Restricted Stock Purchase Agreement

Startup Law ResourcesVenture Capital, FinancingEmployment Law, Human Resources

This restricted stock purchase note and restricted stock purchase agreement is used to sell restricted stock of company to an individual. The sold stock will come from the company's equity incentive plan.




Pursuant to its [Year of Plan]  Equity Incentive Plan (the “Plan”), [Company Name],  (the “Company”), hereby grants to the Purchaser listed below (“Purchaser”), the right to purchase the number of shares of the Company’s Common Stock set forth below (the “Shares”) at the purchase price set forth below subject to all of the terms and conditions set forth in the Plan and this Restricted Stock Purchase Agreement (the “Agreement”).  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Stock Purchase Agreement.

1.     Notice Of Stock Purchase Right



Date of Grant:

[Grant Date]

Vesting Start Date:

[Vesting Commencement Date]

Purchase Price per Share:

[Purchase Price]

Number of Shares:

[Number of Shares]


1.1.   Vesting Schedule.  The Shares subject to this Agreement shall vest according to the following schedule: Twenty-five percent (25%) of the Shares shall be released from the Company’s Repurchase Option (as defined in the Agreement) on the first anniversary of the Vesting Start Date and 1/48th of the total number of Shares shall be released from the Company’s Repurchase Option thereafter so that 100% of the Shares shall be released from such Repurchase Option on the fourth (4th) anniversary of the Vesting Start Date, subject to Purchaser remaining a Service Provider through each such vesting date.

1.2.   Term/Expiration. This Stock Purchase Right is intended to be exercised by the Purchaser as soon as practicable, and shall cease to be exercisable sixty days after the Date of Grant.

2.     Agreement

2.1.   Sale of Stock.  Subject to the terms and conditions of this Agreement, on the Purchase Date (as defined below) the Company will issue and sell to Purchaser, and Purchaser agrees to purchase from the Company, the number of shares of Common Stock (the “Shares”) set forth in the Notice of Stock Purchase Right at a purchase price set forth in the Notice of Stock Purchase Right.  Notwithstanding anything to the contrary anywhere else in this Stock Purchase Agreement, this purchase is subject to the terms, definitions and provisions of the Plan, which is incorporated herein by reference.

2.2.   Purchase.  The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement by the parties, or on such other date as the Company and Purchaser shall agree (the “Purchase Date”).  On the Purchase Date, the Company will deliver to Purchaser a certificate representing the Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of the purchase price therefor by Purchaser.

2.3.   Repurchase Option

2.3.1. One-hundred percent (100%) of the Shares shall initially be subject to the Company’s Repurchase Option (defined below).

2.3.2. On the date one (1) year from [Insert Date For Vesting Timing To Begin] (the “Vesting Commencement Date”) twenty-five percent (25%) of the Shares subject to the Repurchase Option shall vest and be released from the Repurchase Option.  Thereafter, 1/48th of the Shares shall vest and be released from the Repurchase Option on each monthly anniversary of the Vesting Commencement Date so that One Hundred Percent (100%) of the Shares shall be released from the Repurchase Option on the fourth (4th) anniversary of the Vesting Commencement Date, in any event, subject to the Purchaser’s continued service to the Company through each such date.

2.3.3. In the event of the voluntary or involuntary termination of Purchaser's employment or consulting relationship with the Company or any of its current or future subsidiaries, affiliates, successors or assigns as an officer, director, employee or consultant (“Services”) for any reason (including death or disability), with or without cause,the Company shall, upon the date of such termination (as reasonably fixed by the Board of Directors of the Company), have an irrevocable option to repurchase (the “Repurchase Option”) any or all Shares which have not yet been released from the Repurchase Option (the “Unreleased Shares”), at the original purchase price per Share specified in Section 1 (the “Repurchase Price”).  The Company may exercise its Repurchase Option as to any or all of the Unreleased Shares at any time within ninety (90) days following the termination of the Purchaser’s Services.

