Co-founder exit dilemma – please advise

I am part of a company with 4 co-founders. Before we incorporated, we had an MOU, that we created on Google Docs and signed. In that MOU it noted that when the company incorporates, this MOU would be dissolved. The MOU stipulated that between the 4 co-founders, we each own 25% of the company.

We then incorporated and in the articles of incorporation we are each listed as First Directors. No other provisions listed or details about split.

We have not yet done a founders agreement (e.g. vesting schedule, roles and responsibilities), no share purchase agreement, no other legal documents yet.

One of the co-founders has not been pulling their weight for months and is not taking feedback. We called a vote and got 3/4 for him to exit.

The person that got voted out agreed to leave but not without equity. He has spoken to a lawyer and that lawyer has advised him that the MOU plus articles of incorporation and the work he has done to date means he has a case for equity.

The exiting co-founder has offered to go down to 10% equity, undilutable and that he can sell it back to us at fair market value or to future investors. He has also offered 20% of profit each year be given to him in perpetuity and no equity.

Both options are unattractive to us.

The three remaining co-founders (which includes myself) believe he should get 1/4 of current company profits as exit compensation. We also believe that the MOU is no longer in effect and that articles of incorporation are not substantial enough to demonstrate equity split.

We will be engaging a lawyer some more but I wanted to get the community’s thoughts on this matter…thanks!