CUSTODY OF SHARES OF RESTRICTED STOCK; RIGHTS WITH RESPECT TO STOCK Clause Samples
This clause defines how restricted stock shares are held and outlines the rights associated with those shares. Typically, it specifies that the company or its agent will retain physical or electronic custody of the restricted shares until certain conditions, such as vesting or lapse of restrictions, are met. During this period, the holder may retain some rights, such as voting or receiving dividends, but cannot transfer or sell the shares. The core function of this clause is to ensure the company maintains control over the restricted stock until all requirements are satisfied, thereby protecting its interests and enforcing the terms of the stock grant.
CUSTODY OF SHARES OF RESTRICTED STOCK; RIGHTS WITH RESPECT TO STOCK. (a) The Restricted Stock granted hereunder shall be issued and registered in the Participant's name and shall be held by the Company during the Restricted Period. The Company shall serve as attorney-in-fact for the Participant during the Restricted Period with full power and authority in the Participant's name to assign and convey to the Company any shares of Restricted Stock held by the Company for such Participant if the Participant forfeits the shares under the terms of this Grant Agreement. Each certificate representing shares of Restricted Stock may bear a legend referring to this Grant Agreement and the Plan and the risk of forfeiture of the shares of Restricted Stock and stating that such shares of Restricted Stock are nontransferable until all restrictions have been satisfied and the legend has been removed.
(b) During the Restricted Period, the Participant shall be a stockholder and have all the rights of a stockholder with respect to such shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such shares; provided, however, that such Restricted Stock and any new, additional or different securities the Participant may become entitled to receive with respect to such Restricted Stock by virtue of a stock split, dividend or other change in the corporate or capital structure of the Company, shall be subject to the restrictions described in this Grant Agreement.