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Equity Grant Agreement

Equity Grant Agreement Template for Australia

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Key Requirements PROMPT example:

Equity Grant Agreement

"I need an Equity Grant Agreement for our Australian technology startup to issue 50,000 performance rights to our new Chief Technology Officer, with quarterly vesting over 4 years starting March 2025, and including good/bad leaver provisions."

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Document background
The Equity Grant Agreement is a crucial document used in Australian business contexts when a company wishes to provide equity-based compensation to employees, contractors, or other eligible participants. It forms part of the company's equity compensation strategy and must comply with Australian regulatory requirements, including the Corporations Act 2001, tax legislation, and ASIC regulations. The agreement typically details the type and amount of equity granted, vesting conditions, exercise procedures, and various rights and obligations of both parties. It's commonly used for employee retention, alignment of interests with shareholders, and as part of compensation packages, particularly in growth-oriented companies and start-ups. The document must be carefully drafted to ensure compliance with Australian securities laws and tax regulations, particularly the employee share scheme provisions.
Suggested Sections

1. Parties: Identification of the company issuing the equity and the recipient (grantee)

2. Background: Context of the equity grant, including reference to any employee incentive scheme or plan under which the grant is made

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation

4. Grant of Equity: Details of the equity being granted, including type, number of securities, and grant date

5. Vesting Conditions: Timing and conditions for vesting of the equity, including any service or performance requirements

6. Exercise of Rights: Process and conditions for exercising rights (if applicable, such as with options)

7. Restrictions on Dealing: Limitations on transfer, sale, or encumbrance of the granted equity

8. Tax Obligations: Treatment of tax liabilities and responsibilities of parties regarding tax matters

9. Termination of Employment: Impact of employment termination on the equity grant

10. Corporate Events: Treatment of equity in case of corporate restructuring, takeover, or other significant events

11. Confidentiality: Obligations regarding confidential information

12. General Provisions: Standard legal provisions including governing law, notices, and amendments

Optional Sections

1. Performance Conditions: Specific performance metrics and assessment criteria when grant is performance-based

2. International Provisions: Additional terms for participants in other jurisdictions

3. Malus and Clawback: Provisions allowing company to reduce or recoup equity in specific circumstances

4. Market Stand-off Agreement: Restrictions on sale during IPO or other market events

5. Board Discretion: Specific powers reserved for board in administering the grant

6. Relationship with Employment: Clarification that grant does not affect employment terms when recipient is an employee

7. Data Protection: Specific provisions for handling personal data in jurisdictions with strict privacy laws

Suggested Schedules

1. Grant Details: Specific details of grant including number of securities, grant date, and vesting schedule

2. Vesting Schedule: Detailed timeline and conditions for vesting of equity

3. Exercise Notice: Form for exercising rights (if applicable)

4. Tax Summary: Summary of tax implications and treatment in relevant jurisdictions

5. Acceptance Form: Form for formal acceptance of the grant and its terms

6. Restriction Deed: Additional deed covering trading restrictions and disposal limitations

7. Employee Share Scheme Rules: Full rules of the scheme under which grant is made

Authors

Alex Denne

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Clauses
Interpretation
Grant of Securities
Conditions Precedent
Vesting Conditions
Performance Conditions
Exercise Rights
Issue Price
Transfer Restrictions
Holding Lock
Lapse Conditions
Forfeiture
Clawback
Employment Connection
Good Leaver Provisions
Bad Leaver Provisions
Change of Control
Corporate Reorganization
Tag-along Rights
Drag-along Rights
Share Capital Adjustments
Taxation
Confidentiality
Data Protection
Market Disclosure
Trading Restrictions
ASX Compliance
Corporate Governance
Board Powers
Administration
Notices
Assignment
Amendment
Severability
Governing Law
Dispute Resolution
Power of Attorney
Entire Agreement
Relevant Industries

Technology

Financial Services

Professional Services

Healthcare

Biotechnology

Mining and Resources

Manufacturing

Retail

Telecommunications

Media and Entertainment

Start-ups and Scale-ups

Education Technology

Consulting

Relevant Teams

Legal

Human Resources

Finance

Executive Leadership

Company Secretariat

Compensation and Benefits

Talent Acquisition

Corporate Development

Board of Directors

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Technology Officer

Chief Operating Officer

Senior Vice President

Vice President

Director

Senior Manager

Technical Lead

Principal Engineer

Senior Software Engineer

Product Manager

Sales Executive

Business Development Manager

Key Account Manager

Research Scientist

Legal Counsel

Human Resources Director

Financial Controller

Department Head

Industries
Corporations Act 2001 (Cth): Primary legislation governing corporate matters including share issuance, disclosure requirements, and corporate governance obligations
Income Tax Assessment Act 1997 (Cth): Covers taxation treatment of employee share schemes and equity-based compensation, including specific provisions under Division 83A
Fair Work Act 2009 (Cth): Relevant for employment-related aspects of equity grants, ensuring compliance with employment standards and worker rights
ASIC Class Order [CO 14/1000]: Provides relief for employee incentive schemes from certain disclosure, licensing, advertising, and hawking prohibitions
Privacy Act 1988 (Cth): Governs the collection, use, and disclosure of personal information in the equity grant documentation
Foreign Acquisitions and Takeovers Act 1975 (Cth): May be relevant if equity grants involve foreign persons or entities exceeding certain thresholds
Competition and Consumer Act 2010 (Cth): Contains provisions affecting business practices and consumer protections that may impact equity arrangements
ASX Listing Rules: If the company is listed, these rules govern aspects of employee equity schemes and required disclosures
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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