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Vested Equity Agreement Template for Singapore

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Key Requirements PROMPT example:

Vested Equity Agreement

"I need a Vested Equity Agreement for a senior software engineer joining our Singapore-based fintech startup in January 2025, with a 4-year vesting schedule and 1-year cliff, covering 10,000 shares representing 1% of the company."

What is a Vested Equity Agreement?

The Vested Equity Agreement is commonly used in Singapore's business landscape when companies wish to incentivize and retain key personnel through equity ownership. This document type gained prominence with the growth of Singapore's startup ecosystem and is particularly relevant for companies seeking to align employee interests with long-term business success. The agreement details vesting schedules, typically over 3-4 years, often with a one-year cliff period. It must comply with Singapore's corporate and securities laws, including the Companies Act and relevant MAS guidelines. The agreement serves as a comprehensive framework for equity distribution while protecting both company and recipient interests.

What sections should be included in a Vested Equity Agreement?

1. Parties: Identification of the company and the equity recipient

2. Background: Context of the equity grant and relationship between parties

3. Definitions: Key terms used throughout the agreement including vesting periods, share classes, and triggers

4. Grant of Equity: Details of shares/options being granted including number, class, and nominal value

5. Vesting Schedule: Timeline and conditions for equity vesting including cliff period and vesting increments

6. Restrictions on Transfer: Limitations on selling or transferring shares and any lock-up periods

7. Termination Provisions: Impact of employment termination on vesting and treatment of vested/unvested shares

What sections are optional to include in a Vested Equity Agreement?

1. Acceleration Provisions: Conditions for accelerated vesting, used in case of change of control or IPO events

2. Shareholder Rights: Voting rights and dividend entitlements, included for immediate share grants

3. Tax Provisions: Specific tax handling agreements, included for international recipients or complex tax situations

4. Non-Competition Clause: Restrictions on competing activities, typically used for senior executives or key employees

What schedules should be included in a Vested Equity Agreement?

1. Schedule 1 - Vesting Schedule: Detailed timeline of vesting milestones and conditions

2. Schedule 2 - Share Certificate Template: Form of share certificate to be issued upon vesting

3. Schedule 3 - Company Constitution Excerpt: Relevant sections of company constitution affecting share rights and restrictions

4. Schedule 4 - Tax Declaration Forms: Required tax forms and declarations for equity recipients

Authors

Alex Denne

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

Relevant legal definitions



































Clauses






























Industries

Companies Act (Cap. 50): Primary legislation governing company structures, share issuance, shareholders' rights and obligations, and corporate governance requirements in Singapore.

Securities and Futures Act (Cap. 289): Regulatory framework for securities offerings, including disclosure requirements and restrictions on share transfers.

Income Tax Act: Legislative framework covering tax implications of equity compensation, treatment of vested shares as income, and capital gains considerations.

Employment Act (Cap. 91): Legislation governing employment relationships, particularly relevant when equity agreements are part of employment compensation packages.

MAS Guidelines: Regulatory guidelines from the Monetary Authority of Singapore covering compliance requirements for share issuance and financial reporting obligations.

Corporate Governance Code: Framework establishing best practices for corporate governance, including disclosure requirements and shareholder rights protection.

Company Constitution: Company's foundational document that sets out the basic rules for company operation and share dealings.

Shareholders' Agreement: Existing agreement between shareholders that may impact or restrict new equity arrangements.

Stock Option Plan Rules: If applicable, company-specific rules governing the implementation and administration of stock option plans.

SGX Listing Rules: For listed companies, Singapore Exchange regulations governing equity-related matters and corporate actions.

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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