Conditional share issuance clause: Copy, customize, and use instantly
Introduction
A conditional share issuance clause defines the circumstances under which the company may issue shares to shareholders, employees, or investors. These conditions may be tied to the achievement of specific milestones, the occurrence of particular events, or performance metrics. This clause ensures that shares are issued only when predefined conditions are met, protecting both the company and its stakeholders.
Below are templates for conditional share issuance clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard conditional share issuance clause
This version includes basic conditions for share issuance.
The [Company] may issue additional shares to the shareholders or employees only upon the fulfillment of the following conditions: [list of conditions]. The issuance will be subject to the approval of the Board of Directors and, where applicable, the shareholders, and will be executed according to the terms outlined in this agreement.
Conditional share issuance clause with performance targets
This version includes performance-based share issuance.
The [Company] will issue shares to eligible employees or stakeholders only if the company achieves specific performance targets, including [list performance targets]. If the targets are met by the end of the fiscal year, shares will be issued in accordance with the company’s equity compensation plan.
Conditional share issuance clause with capital raise requirement
This version includes a capital raise requirement for issuing shares.
The [Company] shall issue additional shares upon successful completion of a capital raise, where the company raises a minimum of [X] dollars through debt or equity financing. The share issuance will be proportional to the capital raised and will be subject to the approval of the Board of Directors.
Conditional share issuance clause with vesting schedule
This version includes a vesting schedule for share issuance.
Shares granted to employees or directors under this agreement shall be issued on a vesting schedule, with [X]% of the total shares vesting each year over [Y] years. The issuance will only occur if the employee remains employed or if the director remains on the Board for the duration of the vesting period.
Conditional share issuance clause with strategic partnership requirement
This version includes a strategic partnership requirement.
The [Company] will issue shares to strategic partners or investors if the company enters into a formal partnership agreement with a third-party organization. The issuance will be contingent upon the execution of the partnership agreement and meeting agreed-upon milestones.
Conditional share issuance clause with market conditions
This version includes market conditions for share issuance.
The issuance of shares will be contingent upon favorable market conditions, including the company’s stock price reaching [X] per share, or achieving a [Y]% increase in market capitalization. Shares will only be issued once these market conditions are met and confirmed by the Board of Directors.
Conditional share issuance clause with acquisition event
This version includes an acquisition event as a condition.
In the event of an acquisition of the [Company], the company will issue additional shares to current shareholders based on the terms outlined in the acquisition agreement. The issuance will be conditional on the successful completion of the acquisition, and the number of shares will be determined by the valuation of the company at the time of the acquisition.
Conditional share issuance clause with employee performance evaluation
This version includes performance evaluations for share issuance.
The [Company] will issue shares to employees based on their performance evaluations. These evaluations will be conducted annually and will determine whether the employee qualifies for a share issuance. The number of shares issued will be linked to performance metrics such as sales growth, project completion, or other KPIs.
Conditional share issuance clause with company financial targets
This version includes financial targets for share issuance.
The [Company] will issue shares to its investors or stakeholders contingent upon the company meeting certain financial targets, such as achieving annual revenue of [X] dollars or a net profit of [Y] dollars. If the company fails to meet these targets, no shares will be issued.
Conditional share issuance clause with regulatory approval
This version includes regulatory approval as a condition.
The issuance of shares will be contingent on obtaining the necessary regulatory approvals. If the company’s share issuance requires approval from relevant authorities or regulators, the issuance will not take place until such approval has been obtained.
Conditional share issuance clause with exit event
This version includes an exit event requirement.
The [Company] will issue additional shares to investors or key employees in the event of a successful exit, such as an IPO or sale of the company. The issuance will be based on the agreed-upon exit terms and will be conditional on the successful completion of the exit event.
Conditional share issuance clause with revenue milestones
This version includes revenue milestones as a condition.
The company will issue shares to employees or stakeholders once the company achieves specified revenue milestones. For example, shares will be issued once the company reaches [X] million dollars in annual revenue. The issuance will be conditional upon meeting these milestones as verified by the financial department.
Conditional share issuance clause with debt reduction targets
This version includes debt reduction targets for share issuance.
