Vested Equity Agreement Template for India

The Vested Equity Agreement is a crucial document used when companies want to grant equity to employees, consultants, or advisors while ensuring their long-term commitment through a vesting schedule. This agreement type is particularly common in Indian startups and growing companies that want to attract and retain talent by offering ownership stakes. The document must comply with Indian corporate laws, including the Companies Act 2013 and SEBI regulations, while detailing vesting periods, exercise conditions, and share transfer restrictions. It serves as a comprehensive framework for equity compensation, protecting both the company's interests in maintaining long-term engagement and the recipient's rights to earned equity.

1. Parties: Identification of the company and the equity recipient (employee/consultant/advisor)

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

3. Definitions: Key terms used throughout the agreement including Vesting Period, Cliff Period, Shares, Exercise Price, etc.

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

5. Vesting Schedule: Specific timeline and conditions for vesting, including cliff period and subsequent vesting increments

6. Exercise Terms: Conditions and process for exercising vested equity, including exercise price and payment terms

7. Termination Provisions: Impact of various types of termination on vested and unvested equity

8. Transfer Restrictions: Limitations on transfer of shares and right of first refusal provisions

9. Representations and Warranties: Standard declarations by both parties regarding authority, compliance, and understanding

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

11. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

12. Execution: Signature blocks and execution formalities