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Share Retention Agreement

Share Retention Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Share Retention Agreement

"I need a Share Retention Agreement under Saudi law for our upcoming IPO in March 2025, where five founding shareholders will be restricted from selling their shares (total 60% ownership) for 24 months post-listing, with exceptions for transfers to immediate family members."

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Document background
Share Retention Agreements are crucial instruments in Saudi Arabian corporate practice, used to maintain stability in company ownership and protect stakeholder interests. These agreements are particularly relevant during initial public offerings, corporate restructurings, or when implementing succession planning in family businesses. The document must comply with Saudi Companies Law, Capital Market Authority regulations, and Sharia principles. A Share Retention Agreement typically specifies the lock-up period, details permitted and restricted transfers, and outlines enforcement mechanisms. It's commonly used in scenarios such as post-IPO lock-ups, joint venture arrangements, or when maintaining specific ownership structures is critical for business operations or regulatory compliance. The agreement's terms must be carefully crafted to balance shareholder rights with company interests while ensuring enforceability under Saudi Arabian law.
Suggested Sections

1. Parties: Identification of the shareholders subject to retention obligations and the company

2. Background: Context of the agreement, including company details and reason for share retention

3. Definitions and Interpretation: Key terms used in the agreement, including 'Retention Period', 'Restricted Shares', etc.

4. Retention Obligation: Core obligations regarding share retention, including duration and scope

5. Transfer Restrictions: Specific restrictions on transfer, pledge, or encumbrance of shares

6. Permitted Transfers: Circumstances under which transfers may be permitted (e.g., to family members or affiliated entities)

7. Consequences of Breach: Remedies and consequences for violating retention obligations

8. Representations and Warranties: Standard representations regarding share ownership and authority to enter agreement

9. Notices: Process for formal communications between parties

10. Governing Law and Jurisdiction: Specification of Saudi law governance and dispute resolution mechanism

11. Term and Termination: Duration of the agreement and circumstances for early termination

Optional Sections

1. Tag-Along Rights: Include when certain shareholders should have the right to join in any permitted sale

2. Drag-Along Rights: Include when majority shareholders should have the right to force minorities to join in a sale

3. Voting Rights During Retention: Include when specific voting arrangements need to be addressed during the retention period

4. Share Certificates: Include when physical share certificates need specific handling or notation

5. CMA Compliance: Include for listed companies to address specific Capital Market Authority requirements

6. Emergency Transfer Provisions: Include when parties want to allow transfers in specific emergency situations

7. Tax Provisions: Include when specific tax implications need to be addressed

8. Shareholder Death Provisions: Include when specific arrangements are needed for transfer upon death of a shareholder

Suggested Schedules

1. Schedule 1 - Share Details: Details of shares subject to retention, including share numbers, classes, and percentage of ownership

2. Schedule 2 - Shareholder Information: Detailed information about each shareholder including ID/registration numbers and contact details

3. Schedule 3 - Form of Deed of Adherence: Template for new parties to join the agreement in case of permitted transfers

4. Schedule 4 - Competitors List: If relevant, list of competitors to whom transfers are specifically prohibited

5. Appendix A - Share Certificates: Copies of relevant share certificates

6. Appendix B - Corporate Approvals: Copies of board/shareholder resolutions approving the agreement

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

alex.den.21@genieai.co
Relevant legal definitions







































Clauses






























Relevant Industries

Financial Services

Technology and Startups

Family Businesses

Real Estate

Manufacturing

Healthcare

Professional Services

Retail and Consumer

Energy and Resources

Islamic Banking and Finance

Telecommunications

Construction and Infrastructure

Relevant Teams

Legal

Corporate Secretariat

Compliance

Corporate Finance

Investor Relations

Risk Management

Corporate Governance

Board Secretariat

Executive Management

Shareholder Services

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Secretary

Compliance Officer

Investment Director

Shareholder Relations Manager

Board Member

Corporate Governance Officer

Risk Manager

Managing Partner

General Counsel

Investment Manager

Corporate Finance Director

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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