2.3.4. The Repurchase Option shall be exercised by the Company, if at all, by delivering written notice to the Purchaser or, in the event of the Purchaser’s death, the Purchaser’s executor and, by (i)  delivery to Purchaser or Purchaser’s executor a check in the amount of the Repurchase Price, (ii) by cancellation of indebtedness equal to the Repurchase Price, or (iii) by a combination of (i) and (ii) so that the combined payment and cancellation of indebtedness equals the Repurchase Price.  To the extent one or more certificates representing Unreleased Shares may have been previously delivered out of escrow to the Purchaser, then the Purchaser shall, prior to the close of business on the date specified for the repurchase, deliver to the Secretary of the Company the certificate(s) representing the Unreleased Shares to be repurchased, each certificate to be properly endorsed for transfer.  Upon delivery of such notice and the payment of the aggregate Repurchase Price, the Company shall become the legal and beneficial owner of the Unreleased Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Unreleased Shares being repurchased by the Company, without further action by Purchaser.

2.4.   Purchaser’s Rights to Transfer Shares.  In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares while the Shares are subject to the Company’s Repurchase Option (as defined below).  After any Shares have been released from such Repurchase Option, Purchaser shall not assign, encumber or dispose of any interest in such Shares except in compliance with the provisions below and applicable securities laws.

2.4.1. Company’s Right of First Refusal.  Before any Shares held by Purchaser or any permitted transferee (each, a “Holder”) may be sold, pledged, assigned, hypothecated, transferred, or otherwise disposed of (each, a “Transfer”), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares proposed to be Transferred on the terms and conditions set forth in this Section 5 (the “Right of First Refusal”).

2.4.2. Notice of Proposed Transfer.  In the event any Holder desires to Transfer any Shares, the Holder shall deliver to the Company a written notice (the “Notice”) stating:  (w) the Holder’s bona fide intention to sell or otherwise Transfer such Shares; (x) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (y) the number of Shares to be Transferred to each Proposed Transferee; and (z) the bona fide cash price or other consideration for which the Holder proposes to Transfer the Shares (the “Offered Price”), and the Holder shall offer such Shares at the Offered Price to the Company or its assignee(s).

2.4.3. Exercise of Right of First Refusal.  Within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may elect in writing to purchase all, but not less than all, of the Shares proposed to be Transferred to any one or more of the Proposed Transferees.  

2.4.4. Purchase Price.  The purchase price (“Repurchase Price”) for the Shares repurchased under this Section 5 shall be the Offered Price.  If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board in good faith.

2.4.5. Payment. Payment of the Repurchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times mutually agreed to by the Company and the Holder.

2.4.6. Holder’s Right to Transfer.  If all of the Shares proposed in the Notice to be Transferred are not purchased by the Company and/or its assignee(s) as provided in this Section 5, then the Holder may sell or otherwise Transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other Transfer is consummated within one hundred twenty (120) days after the date of the Notice and provided further that any such sale or other Transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section 5 and the Restricted Stock Purchase Agreement, if applicable, shall continue to apply to the Shares in the hands of such Proposed Transferee.  If the Shares described in the Notice are not Transferred to the Proposed Transferee within such 120-day period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal as provided herein before any Shares held by the Holder may be sold or otherwise Transferred.

2.4.7. Exception for Certain Family Transfers.  Anything to the contrary contained in this Section 5 notwithstanding, the Transfer of any or all of the Shares during the Purchaser’s lifetime or upon the Purchaser’s death by will or intestacy to the Purchaser’s Immediate Family or a trust for the benefit of the Purchaser’s Immediate Family shall be exempt from the Right of First Refusal.  As used herein, “Immediate Family” shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister or stepchild (whether or not adopted).  In such case, the transferee or other recipient shall receive and hold the Shares so Transferred subject to the provisions of this Agreement, and there shall be no further Transfer of such Shares except in accordance with the terms of this Section 5.

2.4.8. Termination of Right of First Refusal.  The Right of First Refusal shall terminate as to all Shares upon a sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (a “Public Offering”).

2.5.   Investment Representations  

2.5.1. Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares.  Purchaser is purchasing the Shares for investment for Purchaser’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law.  Purchaser does not have any present intention to transfer the Shares to any other person or entity.

2.5.2. Purchaser understands that the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.  

2.5.3. Purchaser further acknowledges and understands that the securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available.  Purchaser further acknowledges and understands that the Company is under no obligation to register the securities.

2.5.4. Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions.  Purchaser understands that the Company provides no assurances as to whether he or she will be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things, that resales of securities take place only after the holder of the Shares has held the Shares for certain specified time periods, and under certain circumstances, that certain information about the Company be current and publicly available, and that resales of securities be limited in volume and take place only pursuant to brokered transactions.  Notwithstanding this Section 5(d), Purchaser acknowledges and agrees to the restrictions set forth in Section 5(e) below.

