Can this agreement be signed electronically?

Yes. Electronic signatures are generally valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and reliable retention are satisfied.

How should performance metrics be documented?

Document metrics with precise formulas, measurement periods, data sources, and thresholds. Ambiguity increases dispute risk and complicates accounting and tax treatment.

When are awards taxable?

Tax treatment depends on award type and event (vesting, settlement, or exercise). Employers should coordinate withholding and reporting and employees may consider elections like Section 83(b) when available.

Who needs to sign the agreement?

The employee and an authorized company representative should sign. Ensure board or committee approvals are documented separately when required by corporate governance.

Is notarization or witnesses required?

Most employment equity agreements do not require notarization or witnesses. If a state or specific plan requires notarization, follow that jurisdiction's rules or use RON where permitted.

How can the agreement be amended later?

Amendments should be in writing, signed by authorized parties, and reference the original agreement. Preserve version history and record governance approvals.

Electronic Signature
Templates
HR
Employee Performance Share Agreement

Employee Performance Share Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

EMPLOYEE PERFORMANCE SHARE AGREEMENT

This Employee Performance Share Agreement (the "Agreement") is entered into as of by and between Employer Name: and Employee Name: .

PERSONAL INFORMATION

Full Legal Name Address

Phone

Email

POSITION INFORMATION

Job Title Department

Reporting Manager

Start Date

Annual Salary

RECITALS AND DEFINITIONS

Employer desires to grant performance-based shares to Employee subject to the terms and conditions set forth in this Agreement. Capitalized terms used but not defined herein shall have the meanings set forth in the Employer's equity incentive plan (the "Plan"), if applicable.

GRANT DETAILS

Grant Date

Number of Shares

Share Class

Performance Period to

Vesting Schedule and Conditions Performance Criteria (specific, measurable targets)

FORFEITURE, ADJUSTMENTS AND CLAWBACK

Shares granted under this Agreement shall vest only upon satisfaction of the Performance Criteria and in accordance with the Vesting Schedule. In the event of termination for Cause or voluntary resignation prior to vesting, unvested shares shall be forfeited. Employer reserves the right to adjust the number of shares, accelerate or delay vesting, or require repayment (clawback) in accordance with written Company policy or applicable law.

Forfeiture / Clawback Provisions Acknowledgement

I acknowledge and agree to the forfeiture and clawback provisions described above.

TAXES AND WITHHOLDING

Employee acknowledges that Employer may withhold from payroll or require other arrangements to satisfy any tax withholding obligations arising in connection with the grant, vesting, or disposition of shares. Employee agrees to execute any documents reasonably required to effectuate such withholding.

I authorize Employer to withhold applicable taxes related to this Agreement.

COMPLIANCE AND REPRESENTATIONS

Employee represents and warrants that Employee is not subject to any agreement or obligation that would prevent performance of Employee's duties or compliance with this Agreement. Employee agrees to comply with all Company policies, the Plan (if applicable), securities laws and any trading blackout policies.

Employee Representations (material conflicts or restrictions)

NOTICES

Employer Notice Address Employee Notice Address

GOVERNING LAW AND MISCELLANEOUS

This Agreement shall be governed by and construed in accordance with the laws of the state identified below, without regard to conflict of law principles. This Agreement constitutes the entire agreement between the parties regarding the subject matter hereof and may be amended only by a written instrument signed by both parties. If any provision is held invalid, the remaining provisions shall remain in full force and effect.

Governing Law State

AT-WILL EMPLOYMENT AND EQUAL OPPORTUNITY

Nothing in this Agreement shall be construed to alter the at-will nature of the employment relationship unless expressly stated in a separate written employment agreement signed by both parties. Employer is an equal opportunity employer and does not discriminate on the basis of protected characteristics.

AUTHORIZATION AND BACKGROUND

Employee authorizes Employer and its agents to contact prior employers and references and to obtain background information, including criminal history and employment verification, to the extent permitted by law.

I authorize Employer to contact prior employers and references and to obtain background checks as described above.

EMPLOYMENT HISTORY

Provide the two most recent employers.

