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Restricted Stock Unit Award Agreement for the United States

Restricted Stock Unit Award Agreement Template for United States

A Restricted Stock Unit Award Agreement is a legal document governed by U.S. federal and state securities laws that outlines the terms and conditions under which a company grants restricted stock units to employees or service providers. The agreement specifies vesting conditions, settlement terms, tax implications, and other crucial aspects of the equity compensation arrangement. It ensures compliance with SEC regulations, Internal Revenue Code requirements, and applicable state laws while protecting both the company's and recipient's interests.

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Restricted Stock Unit Award Agreement

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What is a Restricted Stock Unit Award Agreement?

The Restricted Stock Unit Award Agreement serves as a crucial document in modern equity compensation practices, particularly in the United States. It is used when companies want to provide employees with equity incentives without immediate stock issuance. This agreement outlines the promise to deliver shares at a future date upon meeting specific vesting conditions, typically tied to continued employment or performance metrics. The document must comply with various U.S. regulations, including SEC requirements, tax laws (particularly IRC 409A), and state securities laws. Companies typically implement these agreements as part of their broader equity incentive plans to attract, retain, and motivate key personnel.

What sections should be included in a Restricted Stock Unit Award Agreement?

1. Parties: Identification of the company granting RSUs and the recipient employee/consultant

2. Background: Reference to equity incentive plan and purpose of the award

3. Definitions: Key terms including 'RSUs', 'Vesting Date', 'Service Provider', etc.

4. Grant of RSUs: Number of RSUs granted and basic terms of the grant

5. Vesting Schedule: Detailed vesting conditions and timeline

6. Settlement of RSUs: Process and timing of converting RSUs to shares

7. Tax Obligations: Tax withholding requirements and responsibilities

8. Governing Law: Applicable jurisdiction and choice of law

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

1. Change in Control Provisions: Treatment of RSUs in case of merger/acquisition - recommended for companies anticipating potential M&A activity

2. International Provisions: Country-specific terms for international employees - required when granting RSUs to employees in multiple countries

3. Clawback Provisions: Terms for recovering RSUs in certain circumstances - required for public companies, optional for private

4. Non-Transferability: Restrictions on transfer of RSUs - recommended when additional transfer restrictions are needed beyond standard terms

What schedules should be included in a Restricted Stock Unit Award Agreement?

1. Schedule A - Vesting Schedule: Detailed breakdown of vesting dates and conditions

2. Schedule B - Notice of Exercise Form: Form for recipient to execute when RSUs vest

3. Schedule C - Tax Election Forms: Required tax forms including Section 83(b) election

4. Schedule D - Country-Specific Appendix: Additional terms for specific jurisdictions if applicable

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

United States

Document Type

Stock Agreement

Cost

Free to use
Clauses




























Industries

Securities Act of 1933: Federal law governing primary securities offerings, including Rule 701 which provides exemption for equity compensation in private companies

Securities Exchange Act of 1934: Federal law regulating secondary securities trading and requiring ongoing reporting for public companies offering equity compensation

State Blue Sky Laws: State-specific securities regulations that may affect the issuance of RSUs within particular states

IRC Section 409A: Internal Revenue Code section governing deferred compensation arrangements, including specific requirements for RSU structures

IRC Section 83: Internal Revenue Code section governing property transfers in connection with service performance, affecting RSU taxation

ERISA: Employment Retirement Income Security Act governing employee benefit plans, potentially affecting RSU arrangements

Delaware General Corporation Law: State corporate law framework commonly used for RSU issuance by Delaware corporations

Sarbanes-Oxley Act: Federal law imposing corporate governance and reporting requirements on public companies, affecting RSU disclosure and administration

Dodd-Frank Act: Federal law containing provisions affecting executive compensation and equity awards in public companies

Stock Exchange Rules: NYSE or NASDAQ listing requirements affecting equity compensation plans and disclosure requirements for listed companies

State Employment Laws: State-specific regulations affecting employment-related equity compensation and associated rights

Tax Withholding Requirements: Federal and state regulations governing tax withholding obligations for RSU grants and vesting events

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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