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