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: $530.00
- Lawyers available: 65 employment lawyers
- Clients helped: 44 recent equity grant agreement projects
- Avg lawyer rating: 5.0 (9 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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Meet some of our Equity Grant Agreement Lawyers
Paul M.
Transactional attorney and corporate in house counsel for 15 years. Draft all types of contracts and employment agreements.
"Paul is a true professional and I would absolutely recommend him. He was communicative, expeditious with his updates, and ultimately helped me secure a favorable FDD after several rounds of negotiation."
Morgan S.
Corporate Attorney that represents startups, businesses, investors, VC/PE doing business throughout the country. Representing in a range of matters from formation to regulatory compliance to financings to exit. Have a practice that represents both domestic and foreign startups, businesses, and entrepreneurs. Along with VC, Private Equity, and investors.
"Morgan delivered far beyond the price point. He didn't just review our investor package — he caught gaps two other reviewers missed (including a top-tier venture firm we benchmarked him against), rebuilt the custom documents to professional standard, and added missing closing mechanics we didn't even know we needed: the 83(b) election, escrow instructions, stock assignment. He pushed back on his own client when the documents said otherwise — that's the lawyer you want. §144 analysis citing the 2025 Delaware reform, triple anti-broker-dealer protections, a related-party ARR cap he invented on his own — depth you'd expect at five times the fee, closed out with a proper written memo on firm letterhead. The timeline ran a bit longer than planned in places, but the result was more than worth it: every item closed, every question answered, the whole package consistent and ready to sign. Very happy overall — would hire again, and our next project is already queued."
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.
"Mike did strong, thoughtful work on our contractor IP assignment and was clear about the tradeoffs on worker classification. Revisions were handled well and all within the flat fee. Only knock is responsiveness, there were a few multi-day gaps and I had to follow up to keep things moving. Would still recommend for the quality of the drafting."
Scott S.
I have over 25 years' experience representing individual and company clients, large and small, in transactions such as mergers and acquisitions, private offerings of securities, commercial loans and commercial endeavors (supply contracts, manufacturing agreements, joint ventures, intellectual property licenses, etc.). My particular specialty is in complex and novel drafting.
"Scott is great to work with. Great attention to to detail and he is committed to help you achieve your vision. Will hopefully be using him again!"
Faryal A.
Ms. Ayub is an attorney licensed to practice in Texas. Before moving to the US, she has a number of years of experience in contract review, analysis and drafting. Ms. Ayub is available to help you with your legal problems, as well as filling LLC and other business entity formation documents. To know more about her practice, please visit https://ayublawfirmpllc.com/.
"Faryal did an excellent job redlining an agreement. Attention to details and clarity of her explanations were really appreciated!"
Diana M.
Diana is a registered patent attorney and licensed to practice law in Florida and in federal courts in Florida and in Texas. For nearly a decade, Diana has been known as the go-to brand builder, business protector, and rights negotiator. Diana works with individual inventors, startups, and small to medium-sized closely held business entities to build, protect, and leverage a robust intellectual property portfolio comprising patents, trademarks, copyrights, trade dress, and trade secrets.
"Diana was professional, thorough and a delight to work with. I will be a repeat customer. --Tom"
October 1, 2020
Brandon L.
Brandon is a Texas Super Lawyer®, meaning he is among the top 2.5% of attorneys in his state. He has designed his practice to provide a unique ecosystem of legal support services to business and entrepreneurs, derived from his background as a federal district law clerk, published biochemist, and industry lecturer. Brandon is fluent in Spanish, an Eagle Scout, and actively involved with the youth in his community. He loves advocating for his clients and thinks he may never choose to retire.
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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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Incentive Equity Units Agreement
"Michael offered great feedback on an incentive equity units agreement. He was very helpful and responsive. Highly recommend!"
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"Dolan delivered a comprehensive review that exceeded my expectations! Quick and professional."
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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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Review of Equity Agreement (Class P Units) given to me by PE firm who owns the company I work for.
"Brian was an exceptional counsel on my project. If I ever need additional assistance, I most certainly will be reaching out to him. He was very clear, collaborative, knowledgeable, and personable. I highly recommend! Exceptional service!"
ContractsCounsel User
Capital Stock
Equity Grant Agreement
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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Location: Illinois
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Service: Contract Review
Doc Type: Equity Grant Agreement
Page Count: 94
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Bid Range: $550 - $1,850
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