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Share vesting means that a shareholder only gradually 'earns' their shares by remaining in the company. The American vesting structure cannot be replicated one-to-one in the Netherlands, but you can achieve the same goal with a well-thought-out shareholders' agreement.
What is a fortress?
Vesting is common among startups in the United States. The build-up of equity is made dependent on the length of time someone remains involved or on achieving milestones. If a co-founder leaves early, they retain only a portion of the shares. This prevents someone with a substantial stake from leaving without contributing.
Fortress in the Netherlands: more nuanced
The American form cannot simply be copied in the Netherlands, partly due to differences in corporate law. Nevertheless, you can remain true to the underlying philosophy with structures that do work here, particularly through agreements in the shareholders' agreement.
Reverse vesting and offering obligations
A common solution is 'reverse vesting': the shareholder receives the shares but must return them (partially) or offer them at a predetermined price if he leaves within a certain period. With well-drafted departure, offer, and valuation provisions, you achieve the effect of vesting under Dutch law.
Stipulate it in the shareholders' agreement
The key lies in clear agreements: which events lead to the return of the asset, at what price, and at what pace someone builds up their interest. An unclear arrangement leads to conflict, particularly upon departure. Tailoring is essential here.
Frequently Asked Questions
Can I use a US fortress clause in the Netherlands?
Not one-to-one, but with reverse vesting and offering obligations in the shareholders' agreement, you achieve the same goal.
Why use a fortress?
To prevent a co-founder with a substantial stake from leaving without having contributed sufficiently.
Where do I capture the fortress?
In the shareholders' agreement, with clear exit, offer, and valuation provisions.
Arranging fortress or shareholder agreements?
Our legal experts incorporate a fortress-style arrangement into your shareholders' agreement. View our corporate lawteam or schedule a free consultation.
