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Earned Equity Agreement
"I need an Earned Equity Agreement for my UK-based fintech startup to grant our new CTO 5% equity vesting over 4 years, with a one-year cliff period starting from March 2025."
1. Parties: Identification of the company and the equity recipient
2. Background: Context of the agreement and relationship between parties
3. Definitions: Key terms used throughout the agreement
4. Grant of Equity: Details of equity being granted and vesting conditions
5. Vesting Schedule: Timeline and conditions for equity vesting
6. Rights and Restrictions: Shareholder rights and any restrictions on shares
7. Termination Provisions: Consequences of employment termination on equity
1. Tag-Along Rights: Rights for minority shareholders to join in the sale of shares when a majority shareholder sells their stake
2. Drag-Along Rights: Rights allowing majority shareholders to force minority shareholders to join in the sale of shares
3. Good/Bad Leaver Provisions: Specific terms defining treatment of equity based on circumstances of employment termination
1. Schedule 1 - Vesting Schedule: Detailed breakdown of vesting timeline and milestones
2. Schedule 2 - Share Rights: Detailed description of share class rights and restrictions
3. Schedule 3 - Valuation Methodology: Agreed method for valuing shares for various purposes under the agreement
4. Schedule 4 - Tax Elections: Required tax forms and elections to be made by the parties
Authors
Articles of Association
Bad Leaver
Board
Business Day
Change of Control
Company
Completion
Confidential Information
Directors
Earn-Out Period
Effective Date
Equity Interest
Fair Market Value
Good Leaver
Grant Date
Group
IPO
Liquidation Event
Milestone(s)
Ordinary Shares
Parties
Performance Conditions
Qualifying Service
Recipient
Restricted Period
Service Agreement
Share Capital
Shareholders' Agreement
Shares
Subsidiary
Tax
Termination Date
Transfer
Unvested Shares
Valuation
Vested Shares
Vesting Commencement Date
Vesting Period
Vesting Schedule
Grant of Equity
Vesting Conditions
Performance Milestones
Share Rights and Restrictions
Termination Provisions
Good/Bad Leaver Terms
Transfer Restrictions
Tag-Along Rights
Drag-Along Rights
Confidentiality
Non-Competition
Non-Solicitation
Tax Obligations
Company Representations
Recipient Representations
Share Valuation
Acceleration Events
Exit Provisions
Board Approval
Shareholder Rights
Information Rights
Voting Rights
Dividend Rights
Dispute Resolution
Governing Law
Assignment
Entire Agreement
Severability
Notices
Amendment Provisions
Further Assurance
Costs and Expenses
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