2.5.5. Purchaser further understands that in the event all of the applicable requirements of Rule 144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

2.5.6. Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares.  Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

2.6.   Escrow of Unvested Shares

2.6.1. Delivery of Certificates. For purposes of facilitating the enforcement of the provisions of Section 3 above, Purchaser agrees, immediately upon receipt of any certificate(s) for the Shares subject to the Repurchase Option, to deliver such certificate(s), together with an Assignment Separate from Certificate in the form attached to this Agreement as Exhibit A executed by Purchaser and by Purchaser’s spouse (if required for transfer), in blank, to the Secretary of the Company, or the Secretary’s designee, to hold such certificate(s) and Assignment Separate from Certificate in escrow and to take all such actions and to effectuate all such transfers and/or releases as are in accordance with the terms of this Agreement.  

2.6.2. Secretary as Escrow Holder.  Purchaser hereby acknowledges that the Secretary of the Company, or the Secretary’s designee, is so appointed as the escrow holder with the foregoing authorities as a material inducement to make this Agreement and that said appointment is coupled with an interest and is accordingly irrevocable.  Purchaser agrees that said escrow holder shall not be liable to any party hereof (or to any other party).  The escrow holder may rely upon any letter, notice or other document executed by any signature purported to be genuine and may resign at any time.  Purchaser agrees that if the Secretary of the Company, or the Secretary’s designee, resigns as escrow holder for any or no reason, the Board shall have the power to appoint a successor to serve as escrow holder pursuant to the terms of this Agreement.

2.7.   Ownership, Voting Rights, Duties. This Agreement shall not affect in any way the ownership, voting rights or other rights or duties of Purchaser, except as specifically provided herein.

2.8.   Restrictive Legends and Stop-Transfer Orders

2.8.1. Any share certificate(s) evidencing the Shares issued hereunder shall be endorsed with the following legends and any other legends that may be required by state or federal securities laws:



2.8.2. Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

2.8.3. The Company shall not be required: (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

2.9.   Section 83(b) Election for Unreleased Shares

2.9.1. Purchaser is Informed. Purchaser hereby acknowledges that he or she has been informed that, with respect to the purchase of Unreleased Shares, that unless an election is filed by Purchaser with the Internal Revenue Service and, if necessary, the proper state taxing authorities, within thirty (30) days of the purchase of the Shares, electing pursuant to Section 83(b) of the Code (and similar state tax provisions if applicable) to be taxed currently on any difference between the purchase price of the Shares and their Fair Market Value on the date of purchase, there will be a recognition of taxable income to the Purchaser, measured by the excess, if any, of the fair market value of the Shares, at the time the Company’s Repurchase Option lapses over the purchase price for the Shares.  Purchaser represents that Purchaser has consulted any tax consultant(s) Purchaser deems advisable in connection with the purchase of the Shares or the filing of the Election under Section 83(b) and similar tax provisions.

2.9.2. Purchaser’s Sole Responsibility. Purchaser acknowledges that it is Purchaser’s sole responsibility and not the Company to file timely the election under section 83(b), even if purchaser requests the Company or its representative to make this filing on Purchaser’s behalf.

2.10. Conformity to Securities Laws. Purchaser acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Shares are to be issued, only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. Purchaser shall not transfer in any manner the Shares issued pursuant to this Agreement, without regard to whether such Shares are no longer subject to the Repurchase Option, unless (i) the transfer is pursuant to an effective registration statement under the Securities Act, or the rules and regulations in effect thereunder or (ii) counsel for the Company shall have reasonably concluded that no such registration is required because of the availability of an exemption from registration under the Securities Act.

2.11. Market Standoff Agreement.  Purchaser hereby agrees that if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act, Purchaser shall not sell or otherwise transfer any Shares or other securities of the Company during the 180day period (or such longer period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act.  The Company may impose stoptransfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period and these restrictions shall be binding on any transferee of such Shares.  Notwithstanding the foregoing, the 180-day period may be extended for up to such number of additional days as is deemed necessary by the Company or the Managing Underwriter to continue coverage by research analysts in accordance with NASD Rule 2711 or any successor rule.

