Document background
The Phantom Unit Award Agreement is utilized when companies wish to provide employees with equity-like incentives while maintaining existing ownership structures. This document type is particularly relevant for private companies, subsidiaries of international organizations, or entities where actual share issuance is impractical or undesired. Under Dutch law, these agreements must comply with specific employment, tax, and corporate regulations. The agreement details the grant of phantom units, vesting conditions, calculation methodologies, payment terms, and tax implications. It serves as a critical tool for employee retention and long-term incentivization, while avoiding the complexities of actual share issuance and shareholder rights. The document typically includes provisions that align with Dutch corporate governance requirements and tax regulations, making it suitable for both domestic Dutch companies and Dutch subsidiaries of international organizations.
