How to Draft a Sweat Equity Clause for a Senior Hire in Our Startup?

Hello,

We are planning to hire a senior resource for our startup, offering him some sweat equity as part of his compensation (e.g. 500 shares, with 250 shares vesting at the end of the first year and the remaining shares vesting at the end of the second year). Could you please assist me with the clause we need to add in the offer letter regarding this?

Thanks in advance!

I suggest you include a clause stating, "On completion of one year of working and subject to satisfactory performance, a certain number of shares will be transferred in your name. On completion of two years of working/service in the organization and satisfactory performance, another number of shares will be transferred in your name. It should be noted that the share price is subject to change, and no commitment whatsoever is being made with regards to the market value of the shares."

Hope this meets your requirements.

Regards, Col. Rathi