EQUITY EXCHANGE RIGHT AGREEMENT
THIS EQUITY EXCHANGE RIGHT AGREEMENT (this Agreement) is made and entered into as of March __, 2021, by and between Compass, Inc., a Delaware corporation (the Company), and Robert Reffkin (the Founder).
WHEREAS, the Companys board of directors (the Board) has determined that it is in the best interests of the Company and its stockholders to implement a multi class common stock structure in connection with the Companys initial public offering of its capital stock (the IPO) to, among other things, enable the Company to execute its long-term vision;
WHEREAS, in connection with the IPO, the Board and the stockholders of the Company have approved and adopted that certain Twelfth Amended and Restated Certificate of Incorporation of the Company (the Amended and Restated Certificate of Incorporation), which, among other things provides for three classes of common stock of the Company, Class A Common Stock, par value $0.0001 per share (Class A Common Stock), entitling holders to one (1) vote for each share thereof held, Class B Common Stock, par value $0.0001 per share, entitling holders to zero (0) votes for each share thereof held unless required by applicable law and a newly-created Class C Common Stock, par value $0.0001 per share (Class C Common Stock), entitling holders to twenty (20) votes per share thereof held;
WHEREAS, Founder holds awards of restricted stock units and performance-based restricted stock units covering shares of Class A Common Stock that will be outstanding as of immediately prior to the time the Companys Registration Statement on Form S-1 relating to the IPO is declared effective by the Securities and Exchange Commission (the Effective Time) as set forth in Exhibit A (each, a Founder Equity Award), and each Founder Equity Award has been granted under the Companys 2012 Stock Incentive Plan, as amended, and the award agreement memorializing each Founder Equity Award (collectively, the Equity Documents); and
WHEREAS, as part of the implementation of the multi class common stock structure, the Board has determined that it is advisable and in the best interest of the Company and all of its stockholders, including its stockholders other than Founder, to provide Founder with the right to require the Company to exchange shares of Class A Common Stock that Founder acquires upon the exercise, vesting, and/or settlement of his Founder Equity Awards for a number of shares of Class C Common Stock of equivalent value as determined on the date of the exchange (which is expected to be on a one share-for-one share basis), subject to the terms and conditions set forth in this Agreement; and
WHEREAS, the parties intend that no gain or loss will be recognized in any Exchange (as defined below) pursuant to Sections 368(a)(1)(E) and/or 1036 of the Internal Revenue Code of 1986, as amended (the Code).
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, representations and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the parties hereto agree as follows:
PUT RIGHT AND EXCHANGE AND ISSUANCE OF CLASS C COMMON STOCK
1.1 Grant of Put Right. Effective immediately following the Effective Time, and subject to the terms and provisions of this Agreement (including Section 1.2(a) below), the Company hereby irrevocably grants to Founder the right (the Put Right) to require the Company to exchange any shares of Class A Common Stock that Founder acquires following the Effective Time as a result of the exercise, vesting, and/or settlement of his Founder Equity Awards (each, a Put Eligible Share) for a number of shares of Class C Common Stock of equivalent value as determined on the date of the exchange (which is expected to be on a one share-for-one share basis), subject to the terms and conditions set forth in this Agreement (the Exchange).