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Employment Documents

Equity Compensation Agreement

Generate a free equity compensation agreement for startups. Covers stock options, vesting schedules, cliff periods, and exercise terms.

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Frequently Asked Questions

What is an equity compensation agreement?

An equity compensation agreement grants employees the right to purchase or receive company stock as part of their compensation, typically subject to a vesting schedule.

What is a vesting schedule?

A vesting schedule defines when an employee earns the right to their equity. A typical schedule is 4 years with a 1-year cliff, meaning 25% vests after year 1 and the remainder monthly over 3 years.

What is the difference between stock options and restricted stock units (RSUs)?

Stock options give employees the right to buy shares at a fixed price. RSUs are grants of actual shares that vest over time, with no purchase required.

What happens to equity when an employee leaves?

Vested options can typically be exercised within 90 days of leaving. Unvested equity is forfeited. The agreement should specify all post-termination terms.

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