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Employee Shareholder Agreement for Singapore

Employee Shareholder Agreement Template for Singapore

A legally binding agreement governed by Singapore law that establishes the terms and conditions under which an employee becomes a shareholder in their employing company. The document outlines share acquisition, ownership rights, transfer restrictions, and the relationship between employment status and shareholding. It complies with Singapore's Companies Act, Securities and Futures Act, and Employment Act, incorporating necessary protections for both the company and employee-shareholder.

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Employee Shareholder Agreement

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What is a Employee Shareholder Agreement?

The Employee Shareholder Agreement is a crucial document for Singapore companies implementing employee ownership schemes. It's commonly used when companies want to incentivize key employees through equity participation, align employee interests with company growth, or establish succession planning. The agreement details share allocation, voting rights, dividend entitlements, and critically, what happens to shares upon employment termination. Under Singapore law, this document must comply with various regulatory requirements, including the Companies Act and Securities and Futures Act.

What sections should be included in a Employee Shareholder Agreement?

1. Parties: Identifies the company, employee-shareholder and other relevant parties

2. Background: Sets out the context and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement

4. Share Subscription/Purchase: Details of shares being issued/transferred to employee

5. Payment Terms: Terms for payment of shares if applicable

6. Shareholder Rights: Voting rights, dividend rights and other shareholder privileges

7. Transfer Restrictions: Limitations on transfer of shares

8. Employment Relationship: Link between employment and shareholding status

9. Confidentiality: Obligations regarding company confidential information

10. Termination: Consequences of employment termination on shareholding

What sections are optional to include in a Employee Shareholder Agreement?

1. Tag-Along Rights: Right to join in sale of shares by majority shareholders

2. Drag-Along Rights: Majority shareholders' right to force minority to join in sale

3. Share Vesting Schedule: Timeline for share rights to vest

4. Non-Compete Provisions: Restrictions on competitive activities

What schedules should be included in a Employee Shareholder Agreement?

1. Share Certificate: Copy of share certificate or details of shares

2. Shareholders' Agreement: Reference to or extract of relevant shareholders' agreement provisions

3. Company Constitution: Relevant extracts from company constitution

4. Vesting Schedule: Detailed timeline of share vesting if applicable

5. Share Valuation Method: Agreed method for valuing shares on transfer or exit

Authors

Alex Denne

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

Jurisdiction

Singapore

Document Type

Employment Contract

Cost

Free to use
Relevant legal definitions








































Clauses




































Industries

Companies Act (Cap. 50): Primary legislation governing corporate matters including share issuance and transfer provisions, shareholder rights and obligations, corporate governance requirements, and share capital structure regulations

Securities and Futures Act (Cap. 289): Regulates securities matters including offering requirements, disclosure obligations, and investor protection provisions for share-related transactions

Employment Act (Cap. 91): Core employment legislation covering employment relationship regulations, employee rights and protections, and employment terms and conditions

Income Tax Act (Cap. 134): Tax legislation relevant for share ownership including employee share scheme taxation, capital gains considerations, and general tax implications

Competition Act (Cap. 50B): Legislation governing competition law including restrictions on anti-competitive arrangements and merger control provisions

Personal Data Protection Act 2012: Data protection legislation covering handling of employee personal data, consent requirements, and data protection obligations

SGX Listing Rules: Regulatory rules applicable to listed companies on the Singapore Exchange, governing corporate behavior and shareholder matters

MAS Guidelines on Corporate Governance: Regulatory guidelines from the Monetary Authority of Singapore providing standards for corporate governance practices

Code of Corporate Governance: Best practice recommendations for corporate governance principles and guidelines in Singapore

Employment Equity Guidelines: Guidelines ensuring fair employment practices and equal opportunity in the workplace

Stock Option Rules: Specific regulations governing the implementation and administration of employee stock option plans and share schemes

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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