I've been working with a co-founder for quite a while, and neither of us are actual employees of the company, we're just shareholders. We are finalizing a vesting agreement, but there are a couple of things we're not clear on. 1. If we've already signed a shareholders' agreement that didn't include vesting language, do we need to backdate the vesting agreement to before shares were actually allocated? We haven't distributed the physical shares yet, if that matters. 2. Vesting agreements generally keep someone employed. How does it apply if we aren't employees? E.g. if i suddenly stopped putting in any work, I still own 50%, it's not like I was fired or anything. What recourse would there be for me to give up my share of equity that I'm not earning anymore?
1. There are probably implications to backdating that only a lawyer should address so I can only speak to your 2nd question. The purpose of a vesting agreement is to retain key talent and to prevent the cap table from being ruined in the event that someone with significant equity quits or is terminated so to answer your question, your unvested shares *should* be cancelled.
Depending on where you are located, I can recommend a great US startup lawyer (private message me), and you should really standardize these agreements.
It's standard for the vesting to be 4 years. You *might* be asked to reset your vesting in your seed raise, FYI.
I'm not a lawyer but am the Founder of a Venture backed company so happy to talk to you if I can be helpful.