When it comes to investing in a company, there are a variety of different options available. One option that investors may consider is purchasing restricted stock in a business. Restricted stock refers to shares that are issued to an investor, but with certain limitations and restrictions placed on the shares.

Before purchasing restricted stock, it’s important to understand the terms and conditions laid out in a restricted stock agreement. This document outlines the specifics of the agreement between the investor and the company, including the restrictions placed on the shares and the rights of the investor.

To get a better idea of what a restricted stock agreement may look like, let’s take a look at a sample agreement.

[Company Name]

Restricted Stock Agreement

This Restricted Stock Agreement (the “Agreement”) is made as of [Date] by and between [Company Name], a [State] corporation (the “Company”) and [Investor Name], an individual (the “Investor”).

Recitals

The Investor wishes to purchase restricted shares of common stock of the Company (the “Restricted Stock”), subject to the terms and conditions of this agreement.

The Company desires to issue the Restricted Stock to the Investor.

Agreement

1. Issuance of Restricted Stock

The Company will issue [Number of Shares] shares of Restricted Stock to the Investor in exchange for [Purchase Price] per share.

2. Restrictions

The Restricted Stock will be subject to the following restrictions, which will apply until they are released in accordance with this agreement:

a) The Investor may not sell or transfer the Restricted Stock until the restrictions have been lifted.

b) The Restricted Stock will be forfeited if the Investor leaves the Company before the restrictions have been lifted.

c) The Company may repurchase the Restricted Stock at any time before the restrictions have been lifted.

3. Release of Restrictions

The restrictions on the Restricted Stock will be lifted in accordance with the following schedule:

a) [Date]: [Percentage] of the Restricted Stock will be released.

b) [Date]: [Percentage] of the Restricted Stock will be released.

c) [Date]: [Percentage] of the Restricted Stock will be released.

d) [Date]: All remaining restrictions will be lifted.

4. Termination

This agreement may be terminated by either party at any time before the restrictions on the Restricted Stock have been lifted.

5. Governing Law

This agreement will be governed by and construed in accordance with the laws of the state of [State].

6. Entire Agreement

This agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this agreement.

In summary, a restricted stock agreement lays out the terms and conditions of a purchase of restricted shares in a company. Investors should carefully review any agreement before making a purchase to ensure they understand the restrictions placed on the shares and their rights as an investor.