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The Vested Equity Agreement is a crucial document in Pakistani corporate practice, typically used when companies want to grant equity to key employees, founders, or strategic partners while ensuring their long-term commitment. This agreement type has gained significance with the growth of Pakistan's startup ecosystem and the increasing need for competitive talent retention strategies. The document must comply with the Companies Act 2017, Securities Act 2015, and relevant Pakistani corporate regulations while incorporating international best practices for equity vesting. It includes detailed vesting schedules, conditions for acceleration, protection mechanisms for both the company and equity recipient, and specific provisions addressing local tax implications and regulatory requirements. The agreement is particularly valuable for startups and growing companies looking to align key stakeholders' interests with company success while managing cash flow through equity compensation.

1. Parties: Identification of the company and the equity recipient, including full legal names and addresses

2. Background: Context of the agreement, relationship between parties, and purpose of the equity grant

3. Definitions: Definitions of key terms used throughout the agreement, including vesting-specific terminology

4. Grant of Equity: Details of the equity being granted, including number of shares, class, and nominal value

5. Vesting Schedule: Specific terms of the vesting arrangement, including time periods, milestones, and conditions

6. Vesting Acceleration: Circumstances triggering accelerated vesting, such as change of control or termination without cause

7. Restrictions on Transfer: Limitations on selling or transferring vested and unvested shares

8. Company's Right of Repurchase: Terms under which the company can repurchase unvested or vested shares

9. Taxation: Tax obligations and responsibilities of both parties under Pakistani tax laws

10. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority

11. Confidentiality: Obligations regarding confidential information accessed as a shareholder

12. Termination: Circumstances and procedures for terminating the agreement

13. Governing Law and Jurisdiction: Specification of Pakistani law as governing law and relevant jurisdiction

14. General Provisions: Standard boilerplate clauses including notices, amendments, and severability