shares vesting incrementally

Share vesting agreements – could compulsory acquisition be a penalty?

In the Australian start-up community, we appear to have adopted most of the terminology from the United States, notwithstanding that the laws in relation to shares, options, loans (Securities) are completely different.   One such “imported term” is the “Vesting Schedule” which is commonly utilised in a Share Vesting Agreement.   The principle is simple enough, individuals contribute to a start-up (Startup) work to build a product or service and are given equity in the business (Company) in exchange for their efforts (Sweat for Equity Deal).  A Share Vesting Agreement will usually contains a Vesting Schedule which describes the rights and obligations of the participants by which their Securities vest, or are cancelled if the person fails to achieve certain milestones.  Whilst Securities is a broader term, generally in the case of start-ups we refer to various classes of shares in a proprietary limited company incorporated under Australian law.

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