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Vested Equity Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Vested Equity Agreement

"I need a Vested Equity Agreement for our Saudi-based technology startup to grant 5% equity to our new CTO, with monthly vesting over 4 years starting January 2025, including a one-year cliff and acceleration provisions in case of company acquisition."

Document background
The Vested Equity Agreement is a crucial document used in Saudi Arabian companies to structure equity-based compensation and ownership rights. It is particularly relevant for businesses seeking to attract and retain key talent by offering ownership stakes that vest over time. The agreement must navigate the specific requirements of Saudi Arabian corporate law, including the Companies Law of 2015, Capital Market Authority regulations, and Sharia compliance considerations. Typically used in both startup environments and established companies, this document outlines the complete framework for equity vesting, including grant terms, vesting schedules, performance conditions, and regulatory compliance requirements. It addresses key aspects such as share transfer restrictions, voting rights, dividend entitlements, and termination scenarios, while ensuring alignment with local legal and religious principles.
Suggested Sections

1. Parties: Identification of the Company, the Equity Recipient, and any other relevant parties

2. Background: Context of the agreement, including company information and purpose of the equity grant

3. Definitions: Key terms used throughout the agreement, including technical and legal definitions

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

5. Vesting Schedule: Specific timeline and conditions for equity vesting, including milestones and dates

6. Vesting Conditions: Performance metrics, continued employment requirements, or other conditions that must be met

7. Rights and Restrictions: Voting rights, dividend rights, and transfer restrictions associated with the equity

8. Termination Provisions: Consequences of employment termination or service discontinuation on vesting

9. Company's Rights and Obligations: Company's commitments, including maintaining necessary authorizations and compliance

10. Recipient's Rights and Obligations: Recipient's commitments, including confidentiality and non-competition obligations

11. Tax Matters: Treatment of tax and Zakat obligations related to the equity grant and vesting

12. Governing Law and Jurisdiction: Confirmation of Saudi law application and dispute resolution mechanisms

13. General Provisions: Standard clauses including amendments, notices, and entire agreement provisions

Optional Sections

1. Shareholder Rights: Additional section for cases where the equity grant includes specific shareholder rights or obligations

2. Board Representation: Required when the equity grant includes rights to board representation or observer status

3. Lock-up Period: Additional restrictions on share transfers for a specified period post-vesting

4. Tag-Along Rights: Include when minority shareholder protections are necessary

5. Drag-Along Rights: Include when majority shareholder rights need to be protected

6. Islamic Finance Compliance: Detailed section on Sharia compliance when required by parties or circumstances

7. Employee Benefits: Additional benefits or rights tied to the equity grant for employee recipients

8. Intellectual Property Rights: Required for recipients involved in technical or creative roles

Suggested Schedules

1. Schedule 1 - Vesting Schedule Details: Detailed breakdown of vesting dates, percentages, and milestones

2. Schedule 2 - Share Certificate: Form of share certificate or evidence of ownership

3. Schedule 3 - Company Information: Details of company structure, capitalization, and existing shareholders

4. Schedule 4 - Shareholders' Agreement Terms: Key terms from the existing shareholders' agreement affecting the grant

5. Schedule 5 - Performance Metrics: Detailed criteria for performance-based vesting conditions

6. Schedule 6 - Required Notices and Forms: Templates for necessary notifications and regulatory filings

7. Appendix A - Board and Shareholder Resolutions: Copies of corporate approvals for the equity grant

8. Appendix B - Regulatory Approvals: Copies of any required regulatory or governmental approvals

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions













































Clauses































Relevant Industries

Technology

Professional Services

Financial Services

Healthcare

E-commerce

Manufacturing

Consulting

Real Estate Development

Education Technology

Telecommunications

Renewable Energy

Digital Media

Biotechnology

Software Development

Relevant Teams

Legal

Human Resources

Finance

Executive Leadership

Corporate Governance

Compliance

Administrative

Company Secretariat

Board of Directors

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Technology Officer

Senior Software Engineer

Business Development Director

Legal Counsel

Human Resources Director

Company Secretary

Chief Operating Officer

Product Manager

Senior Consultant

Department Head

Technical Lead

Research Director

Regional Manager

Vice President

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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