[{"data":1,"prerenderedAt":526},["ShallowReactive",2],{"document-phantom-stock-agreement-D12853":3},{"document":4,"label":23,"preview":11,"thumb":24,"description":5,"descriptionCustom":6,"apiDescription":5,"pages":8,"extension":10,"parents":25,"breadcrumb":29,"related":37,"customDescModule":177,"customdescription":6,"mdFm":178,"mdProseHtml":525},{"description":5,"descriptionCustom":6,"label":7,"pages":8,"size":9,"extension":10,"preview":11,"thumb":12,"svgFrame":13,"seoMetadata":14,"parents":16,"keywords":15},"PHANTOM STOCK AGREEMENT This Phantom Stock Agreement (the \"Agreement\") is effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [SECOND PARTY NAME] (the \"Grantee\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS, the Grantee has been granted ________ number of Phantom Shares through Phantom Grant Number_________________________. NOW THEREFORE, in consideration of the premises and of the mutual agreements contained in this Agreement, the parties hereto agree as follows: NOTICE OF GRANT The Grantee is hereby granted, pursuant to the Company's Stock Incentive Plan (the \"Plan\"), the above number of Phantom Shares of the Company, subject to the terms and conditions of the Plan and this Agreement. VESTING The Phantom Shares shall instead become vested in accordance with the following schedule: [ENTER DATE OF GRANT AND CUMULATIVE VESTED PERCENTAGE]. While a Phantom Share remains \"outstanding,\" pursuant to this Agreement, an amount equivalent to the distributions made on a share of Common Stock during such period shall be held by the Company without interest until the Phantom Share becomes vested or is paid.. Notwithstanding the above schedule, all Phantom Shares that are not vested on, or, in the case of the above, in connection with, termination of employment (including, without limitation, termination on account of death, disability, or retirement), shall be automatically cancelled and forfeited without consideration, upon termination. For purposes of this Agreement, \"employment with the Company\" shall include being an employee or a director of, or a consultant to, the Company or an affiliate. RIGHT OF REPURCHASE OF UNVESTED SHARES Payment/Certificates: Upon vesting of the Phantom Shares, the Company shall either: (a) cause a certificate or certificates for shares of Common Stock to be issued in the Grantee's name without legend (except for any legend required pursuant to applicable securities laws or any other agreement to which the Grantee is a party); (b) cause to be paid to the Grantee an amount equal to the fair market value of the shares that would otherwise be issued to the Grantee; or (c) cause to be paid and issued to the Grantee a combination of cash and shares, which, in combination, equal the fair market value of the shares that would otherwise be issued to the Grantee; in each case, in cancellation of the Phantom Shares that have been vested; provided, however, in no event shall such payment or issuance of shares be made prior to the first day, or such payment would not be subject to the additional tax. RESTRICTIONS ON TRANSFERS 4.1 The Grantee may not sell, transfer, pledge, exchange, hypothecate or dispose of Phantom Shares in any manner. A breach of these terms of this Agreement shall cause a forfeiture of the Phantom Shares. 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The term of employment shall be for a period of [NUMBER] years (\"Employment Period\") to commence on [DATE], unless earlier terminated as set forth herein. The effective date of this Agreement shall be the date first set forth above, and it shall continue in effect until the earlier of: The effective date of any subsequent employment agreement between the Company and the Executive; The effective date of any termination of employment as provided elsewhere herein; or [NUMBER] year(s) from the effective date hereof, provided, that this Employment Agreement shall automatically renew for successive periods of [NUMBER] years each unless either party gives written notice to other that it does not wish to automatically renew this Agreement, which written notice must be received by the other party no less than [NUMBER] days and no more than [NUMBER] days prior to the expiration of the applicable term. Duties and Responsibilities Executive will be reporting to [IDENTIFY]. Within the limitations established by the By-laws of the Company, the Executive shall have each and all of the duties and responsibilities of that position and such other or different duties on behalf of the Company, as may be assigned from time to time by [identify what person or body may assign additional responsibilities]. Location The initial principal location at which Executive shall perform services for the Company shall be [location]. Acceptance of Employment Executive accepts employment with the Company upon the terms set forth above and agrees to devote all Executive's time, energy and ability to the interests of the Company, and to perform Executive's duties in an efficient, trustworthy and business-like manner. Devotion of Time to Employment The Executive shall devote the Executive's best efforts and substantially all of the Executive's working time to performing the duties on behalf of the Company. The Executive shall provide services during the normal business hours of the Company as determined by the Company. Reasonable amounts of time may be allotted to personal or outside business, charitable and professional activities and shall not constitute a violation of this Agreement provided such activities do not materially interfere with the services required to be rendered hereunder. QUALIFICATIONS The Executive shall, as a condition of this Agreement, satisfy all of the qualification that are reasonably and in good faith established by the Board of Directors. Compensation Base Salary Executive shall be paid a base salary (\"Base Salary\") at the annual rate of [salary], payable in bi-weekly installments consistent with Company's payroll practices. The annual Base Salary shall be reviewed on or before [DATE] of each year, unless Executive's employment hereunder shall have been terminated earlier pursuant to this Agreement, starting on [agreed upon date] by the Board of Directors of the Company to determine if such Base Salary should be increased for the