Equity Grant Agreement: Definition, Terms, Example
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Quick Facts — Equity Grant Agreement Lawyers
- Avg cost to draft an Equity Grant Agreement: $1040.00
- Avg cost to review an Equity Grant Agreement: $520.00
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- Clients helped: 41 recent equity grant agreement projects
- Avg lawyer rating: 5.0 (8 reviews)
What is an Equity Grant Agreement?
An equity grant agreement is a legal document that defines the terms and conditions of an employee's company ownership. It is essential to have this contract drawn up before hiring new employees, as it can help protect both the company and its business partner(s) if there are any disputes or disagreements down the road.
This type of contract should be implemented before hiring any new employees. It will ensure all parties involved understand their rights if there ever comes a time when they want to leave or disagree with something related to work ethics or job duties.
Common Sections in Equity Grant Agreements
Below is a list of common sections included in Equity Grant Agreements. These sections are linked to the below sample agreement for you to explore.
Equity Grant Agreement Sample
(a) | The Units are or will be acquired for investment for an indefinite period for Grantee's own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and Grantee has no present intention of selling, granting participation in, or otherwise distributing the same. By executing this Agreement, Grantee further represents that he does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer, or grant participations, to such person or to any third person, with respect to any of the Units. |
(b) | Grantee understands that the Units have not been registered under the Securities Act of 1933, as amended (the "Act"), on the grounds that the transactions provided for in this Agreement are exempt from the registration requirements of the Act, and that the Company's reliance on such exemption is predicated on Grantee's representations set forth herein. |
(c) | Grantee acknowledges that he understands that any sale of the securities that might be made by Grantee in reliance upon Rule 144 under the Act may be made only in limited amounts in accordance with the terms and conditions of that rule and that Grantee may not be able to sell the Units at the time or in the amount Grantee so desires. Grantee is familiar with Rule 144 and understands that the Units constitute "restricted securities" within the meaning of that Rule. |
(d) | In connection with the investment representations made herein Grantee represents that he is able to fend for himself in the transactions contemplated by this Agreement, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of his investment, has the ability to bear the economic risks of his investment and has been furnished with and has had access to such information as he has requested and deem appropriate to his investment decision. |
(e) | Grantee agrees that in no event will he make a disposition of any of the Units unless and until (a) he has notified the Company of the proposed disposition and has furnished the Company with a statement of the circumstances surrounding the proposed disposition, and (b) he has furnished the Company with an opinion of counsel satisfactory to the Company to the effect that (i) such disposition will not require registration of such Units under the Act, or (ii) that appropriate action necessary for compliance with the Act has been taken, or (c) the Company shall have waived, expressly and in writing, its rights under clauses (a) and (b) of this subparagraph. In addition, prior to any disposition of any of the Units the Company may require the transferee or assignee to provide investment representations in writing and in a form acceptable to the Company. |
(f) | The Company shall not be required (i) to transfer on its books any Units of the Company which shall have been sold or transferred in violation of any of the provisions set forth in this Agreement, or (ii) to treat as owner of such Units or to accord the right to vote as such owner or to pay dividends to any transferee to whom such Units shall have been so transferred. |
Reference:
Security Exchange Commission - Edgar Database, EX-10.1 2 a101-equitygrantagreement.htm, Viewed January 7, 2022, View Source on SEC.
Who Helps With Equity Grant Agreements?
Lawyers with backgrounds working on equity grant agreements work with clients to help. Do you need help with an equity grant agreement?
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Tabetha H.
I am a startup veteran with a demonstrated history of execution with companies from formation through growth stage and acquisition. A collaborative and data-driven manager, I love to build and lead successful teams, and enjoy working full-stack across all aspects of the business.
"Tabetha provided feedback on a legal document in a timely and thorough manner. I plan to use her services going forward."
Heather B.
Heather B.
Delivering proactive and strategic guidance to health and fitness professionals and entities as they scale.
"Heather provided an excellent review of this document. She had great communication and was prompt with her work. She did an excellent review and found multiple areas to strengthen this document. Heather is fantastic!"
