Document background
The Equity Compensation Agreement serves as a fundamental instrument for companies operating in Canada to attract, retain, and motivate key personnel by offering them ownership interests in the organization. This document is typically used when a company wants to grant equity-based compensation as part of its overall compensation strategy, whether for new hires, existing employees, or as part of a broader incentive program. The agreement must comply with Canadian securities regulations, including provincial securities laws, federal and provincial tax legislation, and corporate law requirements. It outlines crucial details such as vesting schedules, exercise prices, termination provisions, and transfer restrictions. The document is particularly important for start-ups, growth-stage companies, and established corporations that use equity compensation as a key component of their compensation packages.
