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Co Founder Vesting Agreement

Co Founder Vesting Agreement Template for New Zealand

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Key Requirements PROMPT example:

Co Founder Vesting Agreement

"I need a Co-Founder Vesting Agreement for my New Zealand tech startup with three co-founders, implementing a 4-year vesting schedule starting March 2025, with a one-year cliff and accelerated vesting provisions in case of company sale."

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Document background
The Co-Founder Vesting Agreement is a critical document used when establishing or formalizing equity arrangements between multiple founders in a New Zealand company. It is particularly relevant during company formation or early stages when founders need to ensure long-term commitment and align interests. The agreement details how founders will earn their equity over time, protecting the company from early departures while ensuring founders are rewarded for their continued contribution. Operating under New Zealand law, particularly the Companies Act 1993 and Financial Markets Conduct Act 2013, this agreement includes essential provisions for share vesting schedules, conditions for acceleration, departure scenarios, and share transfer restrictions. It's commonly implemented alongside other founding documents and serves as a fundamental instrument for establishing clear equity expectations and protecting all parties' interests.
Suggested Sections

1. Parties: Identifies the co-founders and the company as parties to the agreement

2. Background: Explains the context of the agreement, including the company's formation and the co-founders' roles

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Share Allocation: Details the initial share allocation among co-founders

5. Vesting Schedule: Specifies the vesting period, milestones, and how shares vest over time

6. Vesting Mechanics: Describes the technical process of how shares vest and transfer

7. Founder Commitments: Outlines the obligations and commitments of each founder during the vesting period

8. Good Leaver/Bad Leaver Provisions: Defines circumstances for founder departure and corresponding share treatment

9. Share Rights and Restrictions: Details voting rights, dividend rights, and transfer restrictions on unvested shares

10. Confidentiality: Establishes confidentiality obligations regarding company information

11. Intellectual Property: Addresses IP ownership and assignment during the vesting period

12. Dispute Resolution: Outlines the process for resolving disputes between parties

13. General Provisions: Contains standard legal provisions including governing law, notices, and amendments

Optional Sections

1. Acceleration Provisions: Include when parties want specific events (like company sale) to trigger accelerated vesting

2. Board Representation: Include when founders want to specify board rights tied to vesting

3. Non-Competition and Non-Solicitation: Include when founders agree to restrictions on competing activities

4. Tag-Along/Drag-Along Rights: Include when founders want to establish share sale rights for future transactions

5. Reverse Vesting: Include when founders start with full allocation subject to company repurchase rights

6. Founder Employment Terms: Include when vesting is tied to employment conditions

7. Share Valuation Mechanism: Include when parties want to specify how shares will be valued for various transactions

Suggested Schedules

1. Schedule 1: Vesting Schedule: Detailed timeline and milestones for share vesting

2. Schedule 2: Share Allocation Table: Detailed breakdown of share numbers and percentages per founder

3. Schedule 3: Company Information: Key company details including registration number and share capital

4. Schedule 4: Deed of Accession: Template for additional parties to join the agreement

5. Appendix A: Share Transfer Form: Standard form for executing share transfers

6. Appendix B: Deed of Adherence: Template for binding new shareholders to the agreement

7. Appendix C: Resignation Letter Template: Standard form for founder resignation

8. Appendix D: IP Assignment Form: Template for assigning intellectual property rights

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
Share Allocation
Vesting Schedule
Vesting Conditions
Acceleration Rights
Transfer Restrictions
Voting Rights
Dividend Rights
Tag-Along Rights
Drag-Along Rights
Good Leaver Provisions
Bad Leaver Provisions
Share Valuation
Founder Commitments
Non-Competition
Non-Solicitation
Confidentiality
Intellectual Property
Board Representation
Information Rights
Pre-emptive Rights
Share Transfer Mechanics
Termination
Dispute Resolution
Representations and Warranties
Amendment and Waiver
Assignment
Notices
Severability
Entire Agreement
Governing Law
Jurisdiction
Relevant Industries

Technology

Software Development

E-commerce

Financial Technology

Healthcare Technology

Biotechnology

Professional Services

Manufacturing

Retail

Media and Entertainment

Education Technology

Clean Technology

Artificial Intelligence

Telecommunications

Consumer Products

Relevant Teams

Legal

Executive

Board of Directors

Corporate Governance

Finance

Human Resources

Company Secretariat

Compliance

Corporate Strategy

Relevant Roles

Chief Executive Officer

Chief Technology Officer

Chief Financial Officer

Chief Operating Officer

Chief Product Officer

Chief Marketing Officer

Founder

Co-Founder

Managing Director

Company Director

Board Member

Executive Director

Technical Director

Business Development Director

Operations Director

Industries
Companies Act 1993: Primary legislation governing company formation, management, and shareholder rights in New Zealand. Crucial for share issuance, transfer restrictions, and shareholder agreements.
Contract and Commercial Law Act 2017: Provides the legal framework for contract formation and enforcement, essential for the validity and enforceability of the vesting agreement.
Financial Markets Conduct Act 2013: Regulates financial products and securities, including share offerings and restrictions on transfer, relevant for structuring vesting arrangements.
Income Tax Act 2007: Governs tax implications of share transfers and vesting arrangements, including potential tax consequences for founders when shares vest.
Employment Relations Act 2000: May be relevant if founders are also employees, affecting the relationship between employment and share vesting.
Intellectual Property Laws (Patents Act 2013, Copyright Act 1994, Trade Marks Act 2002): Important for protecting company IP and establishing ownership rights during the vesting period.
Fair Trading Act 1986: Ensures fair trading practices and prevents misleading conduct in business relationships, relevant for transparency in vesting arrangements.
Personal Property Securities Act 1999: May be relevant if shares are used as security or if there are provisions regarding secured interests in the company.
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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