Michael S.
I began my career at "big law" firms, worked in-house for 14 years, and now have my own practice, providing big law quality at small firm rates. My practice focuses on strategic and commercial transactions, including M&A, preferred stock and common stock offerings, asset purchases and sales, joint ventures and strategic partnerships, stock option plans, master services agreements and SOWs, software development and license agreements, SaaS agreements, NDAs, employment and consulting agreements. I also manage corporate governance, advise boards and executives, and act as outside general counsel. I represent clients across the country and around the world.
"Completed most of the work with majority of the answers correct!"
Emmanuel A.
Results-driven young lawyer with over 2 years of combined legal experience. Adept at legal research, contract drafting, reviewing policies, client relations, and case management. Possess a J.D. from Elon Law School and am a member of the Minnesota State Bar in good standing.
"Emmanuel is fantastic and very easy to work with! We are so pleased with his quality of work, responsiveness, and attention to detail, and look forward to working with him again on future projects."
June 23, 2024
kumar p.
24 years experience handling Estate planning, corporate transactions, real estate and drafting of contracts, have represented numerous start ups in New York City and have drafted all types of commercial and investment documents for clients.
June 11, 2024
Christopher S.
I've been a solo practitioner since becoming barred, though I've had part-time arrangements with firms and lots of as-needed of-counsel arrangements. I have extensive experience in family law, civil litigation, unlawful detainers, administrative law, with ample experience in probate court, criminal defense and other areas.
June 11, 2024
Merrill B.
I am an experienced commercial and technology transactions attorney who works with cross functional teams on large scale domestic and international commercial and technology B2B agreements for SaaS, software, and various commercial services, supporting sales, sourcing and business owners. This entails counseling, drafting and negotiation of IP, security, privacy, and liability issues, along with SLAs, SOWs, and Orders, giving business oriented advice, along with writing that is clear and concise. I enjoy giving practical business minded advice in a straight forward manner to clients, regardless of whether the issue is legal, business or financial.
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Browse Lawyers NowLawyer Reviews for Equity Grant Agreement Projects
Review a Phantom Share grant award / retention incentive from my employer
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"Ryenne was quick to schedule a call and help me review and answer all questions I had regarding my agreement document. Very knowledgeable and professional. Would love to work with her again!"
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Equity Grant Agreement Review
"Ryenne was amazing to work with. She understood my issues and provided a red-lined agreement which aligned exactly with my goals."
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"Michael offered great feedback on an incentive equity units agreement. He was very helpful and responsive. Highly recommend!"
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"Jane was very helpful. She was quick to respond and gave great feedback."
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California
Can you explain the key terms and considerations in an Equity Grant Agreement?
I recently received an Equity Grant Agreement from my employer, outlining the terms of my stock options as part of my compensation package. While I understand the basics, I would like a lawyer's perspective on the key terms and considerations I should be aware of before signing the agreement. I want to ensure that I fully understand my rights and obligations, any vesting schedules, and potential tax implications associated with the equity grant.
Dolan W.
Hello! My name is Dolan and I'm happy to help. What you want to do first is make sure you understand the type of equity you’re being granted. Is it stock options, RSUs or another form of equity, for example? Stock options often come with the right to purchase shares at a specific price (the "exercise price"), while RSUs usually represent shares given to you outright after meeting certain conditions. Each type of equity has its own rules and tax implications. Also, look at the vesting schedule. This determines when you gain full ownership of the equity. Then, you want to consider the exercise terms. Basically, is there a date you can or must exercise them (turn them from stock to cash). The company may have repurchase agreements or clauses in place giving them right of first refusal before a sale. ' Typically, if there is a merger, other rules apply. I can always draft or review them for you.
Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.
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Profits Interest Proposal Contract
Location: Virginia
Turnaround: Less than a week
Service: Contract Review
Doc Type: Equity Grant Agreement
Page Count: 8
Number of Bids: 2
Bid Range: $475 - $500
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