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Share Retention Agreement for the Netherlands

Share Retention Agreement Template for Netherlands

A Share Retention Agreement under Dutch law (governed by the Dutch Civil Code - Burgerlijk Wetboek) is a legally binding document that establishes obligations for shareholders to maintain ownership of their shares for a specified period. The agreement outlines specific retention requirements, transfer restrictions, compliance mechanisms, and enforcement provisions in accordance with Dutch corporate law. It includes detailed provisions for permitted transfers, reporting obligations, and consequences of breach, while ensuring compliance with both Dutch national regulations and applicable EU directives.

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What is a Share Retention Agreement?

Share Retention Agreements are crucial instruments in Dutch corporate governance, particularly following significant corporate events or investments. These agreements are commonly used after IPOs, during corporate restructurings, or in private equity transactions to ensure stability in share ownership and align shareholder interests with long-term company objectives. The document typically specifies the duration of retention periods, permitted exceptions for transfers, and compliance requirements under Dutch law. It's essential for maintaining investor confidence, ensuring business continuity, and meeting regulatory requirements, especially in regulated sectors. The agreement must comply with Dutch corporate law principles, including the Dutch Civil Code (Burgerlijk Wetboek) and relevant EU regulations.

What sections should be included in a Share Retention Agreement?

1. Parties: Identification of the contracting parties, including the company, shareholders subject to retention obligations, and any other relevant parties

2. Background: Context of the agreement, including company structure, reason for share retention requirements, and any relevant corporate history

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including specific Dutch law terms

4. Retention Obligations: Core obligations regarding share retention, including duration, percentage of shares to be retained, and any graduated release provisions

5. Transfer Restrictions: Specific restrictions on share transfers, including prohibited transfers and permitted exceptions

6. Compliance Requirements: Obligations for maintaining compliance, including reporting requirements and documentation

7. Duration and Termination: Term of the agreement and circumstances under which it can be terminated

8. Enforcement and Remedies: Consequences of breach and available remedies, including specific performance and damages

9. Confidentiality: Obligations regarding confidential information and announcement restrictions

10. Notices: Process and requirements for formal communications between parties

11. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and amendment procedures

What sections are optional to include in a Share Retention Agreement?

1. Employment Link: Used when share retention is connected to employment terms, including provisions for termination of employment

2. Share Classes: Required when different classes of shares are subject to different retention requirements

3. Corporate Approvals: Needed when specific corporate body approvals are required for certain actions

4. Tag-Along Rights: Optional protection for minority shareholders in case of permitted transfers

5. Drag-Along Rights: Optional mechanism to force minority shareholders to join in permitted transfers

6. Tax Provisions: Specific provisions dealing with tax implications of share retention and transfers

7. Authority Notifications: Required for regulated entities needing to notify regulatory authorities of ownership changes

What schedules should be included in a Share Retention Agreement?

1. Schedule 1 - Share Ownership Details: Current share ownership information, including number and class of shares held by each party

2. Schedule 2 - Retention Schedule: Detailed timeline of retention requirements and any graduated release provisions

3. Schedule 3 - Permitted Transfers: Specific circumstances and conditions under which transfers are permitted

4. Schedule 4 - Deed of Adherence: Form for new shareholders to agree to be bound by the retention agreement

5. Schedule 5 - Corporate Resolutions: Copies of relevant corporate approvals and resolutions

6. Appendix A - Calculation Methods: Methods for calculating retention requirements and any adjustments

7. Appendix B - Reporting Ƶ: Standard forms for periodic reporting of share ownership and compliance

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Netherlands

Publisher

Ƶ

Document Type

Stock Agreement

Cost

Free to use

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