What is an Equity Compensation Agreement?

An Equity Compensation Agreement is a legal contract that outlines the terms under which an individual (employee, consultant, advisor) receives equity in a company. This can include stock options, Restricted Stock Units (RSUs), or other forms of equity grants.

Why is an Equity Compensation Agreement important, especially for startups?

For startups, equity is a key tool to attract and retain talent when cash compensation might be limited. A formal agreement clarifies the grant details, vesting schedule, exercise price (for options), and other terms, protecting both the company and the recipient.

What are common components of an Equity Compensation Agreement?

Common components include the type of equity granted, number of shares or units, vesting schedule (e.g., time-based or milestone-based), exercise price (for stock options), conditions for forfeiture, and tax implications.

Can this template be used for different types of equity grants?

Yes, our Equity Compensation Agreement template is designed to be adaptable for various common equity grants, such as stock options (ISOs and NSOs) and RSUs. It allows for customization of vesting terms and other specific conditions.

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🏢 Company Information

Company Name *

Company Address *

State of Incorporation

Equity Plan Name

Total Outstanding Shares

Plan Administrator

👤 Recipient Information

Recipient Name *

Recipient Address *

Position/Title

Employee ID

Email Address

Hire Date

📊 Equity Grant Details

Equity Type *

Option Type

Number of Shares/Units *

Exercise Price per Share

Grant Date *

Fair Market Value per Share

⏰ Vesting Schedule

Vesting Type *

Vesting Period

Cliff Period

Vesting Frequency

Vesting Commencement Date *

Performance Criteria

🔄 Exercise and Termination Terms

Exercise Period After Termination

Exercise Method

Termination Events

Change in Control Provisions

💰 Tax and Legal Considerations

83(b) Election

Tax Withholding Method

Transfer Restrictions

Right of First Refusal

📋 Additional Terms and Conditions

Governing Law

Dispute Resolution

Additional Terms and Conditions

⚠️ Legal Notice: This agreement template is for informational purposes only. Equity compensation has significant legal and tax implications. Please consult with qualified legal and tax professionals before finalizing any equity compensation arrangements.

Equity Compensation Agreement

Agreement Date:

Company

[Company Name]

[Company Address]

State of Incorporation: [State]

Recipient

[Recipient Name]

[Recipient Address]

Position: [Position]

Grant Details

Equity Type	[Equity Type]
Number of Shares/Units	[Shares]
Exercise Price	[Price]
Grant Date	[Grant Date]
Fair Market Value	[FMV]

Vesting Schedule

Vesting Type: [Vesting Type]

Vesting Period: [Period]

Cliff Period: [Cliff]

Vesting Frequency: [Frequency]

Commencement Date: [Date]

Key Terms and Conditions

Exercise Period: [Period] after termination
Exercise Method: [Method]
Tax Election: [Election]
Transfer Restrictions: [Restrictions]
Governing Law: [Law]

Company

Name: ________________________

Title: ________________________

Date: ________________________

Recipient

[Recipient Name]

Date: ________________________