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Introduction

This language would be used if the investors elect to have the company buy-out their shares at a predetermined price (the “redemption price”). The parties then further agree that the redemption price will decrease based on the achievement of social outcomes. In addition to knowing how they will measure successful impact performance, the parties will need to agree on the amount of the reduction to the redemption price. For more on redemption price and terms, see Equity redemption and dividend.

The multiple metrics sample language can be used to tie multiple impact outcomes to specific rewards.

Sample language for redemption price reduction based on one metric or milestone

[For every] OR [Upon completion of] [specify impact target], the redemption price per Share shall be reduced by X percent, provided that the price shall not be reduced below [$X per Share] OR [the Purchase Price] OR [a redemption price per Share equivalent to an X percent return per year on the Purchase Price].

Sample language for redemption price reduction based on multiple metrics or milestones

The redemption price per Share shall be reduced by the amount shown in the table below when and if the Company achieves the corresponding outcome. In the aggregate, the price shall not be reduced below [$X per Share] OR [the Purchase Price] OR [a redemption price per Share equivalent to an X percent return per year on the Purchase Price].

Impact Metric Price Reduction
Social Metric 1 X%
Social Metric 2 Y%

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