The [Company] will issue shares if the company reduces its outstanding debt by [X]% over a specified period. The shares will be issued as part of a debt reduction strategy to align stakeholders’ interests with the company’s financial health.
Conditional share issuance clause with capital structure change
This version includes a capital structure change requirement.
The issuance of additional shares will be contingent upon the company’s capital structure undergoing a specific change, such as refinancing existing debt or converting convertible securities into equity. The share issuance will be proportional to the change in the company’s capital structure.
Conditional share issuance clause with long-term strategic goals
This version includes long-term strategic goals as a condition.
The [Company] will issue shares to stakeholders who meet specific long-term strategic goals, including market expansion, product innovation, or customer acquisition targets. These goals will be outlined annually and reviewed at the end of each fiscal year.
Conditional share issuance clause with partnership revenue goals
This version includes partnership revenue goals.
The [Company] will issue shares to strategic partners based on revenue generated through the partnership. If the partnership generates more than [X] dollars in revenue during the fiscal year, shares will be issued to the partner as part of the agreement.
Conditional share issuance clause with equity dilution protections
This version includes protections against equity dilution.
In the event of a new share issuance that would dilute existing shareholder equity, the company will offer current shareholders the opportunity to purchase additional shares to maintain their proportional ownership. This opportunity will be available for [X] days after the issuance announcement.
Conditional share issuance clause with performance-based options
This version includes performance-based share options.
The [Company] will issue share options to employees based on their performance. These options will vest upon the achievement of specific individual and company-wide performance metrics, such as revenue targets, profit margins, or successful completion of key projects.
Conditional share issuance clause with partner equity participation
This version includes partner equity participation.
The [Company] will issue shares to strategic partners who contribute to the company’s growth through partnerships, joint ventures, or business development. The share issuance will be based on the agreed-upon partnership goals and will be contingent upon meeting specific performance milestones.
Conditional share issuance clause with employee retention
This version includes employee retention conditions for share issuance.
The [Company] shall issue shares to key employees as part of a retention strategy. Shares will be issued after the employee completes a retention period of [X] years and remains employed with the company for the duration of the vesting period.
Conditional share issuance clause with exit liquidity event
This version includes an exit liquidity event requirement for share issuance.
The [Company] will issue additional shares to investors or employees in the event of a liquidity event, such as the sale of a majority interest in the company or an IPO. The shares will be contingent upon the completion of the liquidity event and paid out based on the final sale or market price.
Conditional share issuance clause with integration of new acquisitions
This version includes share issuance tied to company acquisitions.
The [Company] may issue shares to employees or stakeholders involved in the integration of new acquisitions, contingent on the successful integration of the acquired company into the company’s operations. The shares will be issued based on integration milestones, including operational efficiency and synergies realized.
Conditional share issuance clause with restructuring approval
This version includes conditional issuance based on restructuring approval.
Share issuance will be conditional upon approval by the Board of Directors of any corporate restructuring plan. If the company undergoes significant restructuring, shares may be issued to key stakeholders as part of the new organizational structure.
Conditional share issuance clause with strategic alliance formation
This version includes share issuance linked to a strategic alliance.
The [Company] will issue shares to key stakeholders or partners upon the successful formation of a strategic alliance or joint venture that results in a defined business expansion. The issuance will be contingent on formalizing the alliance agreement and meeting specific business milestones.
Conditional share issuance clause with performance review
This version includes performance review-based share issuance.
The issuance of shares will be contingent upon an annual performance review, conducted by the Board of Directors. If performance criteria such as revenue growth, market expansion, or product development targets are met, shares will be issued to eligible employees or stakeholders.
Conditional share issuance clause with milestone achievement for project success
This version includes share issuance based on project success.
The [Company] will issue shares to employees or contractors involved in specific projects if the project is completed on time and within budget. Milestones related to the project’s success, such as customer delivery or product launch, will trigger share issuance upon completion.
Conditional share issuance clause with board approval on terms
This version includes board approval for the terms of share issuance.
Any share issuance will be contingent upon the approval of the Board of Directors. The Board will review and approve the number of shares, the issuance price, and the parties to whom shares will be issued, ensuring that the issuance aligns with the company’s overall strategy.
