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Stock Grant Agreement Template for India

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Key Requirements PROMPT example:

Stock Grant Agreement

"I need a Stock Grant Agreement for our Series B startup in Bangalore, granting 1000 shares to a senior executive with a 4-year vesting schedule starting March 2025, including standard regulatory compliance for Indian private companies and a 1-year cliff period."

Document background
The Stock Grant Agreement is essential for companies operating in India that wish to offer equity-based compensation to their employees. This document is typically used when a company decides to grant actual shares (as opposed to options or RSUs) to employees as part of their compensation package or performance incentive. The agreement must comply with various Indian regulations, including the Companies Act 2013, SEBI guidelines (for listed companies), and Income Tax Act provisions. It includes critical details such as the number of shares granted, vesting conditions, transfer restrictions, and tax implications. The document becomes particularly important for start-ups, tech companies, and other organizations looking to align employee interests with company growth while navigating the complex regulatory landscape of equity compensation in India.
Suggested Sections

1. Parties: Identification of the Company and the Grantee/Employee receiving the stock grant

2. Background: Context of the agreement, including reference to employment relationship and stock plan approval

3. Definitions: Key terms used throughout the agreement including 'Shares', 'Vesting Date', 'Grant Date', 'Fair Market Value', etc.

4. Grant of Shares: Details of the stock grant including number of shares, class of shares, and grant date

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

6. Rights and Restrictions: Rights attached to shares and any restrictions on transfer or sale

7. Taxation: Tax implications and responsibilities of both parties

8. Regulatory Compliance: Compliance with SEBI regulations, Companies Act, and other applicable laws

9. Termination Provisions: Impact of employment termination on unvested shares

10. Representations and Warranties: Standard declarations by both parties regarding capacity and authority

11. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

Optional Sections

1. Lock-in Period: Additional restrictions on share transfer, used when company policy requires minimum holding period

2. Foreign Exchange Compliance: Required when grantee is non-resident or foreign national

3. Shareholder Agreement Compliance: Required when existing shareholder agreement affects stock grants

4. Clawback Provisions: Optional provisions for recovery of shares in case of misconduct or specific triggers

5. Tag-Along Rights: Required for private companies where minority shareholder protection is needed

6. Electronic Communications: Optional section for companies using electronic systems for grant administration

7. Non-Competition and Confidentiality: Additional protective clauses if not covered in employment agreement

Suggested Schedules

1. Schedule 1 - Share Details: Detailed description of shares including class, rights, and face value

2. Schedule 2 - Vesting Schedule: Detailed breakdown of vesting dates and quantities

3. Schedule 3 - Valuation Certificate: Fair market value certification as required by tax authorities

4. Schedule 4 - Regulatory Approvals: Copies of relevant board and shareholder resolutions

5. Appendix A - Share Plan Terms: Reference to or extract from the company's share plan

6. Appendix B - Taxation Summary: Detailed explanation of tax implications and calculations

7. Appendix C - Consent Forms: Standard forms for regulatory filings and tax declarations

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

Technology

Financial Services

Professional Services

Manufacturing

Pharmaceuticals

E-commerce

Telecommunications

Consulting

Healthcare

Software Development

Biotechnology

Start-ups

Relevant Teams

Legal

Human Resources

Finance

Compliance

Company Secretarial

Tax

Executive Management

Board of Directors

Compensation & Benefits

Stock Administration

Relevant Roles

CEO

CFO

General Counsel

HR Director

Company Secretary

Compensation Manager

Legal Counsel

HR Manager

Stock Plan Administrator

Finance Director

Compliance Officer

Board Director

Senior Executive

Employee Benefits Manager

Tax 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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