Employer 1 - Company Name

Title

Dates Employed

Primary Responsibilities Reason for Leaving Employer 2 - Company Name

Title

Dates Employed

Primary Responsibilities Reason for Leaving

EDUCATION

Highest Degree Institution Graduation Date

PROFESSIONAL REFERENCES

Provide three professional references.

Reference 1 - Name

Phone

Email

Relationship

Reference 2 - Name

Phone

Email

Relationship

Reference 3 - Name

Phone

Email

Relationship

APPLICANT CERTIFICATION

I certify that all information provided in this Agreement and in any attachments or related forms is true, complete and correct to the best of my knowledge. I understand that any material misrepresentation or omission may be grounds for rescission of the grant, forfeiture of shares, and/or disciplinary action up to and including termination.

I certify that the information provided is true and complete.

MISCELLANEOUS PROVISIONS

Any amendment to this Agreement shall be valid only if in writing and signed by both Employer and Employee. No waiver of any provision shall be effective unless in writing. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

Employer Printed Name:

By:

Date:

Employee Printed Name:

Signature:

Date:

What an Employee Performance Share Agreement Is

An Employee Performance Share Agreement is a legally binding contract that grants an employee shares or share-equivalent units conditioned on meeting defined performance goals. The agreement specifies performance metrics, measurement periods, vesting triggers, share type, transfer restrictions, and any compensation or tax treatment. Companies use these agreements to align employee incentives with business objectives, clarify rights on vesting or forfeiture, and set reporting responsibilities. Electronic execution is generally acceptable under federal and state e-signature laws such as the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted.

Why the Agreement Matters for Employers and Employees

The Employee Performance Share Agreement aligns incentives, supports retention, and ties equity outcomes to measurable goals. It creates clear triggers for issuance and tax reporting while documenting restrictions, transferability, and remediation steps in case performance targets are not met.

Who Typically Prepares and Signs This Agreement

Organizations of varying sizes use performance share agreements when equity is part of compensation or retention strategies.

HR and compensation teams managing equity programs for employees and executives
Founders and startup boards approving equity grants during fundraising or growth stages
Legal counsel and corporate secretaries drafting enforceable terms and compliance language

Responsibilities usually split: HR and finance handle administration, legal handles drafting and compliance, and authorized officers complete execution.

Primary Parties and Their Roles

Employee

The recipient whose continued employment and achievement of specified targets determine vesting and payment. The employee should confirm personal data, review performance metrics, and retain a signed copy for tax and recordkeeping purposes.

Company Officer

A corporate officer or authorized signatory who certifies the grant, ensures necessary corporate approvals and board resolutions, and coordinates tax withholding and equity ledger entries following vesting or settlement.

Core Elements to Include in a Professional Agreement

A complete Employee Performance Share Agreement defines how, when, and under what conditions shares are earned, issued, and reported for tax and accounting purposes.

Grant Description

Specify share class, number of shares or units, and whether awards are restricted stock, RSUs, or phantom shares, including any conversion mechanics.

Performance Metrics

Define measurable targets, the exact calculation method, thresholds for achievement, and the measurement period used to determine vesting outcomes.

Vesting Schedule

State precise vesting dates, cliffs, pro rata calculations, and acceleration conditions tied to performance or corporate transactions.

Rights & Restrictions

List voting rights, dividend equivalents, transfer restrictions, repurchase rights, and conditions triggering forfeiture or clawback.

Tax Treatment

Address withholding, reporting (W-2/1099 implications), and whether elections (e.g., Section 83(b)) are permitted and their deadlines.

Dispute Procedures

Include governing law, dispute resolution steps, required approvals, and any administrative review processes.

Step-by-Step: From Draft to Fully Executed

Follow these sequential steps to minimize legal, tax, and administrative risk when issuing a performance share award.

01

Draft Agreement: Prepare terms, performance definitions, and tax language.
02

Obtain Approvals: Secure board, compensation committee, and legal signoff.
03

Execute Signatures: Collect signatures electronically or in writing.
04

Record & Report: Update equity register and complete tax reporting.

How to Configure an Online Signing Workflow

Set up a consistent digital workflow that enforces signature order, authentication, and required fields for every grant.

