tiktok���˰�

A Phantom Share Agreement is utilized when companies want to provide equity-like incentives without diluting actual shareholding or altering their corporate structure. Common in private companies, partnerships, and subsidiaries of international groups operating under English and Welsh law, this document outlines the terms of synthetic equity rights, including grant size, vesting schedule, valuation methods, and payment conditions. The agreement is particularly valuable when actual share transfers are impractical due to regulatory restrictions, corporate structure limitations, or tax considerations. It provides a framework for long-term incentivization while maintaining compliance with UK employment, tax, and corporate regulations.

1. Parties: Details of the company and participant entering into the phantom share agreement

2. Background: Context and purpose of the phantom share scheme, including company structure and rationale

3. Definitions: Key terms including Phantom Shares, Vesting Period, Exercise Price, Fair Market Value, and other relevant definitions

4. Grant of Phantom Shares: Number of phantom shares granted, grant date, and conditions of the grant

5. Vesting Provisions: Vesting schedule, conditions for vesting, and treatment of unvested shares

6. Valuation Mechanism: Method and formula for calculating phantom share value and payment amounts

7. Payment Terms: Timing, method, and conditions for payments of vested phantom shares

8. Tax Provisions: Tax treatment, withholding obligations, and responsibilities of both parties

9. Termination Provisions: Effects of employment termination on phantom shares and payment rights