Document background
The Shadow Equity Agreement is designed for companies operating under Danish law who wish to incentivize key employees or contractors without diluting actual shareholding. This document type is particularly valuable for private companies, startups, and subsidiaries of foreign entities where direct equity participation might be complicated by corporate structure or shareholder restrictions. The agreement creates a contractual framework that simulates share ownership, providing beneficiaries with financial rights similar to those of shareholders while maintaining the company's existing ownership structure. It includes comprehensive provisions for vesting, valuation, and payment triggers, all structured to comply with Danish corporate, employment, and tax regulations. The document is especially relevant in scenarios where traditional equity arrangements are impractical or undesirable, offering a flexible alternative that achieves similar incentivization goals.
