Share Retention Agreement

Share Retention Agreement Template for Nigeria

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Key Requirements PROMPT example:

"I need a Share Retention Agreement for our tech startup where three founding shareholders must retain 75% of their shares until January 2025, with an exception allowing transfer to immediate family members."

Document background

Share Retention Agreements are crucial instruments in Nigerian corporate practice, commonly used to ensure stability in shareholding structures and demonstrate commitment to long-term corporate objectives. These agreements are particularly relevant in scenarios such as post-IPO lock-up periods, corporate restructuring, joint ventures, or strategic investments. The document must comply with Nigerian legislation, particularly CAMA 2020 and relevant Securities and Exchange Commission regulations. It typically includes detailed provisions on retention periods, transfer restrictions, permitted exceptions, and enforcement mechanisms. Share Retention Agreements are especially important in maintaining investor confidence, ensuring business continuity, and supporting corporate governance objectives within the Nigerian business environment.

Suggested Sections

1. Parties: Identification of all parties to the agreement, including the shareholder(s) subject to retention obligations and the company

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

3. Definitions and Interpretation: Definition of key terms and interpretation rules for the agreement

4. Retention Obligation: Core obligations regarding share retention, including duration and quantity of shares to be retained

5. Transfer Restrictions: Specific restrictions on transfer, sale, or encumbrance of the retained shares

6. Permitted Transfers: Circumstances under which transfers may be permitted despite retention obligations

7. Compliance and Reporting: Requirements for demonstrating compliance with retention obligations

8. Events of Default: Circumstances constituting breach and consequences thereof

9. Remedies: Available remedies in case of breach, including specific performance and damages

10. Term and Termination: Duration of the agreement and circumstances for early termination

11. Governing Law and Jurisdiction: Confirmation of Nigerian law as governing law and jurisdiction for disputes

12. Execution: Signature blocks and execution formalities

Optional Sections

1. Tag-Along Rights: Include when certain shareholders should have the right to join in any permitted sale of shares

2. Drag-Along Rights: Include when majority shareholders should have the right to force minorities to join in a sale

3. Share Certificates: Include when physical share certificates are involved and require specific handling

4. Corporate Governance Rights: Include when retention agreement affects board representation or voting rights

5. Tax Provisions: Include when specific tax implications need to be addressed

6. Competition Restrictions: Include when additional non-compete or non-solicitation provisions are required

7. Emergency Transfer Provisions: Include when need to address force majeure or unforeseen circumstances

8. Foreign Investment Compliance: Include when foreign shareholders are involved

Suggested Schedules

1. Schedule 1 - Share Details: Details of shares subject to retention, including share certificates numbers and class of shares

2. Schedule 2 - Shareholder Information: Detailed information about the retaining shareholders, including ownership percentages

3. Schedule 3 - Permitted Transfer Procedures: Detailed procedures for executing permitted transfers when allowed

4. Schedule 4 - Compliance Reporting Forms: Templates for periodic compliance reporting

5. Schedule 5 - Corporate Resolutions: Copies of relevant corporate resolutions authorizing the retention agreement

6. Appendix A - Share Certificates: Copies of relevant share certificates subject to retention

7. Appendix B - Company Constitution Excerpts: Relevant excerpts from company constitution regarding share transfers

Authors

Alex Denne

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

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Financial Services

Banking

Manufacturing

Technology

Telecommunications

Oil and Gas

Mining

Real Estate

Professional Services

Healthcare

Retail

Agriculture

Construction

Energy

Transportation and Logistics

Relevant Teams

Legal

Corporate Secretariat

Compliance

Risk Management

Corporate Affairs

Board Secretariat

Investment Relations

Corporate Strategy

Executive Management

Corporate Governance

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Governance Officer

Compliance Officer

Board Director

Managing Director

Investment Manager

Corporate Affairs Manager

Risk Manager

Share Registrar

Legal Director

Head of Corporate Strategy

Chief Operating Officer

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