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Employee Equity Compensation Agreement
"I need an Employee Equity Compensation Agreement for our Canadian tech startup that will grant stock options to senior software engineers, with a four-year vesting schedule starting March 2025 and special provisions for acceleration upon acquisition."
1. Parties: Identifies the company and the employee receiving equity compensation
2. Background: Explains the context of the agreement and the company's equity compensation program
3. Definitions: Defines key terms used throughout the agreement including types of shares, vesting periods, and relevant corporate events
4. Grant of Equity: Details the type and amount of equity being granted (e.g., options, RSUs, or shares)
5. Vesting Schedule: Specifies the vesting timeline and conditions for the equity compensation
6. Exercise Terms: Outlines the process, price, and conditions for exercising equity rights
7. Restrictions on Transfer: Describes limitations on selling, transferring, or encumbering the equity
8. Termination Provisions: Explains what happens to equity in various employment termination scenarios
9. Tax Obligations: Addresses tax implications and responsibilities of both parties
10. Compliance with Securities Laws: Confirms compliance with applicable securities regulations
11. Shareholders' Rights and Obligations: Details voting rights, dividend rights, and other shareholder matters
12. General Terms: Standard contract provisions including amendments, notices, and governing law
1. Change of Control Provisions: Used when company wants to specify treatment of equity in merger/acquisition scenarios
2. Lock-up Period: Include if there are post-vesting restrictions on selling equity
3. Drag-along Rights: Add when majority shareholders want right to force minority shareholders to join in sale
4. Tag-along Rights: Include to give minority shareholders right to join in sale of majority shares
5. International Tax Provisions: Required for employees subject to tax in multiple jurisdictions
6. Intellectual Property Rights: Include if equity grant is tied to IP assignments
7. Non-Competition and Non-Solicitation: Add if equity grant is conditional on these restrictions
8. Clawback Provisions: Include if company wants right to recoup equity in case of misconduct
1. Schedule A - Grant Notice: Details specific to individual grant including number of shares/options and grant date
2. Schedule B - Vesting Schedule: Detailed breakdown of vesting dates and quantities
3. Schedule C - Exercise Notice: Form for employee to use when exercising options
4. Schedule D - Shareholders' Agreement: Copy or summary of relevant shareholders' agreement provisions
5. Schedule E - Tax Election Forms: Required tax forms including Section 85(1) election forms if applicable
6. Appendix 1 - Company's Stock Option Plan: Full text of the company's equity compensation plan
7. Appendix 2 - Consent of Spouse: Required in some provinces for spousal rights waiver
8. Appendix 3 - Board Resolutions: Copy of board approval for the equity grant
Authors
Technology
Start-ups
Financial Services
Professional Services
Biotechnology
Software Development
E-commerce
Consulting
Healthcare Technology
Clean Technology
Digital Media
Telecommunications
Human Resources
Legal
Finance
Executive Leadership
Corporate Governance
Compensation & Benefits
Stock Administration
Payroll
Talent Acquisition
Chief Executive Officer
Chief Financial Officer
Chief Technology Officer
Senior Software Engineer
Product Manager
Director of Sales
HR Director
Legal Counsel
Senior Manager
Department Head
Vice President
Principal Engineer
Research Scientist
Business Development Manager
Operations Director
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