following year in recognition of services to the Company. In consideration of the services under this Agreement, Executive shall be paid the aggregate of basic compensation, bonus and benefits as hereinafter set forth. Payment Payment of all compensation to Executive hereunder shall be made in accordance with the relevant Company policies in effect from time to time, including normal payroll practices. Bonus From time to time, the Company may pay to Executive a bonus out of net revenues of the Company. Payment of any bonus compensation shall be at the sole discretion of the Board of Directors or the Executive committee of the Board of Directors and the Executive shall have no entitlement to such amount absent a decision by the Company as aforesaid to make such bonus compensation. Executive shall also be entitled to a bonus determined as follows: [DESCRIBE] Benefits The Company shall provide Executive with such benefits as are provided to other senior management Of the Company. Benefits shall include at a minimum (i) paid vacation of [NUMBER] days per year, at such times as approved by the Board of Directors, (ii) health insurance coverage under the same terms as offered to other Executives of the Company, (iii) retirement and profit sharing programs as offered to other Executives of the Company, (iv) paid holidays as per the Company's policies, and (v) such other benefits and perquisites as are approved by the Board of Directors. The Company has the right to modify conditions of participation, terminate any benefit, or change insurance plans and other providers of such benefits in its sole discretion. The Executive shall be reimbursed for out of pocket expenses that are pre-approved by the Company, subject to the Company's policies and procedures therefore, and only for such items that are a necessary and integral part of the Executive's job functions. NonDeductible Compensation In the event a deduction shall be disallowed by the Internal Revenue Service or a court of competent jurisdiction for federal income tax purposes for all or any part of the payment made to Executive by the Company or any other shareholder or Executive of the Company, shall be required by the Internal Revenue Service to pay a deficiency on account of such disallowance, then Executive shall repay to the Company or such other individual required to make such payment, an amount equal to the tax imposed on the disallowed portion of such payment, plus any and all interest and penalties paid with respect thereto. The Company or other party required to make payment shall not be required to defend any proposed disallowance or other action by the Internal Revenue Service or any other state, federal, or local taxing authorities. Withholding All sums payable to Executive under this Agreement will be reduced by all federal, state, local, and other withholdings and similar taxes and payments required by applicable law. Other Employment Benefits Business Expenses Upon submission of itemized expense statements in the manner specified by the Company, Executive shall be entitled to reimbursement for reasonable travel and other reasonable business expenses duly incurred by Executive in the performance of his duties under this Agreement. Benefit Plans Executive shall be entitled to participate in the Company's medical and dental plans, life and disability insurance plans and retirement plans pursuant to their terms and conditions. Executive shall be entitled to participate in any other benefit plan offered by the Company to its Executives during the term of this Agreement (other than stock option or stock incentive plans, which are governed by Section 3(d) below). Nothing in this Agreement shall preclude the Company or any affiliate of the Company from terminating or amending any Executive benefit plan or program from time to time. Vacation Executive shall be entitled to [agreed upon number of time] weeks of vacation each year of full employment, exclusive of legal holidays, as long as the scheduling of Executive's vacation does not interfere with the Company's normal business operations.","Employment Agreement Executive","12",97,"https://templates.business-in-a-box.com/imgs/1000px/employment-agreement_executive-D543.png","https://templates.business-in-a-box.com/imgs/250px/543.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#543.xml",{"title":6,"description":6},[96,99,102],{"label":97,"url":98},"Human Resources","human-resources",{"label":100,"url":101},"Hire an Employee","hire-employee",{"label":32,"url":103},"business-legal-agreements","employment agreement executive","/template/employment-agreement-executive-D543",{"description":107,"descriptionCustom":6,"label":108,"pages":109,"size":9,"extension":10,"preview":110,"thumb":111,"svgFrame":112,"seoMetadata":113,"parents":115,"keywords":114,"url":119},"EMPLOYMENT AGREEMENT - AT WILL EMPLOYEE This Employment Agreement for \"At Will\" Employee (the \"Agreement\") is made and effective this [DATE], BETWEEN: [EMPLOYEE NAME] (the \"Employee\"), an individual with his main address at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Corporation\"), an entity organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] RECITALS In consideration of the covenants and agreements herein contained and the moneys to be paid hereunder, the Corporation hereby employs the Employee and the Employee hereby agrees to perform services as an employee of the Corporation, on an \"at will\" basis, upon the following terms and conditions: APPOINTMENT The Employee is hereby employed by the Corporation to render such services and to perform such tasks as may be assigned by the Corporation. The Corporation may, in its sole discretion, increase or reduce the duties, or modify the title and job description, of the Employee from time to time, and any such increase, reduction or modification shall not be deemed a termination of this Agreement. ACCEPTANCE OF EMPLOYMENT Employee accepts employment with the Corporation upon the terms set forth above and agrees to devote all Employee's time, energy and ability to the interests of the Corporation, and to perform Employee's duties in an efficient, trustworthy and business-like manner. DEVOTION OF TIME TO EMPLOYMENT The Employee shall devote the Employee's best efforts and substantially all of the Employee's working