[Consultation] Stock payment in restricted stock disposition method for executives]

Law firm Veat has drafted a stock transfer agreement including a vesting schedule that grants stock to executives and prevents them from selling the stock for a certain period of time.

A company that supplies fintech-related software to executives has requested that it draft a stock transfer agreement based on the condition that it grants stock to executives and prevents them from selling the stock for a certain period of time.

Following A’s request, Law firm Veat has drafted a stock transfer agreement including a vesting schedule that grants stock to executives, but prevents them from selling the stock for a certain period of time.

Vesting (Vesting) also known as conditional incomplete stock grant, refers to a method of granting stock to employees according to the duration of employment (Vesting Schedule).

By setting a vesting schedule, granting stock, from a company’s perspective, is relatively safer because it prevents employees from quitting or changing jobs immediately after receiving the stock. However, when setting a vesting schedule, there are various conditions to consider, such as the vesting period, the starting date of the vesting period, the frequency of vesting, and the presence or absence of a cliff period. Therefore, it is advisable to seek advice from a professional with extensive experience in this area and proceed carefully.

If you need legal advice regarding vesting, stock grant methods, and drafting stock transfer agreements, please contact Law firm Veat at any time.

Thank you.