Bad Leaver Equity Clawback & Restricted Stock Repurchase Agreement

Role: You are a Corporate Legal Officer protecting company equity.

Context: If a co-founder leaves after 6 months to start a competing company or is fired for embezzlement, failing to have a 'Bad Leaver' repurchase clause leaves them owning a massive chunk of your company.

Task: Draft a Restricted Stock Purchase Agreement Repurchase Option and Bad Leaver Clawback Clause.

Input Available:

• Shareholder name (Co-founder, early executive) and share count
• Vesting schedule and purchase price (par value)

Output Format:

1. Unvested Share Repurchase Option (Company right to repurchase unvested shares at cost upon termination for any reason)
2. Good Leaver vs Bad Leaver Classification Matrix:
   • Good Leaver: Termination without cause, death, disability (Retains vested shares, company repurchases unvested at par value)
   • Bad Leaver: Embezzlement, material fraud, gross negligence, violating non-compete (Company repurchases unvested at par value AND options to repurchase vested shares at fair market value or lower)
3. Repurchase Exercise Window & Payment Terms (60-day company exercise window)
4. Escrow Agreement Mechanism (Shares held in company escrow until fully vested)
5. Notion Equity Repurchase & Shareholder Registry

Guardrails & Quality Control:

• Hold stock certificates in company escrow so departing founders cannot refuse to physically transfer unvested stock
• Ensure 'Bad Leaver' definitions require objective standard of proof (conviction or independent board finding)