Growth shares term sheet
Growth shares term sheet

The following Share Incentives precedent provides comprehensive and up to date legal information covering:

  • Growth shares term sheet

[INSERT NAME OF COMPANY]

growth SHARES

This term sheet summarises a proposal to incentivise key employees of [insert name of company] (referred to below as the ‘Company’) by allowing those employees to subscribe for a new class of shares in the Company (Growth Shares). All issues raised in this document are for discussion purposes and each should be considered carefully before implementation.

    1. 1

      Overview

      Under the terms of the proposal, participants will subscribe directly for Growth Shares.

      The Growth Shares will have rights which are designed to allow employees to participate only in post-acquisition increases in the value of the Company in the event of an IPO or liquidation, or where more than [Insert percentage]% of the Company's ordinary shares are sold, not including the Growth Shares (in each case, referred to in this note as an ‘Exit’).

      When an Exit occurs, the Growth Shares will carry an entitlement to share in part of the Exit consideration, provided that the purchase price paid to shareholders of the Company is greater than a pre-determined threshold amount (the Threshold Price). The holders of Growth Shares will receive only a pro rata portion of the consideration above this Threshold Price, sharing it with the Company's other shareholders.

      Growth Shares will be non-transferrable except in the event that an Exit occurs, and they will carry no entitlement to dividends. As a result of

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