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Earned Equity Agreement
"I need an Earned Equity Agreement for my UK-based fintech startup to grant our new CTO 5% equity vesting over 4 years, with a one-year cliff period starting from March 2025."
1. Parties: Identification of the company and the equity recipient
2. Background: Context of the agreement and relationship between parties
3. Definitions: Key terms used throughout the agreement
4. Grant of Equity: Details of equity being granted and vesting conditions
5. Vesting Schedule: Timeline and conditions for equity vesting
6. Rights and Restrictions: Shareholder rights and any restrictions on shares
7. Termination Provisions: Consequences of employment termination on equity
1. Tag-Along Rights: Rights for minority shareholders to join in the sale of shares when a majority shareholder sells their stake
2. Drag-Along Rights: Rights allowing majority shareholders to force minority shareholders to join in the sale of shares
3. Good/Bad Leaver Provisions: Specific terms defining treatment of equity based on circumstances of employment termination
1. Schedule 1 - Vesting Schedule: Detailed breakdown of vesting timeline and milestones
2. Schedule 2 - Share Rights: Detailed description of share class rights and restrictions
3. Schedule 3 - Valuation Methodology: Agreed method for valuing shares for various purposes under the agreement
4. Schedule 4 - Tax Elections: Required tax forms and elections to be made by the parties
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