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Stock Grant Agreement Template for England and Wales

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Key Requirements PROMPT example:

Stock Grant Agreement

"Need a Stock Grant Agreement for our Series B startup to grant 10,000 ordinary shares to our new CTO, with a 4-year vesting schedule starting March 2025 and standard good/bad leaver provisions."

Document background
A Stock Grant Agreement is essential when companies wish to award shares to employees, directors, or other stakeholders as part of compensation or incentivization strategies. This document, governed by English and Welsh law, outlines the complete terms of the share award, including quantity, class of shares, vesting conditions, and associated rights and obligations. It ensures compliance with UK corporate and securities laws while providing clear documentation of the arrangement between the company and share recipient. The agreement is particularly important for protecting both parties' interests and maintaining proper corporate governance.
Suggested Sections

1. Parties: Identifies the company granting shares and the recipient

2. Background: Explains context and purpose of the stock grant

3. Definitions: Defines key terms used throughout the agreement

4. Grant of Shares: Details of shares being granted, including quantity and class

5. Vesting Provisions: Timeline and conditions for share vesting

6. Rights and Restrictions: Share rights and any transfer restrictions

7. Tax Provisions: Tax obligations and responsibilities

8. Termination Provisions: Consequences of employment termination on shares

Optional Sections

1. Clawback Provisions: Company's right to reclaim shares in specific circumstances - used for senior executives or when required by corporate governance

2. Lock-up Period: Restrictions on selling shares for specified period - used for listed companies or pre-IPO grants

3. Good/Bad Leaver Provisions: Different treatment based on circumstances of leaving - used when differentiation between departure circumstances is desired

Suggested Schedules

1. Share Details Schedule: Detailed description of shares including rights and restrictions

2. Vesting Schedule: Detailed timeline of vesting dates and quantities

3. Tax Election Forms: Required tax forms and elections

4. Shareholder Rights Schedule: Full details of rights attached to shares

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




































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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company operations including share capital provisions, directors' duties, share transfer and registration requirements, and disclosure obligations

Financial Services and Markets Act 2000: Regulatory framework covering securities regulations, financial promotion rules, and market abuse provisions

Employment Rights Act 1996: Legislative framework for employment-related aspects of stock grants, including terms and conditions of employment and associated rights and obligations

Income Tax Act 2007 and Finance Acts: Tax legislation covering the tax implications of share awards, Capital Gains Tax considerations, and associated reporting requirements

UK Corporate Governance Code: Guidelines and best practices for share schemes, particularly relevant for listed companies

Market Abuse Regulation (MAR): Regulations governing inside information, dealing restrictions, and disclosure requirements for share-related transactions

Data Protection Act 2018 and UK GDPR: Legislative requirements for handling personal data and privacy notices in relation to stock grant administration

FCA Rules: Regulatory compliance requirements set by the Financial Conduct Authority, particularly relevant for listed companies

PSC Regulations: People with Significant Control regulations governing ownership and control reporting requirements

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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