and administration - used when company uses electronic equity management system

Suggested Schedules

1. Schedule A - Notice of Grant: Specific details of individual grant including number of shares, grant date, and vesting schedule

2. Schedule B - Acknowledgment and Statement of Decision: Participant's formal acceptance and investment representations required by securities laws

3. Schedule C - Section 83(b) Election Form: Tax election form for participants who are subject to US taxation

4. Appendix A - Stock Power: Form to transfer shares back to company if vesting conditions not met

5. Appendix B - Spousal Consent: Consent form for participant's spouse if required by provincial family law

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions

































Clauses




























Relevant Industries

Technology

Financial Services

Professional Services

Manufacturing

Healthcare

Energy

Mining

Real Estate

Telecommunications

Retail

Biotechnology

Software

Consulting

Relevant Teams

Human Resources

Legal

Finance

Executive Leadership

Corporate Secretary Office

Compensation and Benefits

Payroll

Tax

Investor Relations

Corporate Development

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

Chief Technology Officer

Vice President

Director

Senior Manager

Software Engineer

Product Manager

Sales Executive

Research Scientist

Department Head

General Counsel

HR Director

Financial Controller

Corporate Secretary

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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