Conditional share issuance clause with competitive performance standards
This version includes competitive performance-based conditions for share issuance.
Share issuance will be contingent upon meeting or exceeding competitive performance standards in the market. This includes outperforming key competitors on metrics such as market share, sales growth, or customer acquisition, with share issuance taking place upon achieving these benchmarks.
Conditional share issuance clause with capital investment milestone
This version includes capital investment milestones for share issuance.
The [Company] will issue additional shares to investors who contribute capital above a specified threshold. The issuance will be conditional upon meeting agreed-upon capital investment milestones and will be proportional to the amount invested.
Conditional share issuance clause with target market penetration
This version includes market penetration as a condition for share issuance.
The company will issue shares to employees or partners contingent upon achieving specific target market penetration goals. These goals may include increasing market share by [X]% or expanding into [Y] new markets, with shares issued based on the achievement of these targets.
Conditional share issuance clause with product innovation
This version includes product innovation as a condition for share issuance.
Shares will be issued to product development teams upon the successful completion and market launch of a new product. The issuance will be contingent upon meeting product performance criteria, including customer acceptance, sales targets, and post-launch feedback.
Conditional share issuance clause with revenue sharing arrangement
This version includes a revenue-sharing arrangement tied to share issuance.
The company will issue shares to stakeholders or partners based on a revenue-sharing agreement. As the company achieves specified revenue milestones, shares will be issued according to the revenue-sharing agreement in proportion to the earnings generated.
Conditional share issuance clause with financial restructuring
This version includes conditional share issuance based on financial restructuring.
The company will issue shares to existing shareholders or creditors upon the successful completion of a financial restructuring plan. The issuance will be contingent upon the approval of the restructuring plan and the achievement of debt reduction or equity infusion goals.
Conditional share issuance clause with executive performance bonus
This version includes a conditional issuance based on executive performance.
The [Company] will issue shares to executives upon meeting predefined performance goals, such as increasing company profits, market share, or achieving specific strategic objectives. The shares will be issued as part of the executive's performance bonus package.
Conditional share issuance clause with product line extension
This version includes share issuance based on product line extension.
The company will issue shares to employees and partners involved in the successful launch of a new product line or service offering. The issuance will be contingent upon the successful market acceptance and financial success of the new product line.
Conditional share issuance clause with share issuance linked to IPO readiness
This version includes IPO readiness as a condition for share issuance.
The [Company] will issue shares to key stakeholders upon achieving IPO readiness. This includes the completion of necessary financial audits, regulatory filings, and the securing of underwriting commitments for an initial public offering. The issuance will be subject to the successful completion of these steps.
Conditional share issuance clause with merger integration targets
This version includes merger integration targets for share issuance.
Shares will be issued to employees, directors, or key stakeholders based on the successful integration of a merger. Targets such as achieving operational synergy, cost savings, or market expansion as a result of the merger will trigger the issuance of shares.
Conditional share issuance clause with compliance with regulatory approvals
This version includes regulatory compliance as a condition for share issuance.
The [Company] will issue shares to stakeholders, employees, or investors only after receiving all necessary regulatory approvals. These approvals may include antitrust clearance, industry-specific regulations, or approval from the relevant securities commissions.
Conditional share issuance clause with internal corporate milestones
This version includes internal corporate milestones for share issuance.
The [Company] will issue shares upon the completion of key internal corporate milestones, such as the launch of a new internal system, the completion of a corporate restructuring, or the hiring of key personnel. These milestones will be established by the Board of Directors and outlined in the shareholder agreement.
Conditional share issuance clause with customer acquisition goals
This version includes customer acquisition goals as a condition for share issuance.
The company will issue shares to employees or partners based on customer acquisition targets. These targets may include signing [X] new contracts or acquiring [Y] new customers within a specified period. The issuance will be conditional on the achievement of these customer acquisition goals.
Conditional share issuance clause with sustainability milestones
This version includes sustainability-related milestones for share issuance.
The company will issue shares to stakeholders or employees upon achieving key sustainability milestones, such as reducing carbon emissions by [X]% or implementing sustainable practices within the organization. These milestones will be linked to the company's environmental and social governance (ESG) strategy.
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