Here's a simple fair way, if you can get everyone to agree. Forget about the sole proprietorship. Pretend you all vested your stock over a traditional 4/1 vest

Here's a simple fair way, if you can get everyone to agree. Forget about the sole proprietorship. Pretend you all vested your stock over a traditional 4/1 vesting schedule. Go back and figure out what you've already vested - keep that and move on. (so if you've put in 2 years, you get 12.5% of the common). The company should pay for this legal work, because it's something that should have been done a long time ago. Getting this right is in the company's interest as much, if not more than, your own.