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Phantom Stock Agreement

Phantom Stock Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Phantom Stock Agreement

"I need a Phantom Stock Agreement for a UAE-based technology company, granting 1000 phantom stock units to our Chief Technology Officer with a 4-year vesting schedule starting March 1, 2025, and including special provisions for an anticipated IPO."

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Document background
The Phantom Stock Agreement is utilized by UAE companies seeking to provide employees with equity-like incentives without transferring actual ownership stakes. This approach is particularly valuable in the UAE context where foreign ownership restrictions may apply or where companies wish to maintain existing ownership structures while still offering competitive compensation packages. The document establishes synthetic equity rights that mirror the economic benefits of stock ownership, detailing grant terms, vesting schedules, valuation methods, and payment mechanisms. These agreements are commonly implemented as part of broader employee retention and incentivization strategies, while ensuring compliance with UAE labor laws, corporate regulations, and tax requirements.
Suggested Sections

1. Parties: Identification of the company and the recipient of the phantom stock rights

2. Background: Context of the agreement and purpose of the phantom stock grant

3. Definitions: Key terms including Phantom Stock Unit, Fair Market Value, Vesting Date, etc.

4. Grant of Phantom Stock Units: Details of the number of units granted and basic terms

5. Vesting Schedule: Timeline and conditions for vesting of phantom stock units

6. Valuation Mechanism: Method for determining the value of phantom stock units

7. Payment Terms: Conditions and process for payment of vested phantom stock units

8. Corporate Events: Treatment of phantom stock units in case of merger, acquisition, IPO, etc.

9. Termination Provisions: Impact of employment termination on phantom stock rights

10. Compliance with Laws: Provisions ensuring compliance with UAE laws and regulations

11. Confidentiality: Obligations regarding confidential information

12. General Terms: Standard contract provisions including governing law, notices, etc.

Optional Sections

1. Tax Provisions: Detailed tax treatment and obligations - include if tax implications are significant

2. Non-Competition: Restrictions on competitive activities - include if required by company policy

3. Shareholder Rights: Clarification that phantom stock holders have no actual shareholder rights - include if risk of misunderstanding

4. Administrative Committee: Establishment of committee to oversee plan - include for larger programs

5. International Compliance: Additional provisions for international participants - include if recipients are in multiple jurisdictions

6. Data Protection: Detailed data protection provisions - include if extensive personal data processing is involved

Suggested Schedules

1. Schedule 1 - Grant Notice: Specific details of the phantom stock grant including number of units and grant date

2. Schedule 2 - Vesting Schedule: Detailed vesting timeline and conditions

3. Schedule 3 - Valuation Formula: Detailed methodology for calculating phantom stock value

4. Schedule 4 - Payment Procedures: Administrative procedures for processing payments

5. Appendix A - Definitions: Extended definitions of technical terms

6. Appendix B - Corporate Governance: Relevant corporate approvals and governance procedures

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions





































Clauses




























Relevant Industries

Financial Services

Technology

Professional Services

Healthcare

Real Estate

Manufacturing

Retail

Energy

Telecommunications

Consulting

Relevant Teams

Human Resources

Legal

Finance

Executive Leadership

Corporate Governance

Compensation & Benefits

Talent Management

Corporate Strategy

Operations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Senior Executive

Department Head

Managing Director

Vice President

Senior Manager

Key Employee

Director

Regional Manager

Technical Lead

Principal Consultant

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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