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Stock Option Purchase Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Stock Option Purchase Agreement

"I need a Stock Option Purchase Agreement for our UAE-based technology startup, granting options to our senior developers with a four-year vesting schedule starting March 2025, including specific provisions for remote workers based in Dubai and Abu Dhabi."

Document background
The Stock Option Purchase Agreement serves as a critical instrument in UAE corporate practice for companies looking to attract, retain, and motivate key personnel through equity-based incentives. This document is particularly relevant in the context of UAE's evolving business landscape, where both mainland and free zone companies increasingly use stock options as part of their compensation strategies. The agreement must navigate the complexities of UAE commercial law, securities regulations, and employment legislation while providing a clear framework for option grants. It typically includes detailed provisions on vesting schedules, exercise procedures, and restrictions on transfer, all tailored to comply with UAE legal requirements and market practices. The document is especially important for growth-stage companies, startups, and established corporations looking to align employee interests with company success through equity participation.
Suggested Sections

1. Parties: Identification of the Company granting the options and the Option Holder, including full legal names and addresses

2. Background: Context of the agreement, including reference to any employment relationship or service provision

3. Definitions: Key terms used throughout the agreement, including 'Option Shares', 'Exercise Price', 'Grant Date', 'Vesting Schedule', etc.

4. Grant of Option: Details of the stock options being granted, including number of shares, class of shares, and exercise price

5. Vesting Schedule: Timeline and conditions for when options become exercisable

6. Exercise of Options: Process and procedures for exercising options, including payment methods and notice requirements

7. Term and Expiration: Duration of the option grant and circumstances leading to expiration

8. Compliance with Laws: Provisions ensuring compliance with UAE securities laws and regulations

9. Representations and Warranties: Statements of fact and assurances from both parties

10. Restrictions on Transfer: Limitations on transferring or assigning the options or resulting shares

11. Termination: Consequences of employment termination or other events on option rights

12. Taxes and Costs: Responsibility for taxes, fees, and other costs related to the options

13. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution

Optional Sections

1. Change in Control Provisions: Used when the company wants to specify what happens to options in case of merger, acquisition, or other corporate restructuring

2. Lock-up Period: Include when there are restrictions on selling shares after exercise, particularly relevant for pre-IPO companies

3. Shareholder Rights: Include when option holders receive specific rights before exercise of options

4. Right of First Refusal: Include when the company wants the right to repurchase shares before they are sold to third parties

5. Tag-Along Rights: Include when option holders should have the right to join in sale of shares by major shareholders

6. International Supplement: Include when option holders may be subject to multiple jurisdictions

7. Clawback Provisions: Include when the company wants the right to recoup benefits in certain circumstances

Suggested Schedules

1. Schedule 1 - Option Certificate: Formal certificate detailing the specific grant of options

2. Schedule 2 - Notice of Exercise: Template form for exercising options

3. Schedule 3 - Vesting Schedule Details: Detailed breakdown of vesting dates and conditions

4. Schedule 4 - Shareholders' Agreement: Key terms from the company's shareholders' agreement that will apply post-exercise

5. Schedule 5 - Company's Articles of Association: Relevant excerpts from the company's articles affecting option holders

6. Appendix A - Tax Treatment Summary: Summary of tax implications under UAE law

7. Appendix B - Regulatory Compliance Checklist: Checklist ensuring compliance with UAE securities regulations

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions



































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Relevant Industries

Technology

Financial Services

E-commerce

Healthcare

Professional Services

Real Estate

Manufacturing

Retail

Telecommunications

Energy

Media and Entertainment

Consulting

Education

Biotechnology

Software Development

Relevant Teams

Legal

Human Resources

Finance

Compliance

Corporate Governance

Executive Leadership

Board of Directors

Compensation and Benefits

Corporate Secretariat

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

General Counsel

HR Director

Compensation Manager

Corporate Secretary

Legal Counsel

Finance Manager

HR Manager

Compliance Officer

Board Member

Executive Director

Senior Manager

Department Head

Employee Benefits Specialist

Stock Plan Administrator

Corporate Governance Officer

Industries







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,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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