The Board of Approval of Restricted Stock Award is one of a group of documents that formally chronicles the approval of a “resolution” by your startup’s board of directors. A resolution is a decision or objective that has been voted on (and was agreed to) by your startup’s board members. The process of formal documentation is generally reserved for important or significant resolutions – examples of this sort are the approval of a Restricted Stock Award, and the issuance of stock options to a given individual. Many less-impactful decisions involving your startup will be discussed and voted on by board members (replacing a non-critical vendor or changing the appearance of your employees’ uniforms might qualify), however – while these should always be recorded – they do not require formal documentation.
The Board Approval of Restricted Stock Award allows your startup’s board of directors (having established a fair market value per share of your startup’s Common Stock) to approve the stock purchase rights of the purchasee(s) named in the document. The Board Approval of Restricted Stock Award should be accompanied by a signed Restricted Stock Purchase Agreement from each purchasee. The Restricted Stock Purchase Agreement will detail how payment for the shares is to be executed (with cash, services, or by another method), and what repurchase rights your startup retains.