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Restricted Stock Agreement for Nigeria

Restricted Stock Agreement Template for Nigeria

A Nigerian-law governed Restricted Stock Agreement is a legal document that formalizes the issuance of company shares to recipients (typically employees or consultants) subject to certain vesting conditions and transfer restrictions. The agreement complies with the Companies and Allied Matters Act (CAMA) 2020 and Nigerian securities regulations, detailing the terms of the stock grant, vesting schedule, shareholder rights, and transfer limitations. It includes specific provisions for tax implications under Nigerian law and typically requires approval from relevant regulatory bodies, including the Corporate Affairs Commission where applicable.

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What is a Restricted Stock Agreement?

The Restricted Stock Agreement serves as a crucial document in Nigerian corporate practice for companies looking to attract, retain, and incentivize key personnel through equity compensation. This agreement is commonly used by both established companies and startups operating under Nigerian law, particularly when implementing employee stock ownership plans or equity incentive schemes. The document must comply with the Companies and Allied Matters Act (CAMA) 2020, Nigerian Investment and Securities Act, and relevant tax regulations. It typically includes detailed provisions on share grants, vesting schedules, transfer restrictions, and shareholder rights, while accounting for local corporate governance requirements and securities regulations. The agreement is particularly relevant in cases of employee compensation packages, consultant arrangements, or as part of broader corporate restructuring initiatives.

What sections should be included in a Restricted Stock Agreement?

1. Parties: Identifies the company issuing the restricted stock and the recipient

2. Background: Explains the context of the restricted stock grant and references any relevant equity plans or board approvals

3. Definitions: Defines key terms used throughout the agreement

4. Grant of Restricted Stock: Details the number of shares granted and their par value

5. Purchase Price and Payment: Specifies any purchase price for the shares and payment terms

6. Vesting Requirements: Outlines the vesting schedule and conditions for the restricted stock

7. Transfer Restrictions: Details restrictions on transferring the shares during the vesting period

8. Shareholders' Rights: Specifies voting rights, dividend rights, and other shareholder privileges during the restricted period

9. Company's Right of Repurchase: Details the company's rights to repurchase unvested shares

10. Tax Matters: Addresses tax implications and responsibilities

11. Compliance with Laws: Ensures compliance with Nigerian securities laws and regulations

12. Notices: Specifies how formal communications between parties should be made

13. General Provisions: Contains standard boilerplate provisions including governing law, amendments, and entire agreement

What sections are optional to include in a Restricted Stock Agreement?

1. Employment Relationship: Required when the recipient is an employee, defining the relationship between employment and the restricted stock

2. Change in Control Provisions: Optional acceleration or special provisions in case of company sale or merger

3. International Provisions: Required for non-Nigerian recipients, addressing foreign exchange and cross-border considerations

4. Death and Disability: Optional provisions for handling restricted stock in case of death or disability

5. Lock-up Agreement: Required if company anticipates public offering, restricting sale during IPO period

6. Spousal Consent: Required in cases where recipient is married, particularly relevant under Nigerian law

7. Corporate Governance Rights: Optional provisions granting specific corporate governance rights to significant stockholders

What schedules should be included in a Restricted Stock Agreement?

1. Schedule A - Share Details: Details of the restricted shares including class, number, and par value

2. Schedule B - Vesting Schedule: Detailed timetable of vesting dates and conditions

3. Schedule C - Share Transfer Form: Standard form for transferring shares when permitted

4. Schedule D - Section 83(b) Election Form: Tax election form if applicable under local tax regulations

5. Appendix 1 - Board Resolution: Copy of board resolution approving the restricted stock grant

6. Appendix 2 - Shareholder Approval: If required, copy of shareholder approval for the grant

7. Appendix 3 - Securities Compliance: Documentation of compliance with Nigerian securities regulations

Authors

Alex Denne

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

Jurisdiction

Nigeria

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions


































Clauses






























Relevant Industries

Technology

Financial Services

Professional Services

Oil and Gas

Telecommunications

Manufacturing

Healthcare

E-commerce

Fintech

Consulting

Start-ups

Private Equity

Relevant Teams

Legal

Human Resources

Finance

Executive Leadership

Corporate Secretariat

Compliance

Compensation and Benefits

Corporate Governance

Administrative

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

Chief Technology Officer

Senior Executive Vice President

Executive Director

Non-Executive Director

Company Secretary

Legal Counsel

HR Director

Compensation Manager

Stock Plan Administrator

Corporate Governance Officer

Compliance Officer

Senior Software Engineer

Department Head

Key Employee

Senior Consultant

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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