2.12. Certain Tax Matters

2.12.1.    Generally. Purchaser shall, if required by the Administrator, enter into an election with the Company or a Subsidiary (in a form approved by the Company) under which any liability to the Company’s (or a Subsidiary’s) Tax Liability, including, but not limited to, National Insurance Contributions (“NICs”) and the Fringe Benefit Tax (“FBT”), is transferred to and met by Purchaser.  For purposes of this Section 13, Tax Liability shall mean any and all liability under non-U.S. applicable laws, rules or regulations from any income tax, the Company’s (or a Subsidiary’s) NICs, FBT or similar liability and the Purchaser’s NICs, FBT or similar liability that are attributable to: (A) the grant or exercise of, or any other benefit derived by the Purchaser from the Shares; (B) the acquisition by Purchaser of the Shares; or (C) the disposal of any Shares.

2.12.2.    Tax Indemnity.  Purchaser shall indemnify and keep indemnified the Company and any of its Subsidiaries from and against any Tax Liability.  

2.12.3.    Representation. Purchaser has reviewed with his or her own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement.  Purchaser is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.  Purchaser understands that Purchaser (and not the Company) shall be responsible for his or her own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

2.12.4.    Consideration to the Company.  In consideration of the issuance of the Shares by the Company, Purchaser agrees to render faithful and efficient services to the Company or any Subsidiary.  Nothing in the Plan or this Agreement shall confer upon Purchaser any right to (a) continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are hereby expressly reserved, to discharge Purchaser, if Purchaser is an Employee, or (b) continue to provide services to the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company or its Subsidiaries, which are hereby expressly reserved, to terminate the services of Purchaser, if Purchaser is a Consultant, at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company and Purchaser.

2.12.5.    Spousal Consent.  If Purchaser is married, his or her spouse has signed the Consent of Spouse attached to this Agreement as Exhibit B.  

2.13. Miscellaneous

2.13.1.    Governing Law; Severability. This Agreement shall be governed by and construed in accordance with the laws of the State of [Home State] excluding that body of law pertaining to conflicts of law.  Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.

2.13.2.    Notices. Notices required hereunder shall be given in person or by registered mail to the address of Purchaser shown on the records of the Company, and to the Company at its principal executive office.

2.13.3.    Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Purchaser and his or her heirs, executors, administrators, successors and assigns.

2.13.4.    Interpretation.  Any dispute regarding the interpretation of this Agreement shall be submitted by Purchaser or by the Company forthwith to the Company’s Board of Directors or committee thereof that is responsible for the administration of the Plan (the “Administrator”), which shall review such dispute at its next regular meeting.  The resolution of such a dispute by the Administrator shall be final and binding on the Company and on Purchaser.

2.13.5.    Entire Agreement. The Plan and Agreement are incorporated herein by reference.  This Agreement, the Plan, the Agreement and the Investment Representation Statement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof. 

IN WITNESS WHEREOF, this Stock Purchase Right Notice And Restricted Stock Purchase Agreement is deemed made as of the date first set forth above.




Name: [Company Representative]

Title: [Representative Title]





By:______________________Sign Here

Name: [Purchaser Name]

Address: [Purchaser Address]


FOR VALUE RECEIVED I, ________________, hereby sell, assign and transfer unto (__________) shares of the Common Stock of [__________], Inc. registered in my name on the books of said corporation represented by Certificate No. _____ herewith and do hereby irrevocably constitute and point to transfer the said stock on the books of the within named corporation with full power of substitution in the premises. This Assignment Separate from Certificate may be used only in accordance with the Restricted Stock Purchase Agreement between [__________], Inc. and the undersigned dated ______________, _____.




Instructions:  Please do not fill in any blanks other than the signature line.  The purpose of this assignment is to enable the Company to exercise its repurchase option set forth in the Agreement without requiring additional signatures on the part of Purchaser.   


Any [GREEN] highlighted language is intended to be filled in by the user. Any [YELLOW] highlighted language is considered optional or conditional by the attorney community. Consult with an attorney before using this document. This document is not a substitute for legal advice or services. Refer to our Terms of Use for more details.

This form has been prepared for general informational purposes only. It does not constitute legal advice, advertising, a solicitation, or tax advice. Transmission of this form and the information contained herein is not intended to create, and receipt thereof does not constitute formation of, an attorney-client relationship. You should not rely upon this document or information for any purpose without seeking legal advice from an appropriately licensed attorney, including without limitation to review and provide advice on the terms of this form, the appropriate approvals required in connection with the transactions contemplated by this form, and any securities law and other legal issues contemplated by this form or the transactions contemplated by this form.

Was this document helpful? Share it with your network!
Want High Quality, Transparent, and Affordable Legal Services?