This article describes the restricted equity purchase agreement document and how you can access it on Savvi.
Signatures Required:
Equity Recipient
Company Signatory
Purpose:
A restricted equity purchase agreement is a contract made between the recipient of equity from the Company (such as the Company's founders) and the Company, outlining the number of shares being purchased by the equityholder. It also includes other important terms such as the initial purchase price of the equity, and the vesting schedule by which such equity will vest. It may also contain other provisions such as acceleration terms, transfer restrictions, and IP assignment language.
A "restricted" equity/stock purchase agreement implies that the equity being sold pursuant thereto is subject to a vesting schedule (the "restrictions" are the vesting restrictions). Vesting is an important term because it helps to keep a founder from prematurely leaving the company and taking a chunk of equity with them, and motivates them to stay committed to the company. Investors will often require that founders and other employees have vesting restrictions on their equity.
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