In the context of stock plans, this is a provision in a grant agreement that makes your equity award contingent on your refraining from a specified action. This type of provision may involve, for example:
- confidentiality about company secrets
- nonsolicitation of employees after you leave the company
- noncompete forfeiture clauses
At the website of the SEC, you can see an example of a stock grant agreement that includes a restrictive covenant (see Section 2.2). For details about these provisions in grant agreements, see the related article on this website.
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