Phantom Shares Plan

A Phantom Shares Plan is a legal template that outlines an agreement between a company and its employees or executives regarding a form of virtual or non-physical share ownership. In this arrangement, employees or executives are granted phantom shares, which do not represent actual ownership in the company but rather entitle the holder to certain benefits linked to the company's performance or valuation.

This legal template typically includes provisions outlining the terms and conditions of the Phantom Shares Plan, such as the eligibility criteria for participants, the duration of the plan, and the vesting schedule. It also includes details regarding the measurement and calculation of the value of phantom shares, often based on the company's financial performance indicators, intrinsic value, or other predetermined metrics.

Furthermore, the template may address the treatment of phantom shares in the event of employee termination, retirement, death, or a change in control of the company. It may stipulate that the phantom shares be settled with cash, equity, or a combination thereof upon meeting certain conditions.

Additionally, the legal template may include provisions related to the confidentiality of the Phantom Shares Plan, its non-transferability, and restrictions on participants' ability to compete with the company or solicit its customers or employees.

Overall, a Phantom Shares Plan legal template offers a comprehensive framework to establish an arrangement that aligns employee interests with the company's performance and growth while providing non-physical, virtual ownership-like benefits to participants.