This vesting agreement template has 5 pages and is a MS Word file type listed under our finance & accounting documents.
Sample of our vesting agreement template:
VESTING AGREEMENT This Vesting Agreement (the "Agreement") is effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the "Company"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE] with its head office located at: [YOUR COMPLETE ADDRESS] AND: [SECOND PARTY NAME] (the "Shareholder"), an individual residing at: [COMPLETE ADDRESS] WHEREAS, the Shareholder holds [NUMBER OF SHARES] Shares of the common Stock of the Company (the "Shareholder's Shares"); WHEREAS, the Company intends to sell Shares of preferred Stock to outside investors, and such investors require as a condition to such transaction that the Parties accept certain restrictions with respect to the Shares as set forth herein; NOW THEREFORE, in consideration of the premises and of the mutual agreements contained in this Agreement, the Parties hereto agree as follows: UNVESTED SHARE REPURCHASE OPTION Upon the termination of the Shareholder's service to the Company as an employee or consultant, for any reason, or no reason, with or without Cause, including Involuntary Termination, death or temporary or permanent disability, the Company shall have a right (but not an obligation) (the "Unvested Share Repurchase Option") to repurchase any Shares of Stock to the extent they have not vested under the terms set forth below. VESTING OF UNVESTED SHARES Fifty percent (50%) of the Shareholder's Shares initially shall be Unvested Shares. 1/48 of the initial number of Unvested Shares will vest on [DATE] and 1/48 of the initial number of Unvested Shares shall vest on the [NUMBER] day of each month thereafter subject to the Shareholder's continuous service to the Company as an employee or consultant providing services at least three (3) days per week, and 1/96 of the initial number of Unvested Shares shall vest on the [NUMBER] day of each month thereafter subject to the Shareholder's continuous service to the Company as an employee or consultant providing services at least one (1) day per week but less than three (3) days per week. Acceleration of Vesting: The other provisions of this Section 2 notwithstanding, if the Shareholder's service as an employee or consultant with the Company terminates because of an Involuntary Termination or termination without Cause at any time within eighteen (18) months after a Change of Control, and the Shareholder signs a general release of claims against the Company, the Unvested Shares shall become fully vested upon such termination. For purposes of this Agreement: "Change of Control" shall mean (i) a merger or consolidation or the sale, or exchange by the shareholders of the Company of all or substantially all of the capital Stock of the Company, where the shareholders of the Company immediately before such transaction do not obtain or retain, directly or indirectly, at least a majority of the beneficial interest in the voting Stock or other voting equity of the surviving or acquiring corporation or other surviving or acquiring entity, in substantially the same proportion as before such transaction, or (ii) the sale or exchange of all or substantially all of the Company's assets, where the shareholders of the Company immediately before such sale or exchange do not obtain or retain, directly or indirectly, at least a majority of the beneficial interest in the voting Stock or other voting equity of the corporation or other entity acquiring the Company's assets, in substantially the same proportion as before such transaction; "Cause" shall mean (i) the Shareholder's violation of any applicable law or regulation with respect to the Company's business; or (ii) the Shareholder's commission of a felony or commission of a crime involving moral turpitude; or (iii) conduct by the Shareholder involving wilful misconduct, fraud, gross negligence, or embezzlement with respect to the Company; or (iv) a good faith finding by the Board of Directors of the Company of repeated and wilful failure of the Shareholder after written notice to perform his assigned duties for the Company, gross negligence or misconduct (where such gross negligence or misconduct is materially adverse to the Company); and "Involuntary Termination" shall mean the Shareholder's termination of service with the Company within thirty (30) days following the occurrence of any of the following without the Shareholder's consent: (i) a material reduction or change in job duties, reporting relationships, responsibilities and requirements inconsistent with the Shareholder's position with the Company and prior duties, reporting relationships, responsibilities and requirements prior to the Change in Control, provided that neither a mere change in title alone nor reassignment following a Change of Control to a position that is substantially similar to the position held prior to the Change of Control in terms of job duties, responsibilities or requirements shall constitute a material reduction in job responsibilities; (ii) a reduction in the Shareholder's then-current base salary by at least 20%, provided that an across-the-board reduction in the salary level of all other senior executives by the same percentage amount as part of a general salary level reduction shall not constitute such a salary reduction; or (iii) the Shareholder's refusal to relocate the principal place for performance of Company duties to a location more than thirty (30) miles from the Company's then current location at the time of the Change in Control. Exercise of Unvested Share Repurchase Option: The Company may exercise the Unvested Share Repurchase Option by written notice to the Shareholder or the Shareholder's legal representative within sixty (60) days after such termination. Payment for Stock and Return of Stock: Payment by the Company to the Shareholder or the Shareholder's legal representative shall be made in cash or by check within sixty (60) days after the date of the mailing of the written notice of exercise of the Unvested Share Repurchase Option. For purposes of the foregoing, cancellation of any promissory note of the Shareholder to the Company shall be treated as payment to the Shareholder in cash to the extent of the unpaid principal and any accrued interest cancelled. The purchase price per Share for the Shares being repurchased by the Company shall be equal to the original purchase price for such Shares, as appropriately adjusted for any Stock split, reverse Stock split, recapitalization, or the like