Field	Configuration
Authentication	Email link, SMS code, or KBA as needed
Conditional Fields	Show fields only when criteria are met
Template	Save a reusable template for consistency
Bulk Send	Use bulk send for multiple recipients

Typical Digital Execution Flow

A repeatable e-signature flow reduces errors and preserves a complete audit trail for compliance and recordkeeping.

Upload Document: Upload finalized agreement as PDF or DOCX.
Place Fields: Add signature, date, and data fields for each signer.
Send to Signer: Deliver via secure email link or bulk send.
Finalize: Capture completed PDF and audit history.

Digital Signing and Format Requirements

Ensure your signing platform supports required file formats, signer authentication, and security controls before e-execution.

File Types: PDF and DOCX supported
Authentication: Email, SMS, or advanced 2FA
Integrations: CRM and storage integrations

Use a provider that enforces TLS 1.2/1.3 in transit and AES-256 at rest, and that can produce a detailed audit trail for each signing event.

Key Timing and Reporting Deadlines to Track

Track measurement periods, vesting dates, and tax-reporting deadlines to avoid withholding or information return penalties.

Grant Date Recorded:

Record on grant date; affects vesting and tax timing.

Performance Measurement End:

End date for KPI evaluation and vesting determination.

Vesting Effective Dates:

Dates when shares are earned and subject to reporting.

W-2 / 1099 Reporting:

Report compensation by Jan 31 to recipients (IRS deadlines).

83(b) Election Window:

If available, file within 30 days of grant (when applicable).

Common Preparation Mistakes to Avoid

Vague performance metrics that create disputes over achievement and payout
Inconsistent or missing grant and vesting dates that affect tax and accounting treatment
Failing to obtain required board or shareholder approvals before issuing shares
Omitting withholding instructions or failing to coordinate payroll and tax reporting

Potential Legal and Financial Risks

Tax Withholding: Penalties for failure to withhold or report

Securities Compliance: Risk of violating registration rules

Breach Disputes: Claims over ambiguous performance conditions

Forfeiture Clauses: Improperly drafted forfeiture can be unenforceable

Information Return Penalties: Late/missing filings can incur IRC penalties

Audit Exposure: Inadequate records increase audit risk

Security and Compliance Considerations

Encryption In Transit: TLS 1.2/1.3

Encryption At Rest: AES-256

Certifications: SOC 2 Type II

International Standards: ISO 27001

HIPAA Support: BAA available where required

ESIGN / UETA: Compliant with e-signature laws

How to Save, Export, and Archive Executed Agreements

Preserve signed agreements and all metadata to support audits, accounting, and tax reporting obligations.

Export Formats

Save executed copies as searchable PDF/A and retain original DOCX drafts where needed for edits or records.

Audit Trail Export

Include a certificate of completion with timestamps, IP addresses, and signer authentication details for each executed file.

Version Control

Keep a single authoritative executed copy and record amendments separately with dates and signatures.

Long-Term Storage

Store records with redundancy, access controls, and retention tagging for regulatory retention periods.

eSignature Vendor Pricing Comparison for Agreement Execution

A comparison of common eSignature vendors and plan-level attributes relevant to executing Employee Performance Share Agreements and recordkeeping.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Trial available	Trial available	Trial available	Trial available
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently Asked Questions about Employee Performance Share Agreements

Answers to common questions covering electronic signatures, enforceability, tax treatment, and amendment procedures for performance share agreements.

Need help? Contact support

Can this agreement be signed electronically?
Yes. Electronic signatures are generally valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and reliable retention are satisfied.
How should performance metrics be documented?
Document metrics with precise formulas, measurement periods, data sources, and thresholds. Ambiguity increases dispute risk and complicates accounting and tax treatment.
When are awards taxable?
Tax treatment depends on award type and event (vesting, settlement, or exercise). Employers should coordinate withholding and reporting and employees may consider elections like Section 83(b) when available.
Who needs to sign the agreement?
The employee and an authorized company representative should sign. Ensure board or committee approvals are documented separately when required by corporate governance.
Is notarization or witnesses required?
Most employment equity agreements do not require notarization or witnesses. If a state or specific plan requires notarization, follow that jurisdiction's rules or use RON where permitted.
How can the agreement be amended later?
Amendments should be in writing, signed by authorized parties, and reference the original agreement. Preserve version history and record governance approvals.

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