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Vested Equity Agreement Template for Australia

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Key Requirements PROMPT example:

Vested Equity Agreement

"Need a Vested Equity Agreement for a senior software developer being granted 2% equity stake in our Australian tech startup, with a 4-year vesting period starting March 2025 and a one-year cliff period."

Document background
The Vested Equity Agreement is a fundamental document used in Australian business contexts when companies wish to grant equity interests that vest over time to employees, contractors, or other stakeholders. This arrangement is particularly common in startup environments and growing companies as a means of attracting and retaining talent while aligning interests with company growth. The document must comply with Australian corporate law, particularly the Corporations Act 2001 (Cth) and relevant state legislation, while addressing tax implications under Australian tax law. It typically includes detailed vesting schedules, conditions for acceleration, provisions for termination, and specific requirements for exercising equity rights. The agreement serves as a crucial tool for implementing employee incentive schemes and managing company ownership structures in compliance with Australian regulatory requirements.
Suggested Sections

1. Parties: Identifies and defines the parties to the agreement - typically the company and the equity recipient

2. Background: Explains the context of the agreement, including the recipient's relationship with the company and the purpose of the equity grant

3. Definitions: Defines key terms used throughout the agreement

4. Grant of Equity: Details the type and amount of equity being granted

5. Vesting Schedule: Specifies the vesting period, milestones, and conditions for equity to vest

6. Exercise Rights: Outlines when and how vested equity can be exercised or claimed

7. Restrictions on Transfer: Details limitations on transferring or selling the equity

8. Termination Provisions: Explains what happens to vested and unvested equity upon various types of termination

9. Tax Obligations: Addresses tax implications and responsibilities

10. Confidentiality: Protects confidential information related to the equity arrangement

11. General Provisions: Standard contractual terms including governing law, amendments, and notices

Optional Sections

1. Accelerated Vesting: Provisions for circumstances that trigger accelerated vesting, such as change of control

2. Clawback Provisions: Conditions under which the company can reclaim vested equity

3. Board Approval Requirements: Specific requirements for board approval of transfers or exercises

4. Tag-Along Rights: Rights of the equity holder to join in sales by major shareholders

5. Drag-Along Rights: Company's right to force equity holder to join in a sale

6. Bad Leaver Provisions: Additional consequences for termination due to misconduct

7. Shareholders Agreement Compliance: Special provisions linking to existing shareholders agreement

8. Non-Competition Obligations: Restrictions on competing activities linked to equity holding

Suggested Schedules

1. Schedule 1 - Share Details: Detailed information about the shares or options being granted, including class and rights

2. Schedule 2 - Vesting Schedule: Detailed timetable of vesting dates and percentages or milestones

3. Schedule 3 - Deed of Accession: Form of deed to be signed to join existing shareholders agreement

4. Schedule 4 - Company Constitution Extract: Relevant sections of the company constitution affecting the equity

5. Schedule 5 - Valuation Methodology: Agreed method for valuing shares for various purposes

6. Appendix A - Exercise Notice: Template form for exercising vested equity rights

7. Appendix B - Transfer Notice: Template form for transferring equity

8. Appendix C - Tax Declaration: Required tax forms and declarations

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses








































Relevant Industries

Technology

Financial Services

Professional Services

Healthcare

Manufacturing

Retail

Education

Media and Entertainment

Real Estate

Software Development

Consulting

Biotechnology

E-commerce

Clean Energy

Mining

Relevant Teams

Legal

Human Resources

Finance

Executive Leadership

Board of Directors

Corporate Governance

Compensation

People Operations

Treasury

Talent Acquisition

Relevant Roles

CEO

CFO

COO

CTO

Head of Human Resources

General Counsel

Legal Counsel

HR Director

Finance Director

Company Secretary

Senior Executive

Department Head

Startup Founder

Board Member

Executive Director

Managing Director

Vice President

Senior Manager

Technical Lead

Project Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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