time to performing the duties on behalf of the Corporation. The Employee shall provide services during the hours that are scheduled by the Corporation management. The Employee shall be prompt in reporting to work at the assigned time. NO CONFLICT OF INTEREST Employee shall not engage in any other business while employed by the Corporation. Employee shall not engage in any activity that conflicts with the Employees duties to the Corporation. Employee shall not provide any service or lend any aid or assistance to any party that competes with the services offered by the Corporation. Employee shall not provide any services to clients or prospective clients of the Corporation outside of the provision of services for the Corporation, whether such services are provided with or without compensation or remuneration. CORPORATION PROPERTY Employee acknowledges and agrees that while employed by the Corporation the Employee may be provided with use of computer equipment and other property of the Corporation. The use and possession of the such items shall be subject to any policies, requirements or restrictions established by the Corporation. Such items may only be used in performance of the Employee's duties for the corporation. On request of the Corporation, the Employee shall immediately deliver any such items to the Corporation. Upon termination of employment, Employee shall have the affirmative duty to return any such item to the Corporation whether a request is made or not. The obligation to return Corporation property shall extend and include any and all work product, client property, proprietary rights, intangible property, and all other property of the corporation regardless of the form or medium. COMPENSATION The Corporation shall pay the Employee such hourly compensation as determined by the Corporation. Payment shall be at the same time as the Corporations usual payroll to other employees. BONUS & BENEFITS Payment of any bonuses shall be at the complete discretion of the Corporation. No guarantee or representation that any bonuses will be paid has been made to the Employee. Standard benefits that are provided to other non-management employees shall be offered to the Employee, subject to the Corporation's policies and the terms and conditions of such benefits. WITHHOLDING All sums payable to Employee under this Agreement will be reduced by all federal, state, local, and other withholdings and similar taxes and payments required by applicable law. QUALIFICATIONS OF EMPLOYEE The employee shall satisfy all of the qualification that are established by the Corporation. TERM OF AGREEMENT There shall be no guaranteed term of employment. Employer acknowledges and agrees that Employee shall be an \"At Will\" Employee and that Employee's employment may be terminated at any time by the Corporation, with or without cause. FEES FROM EMPLOYEE'S WORK The Corporation shall have exclusive authority to determine the fees, or a procedure for establishing the fees, to be charged to clients by the Corporation for services that are provided by the Employee. All sums paid to the Employee or the Corporation in the way of fees, in cash or in kind, or otherwise for services of the Employee, shall, except as otherwise specifically agreed by the Corporation, be and remain the property of the Corporation and shall be included in the Corporation's name in such checking account or accounts as the Corporation may from time to time designate. CLIENTS AND CLIENT RECORDS The Corporation shall have the authority to determine who will be accepted as clients of the Corporation, and the Employee recognizes that such clients accepted are clients of the Corporation and not the Employee. All client records and files of any type concerning clients of the Corporation shall belong to and remain the property of the Corporation, notwithstanding the subsequent termination of the employment. POLICIES AND PROCEDURES The Corporation shall have the authority to establish from time to time the policies and procedures to be followed by the Employee in performing services for the Corporation. This may include, but is not necessarily limited to, employment policies, computer use policies, Internet access policies, email policies, and all other policies, procedures, directives, and mandates established by the Corporation, whether or not in written form or formally adopted. Employee shall abide by the provisions of any contract entered into by the Corporation under which the Employee provides services. Employee shall comply with the terms and conditions of any and all contracts entered by the Corporation. TERMINATION Employee acknowledges and agrees that Employee is an \"at will\" employee of the Corporation. As such, no term of employment is created hereby and employee may be terminated at any time in the sole discretion of the Corporation, whether there exists any cause for termination or not. CREATIONS AND INVENTIONS Employee acknowledges and agrees that any and all work product of the Employee that is conceived or created during the Employee's employment with the Corporation is the exclusive property of the Corporation. This shall include any and all copyrights, trade secrets, confidential information, patents, trademarks, trade dress, ideas, concepts, plans, business plans, business concepts, techniques, inventions, drawings, artwork, logos, graphics, web pages, databases, software, programs, CGI's, plug ins, applications, brochures, inventions, marketing plans and concepts, and all other ideas and work product of the Employee. The Employee acknowledges and agrees that all creations shall be \"works made for hire\" as defined in the [ACT OR CODE]. Notwithstanding the fact that this material may be considered to be a work made for hire, Employee agrees, during Employee's employment and thereafter, which covenant shall survive any termination of the employment relationship, to execute any and all documents requested by the Corporation to confirm the Corporation's ownership and control of all such material, including but not limited to assignments of copyright, confirmations of work for hire status, waivers of proprietary rights, copyright application, and any other documents requested by Corporation. RESTRICTIVE COVENANTS","Employment Agreement_At Will Employee","7","https://templates.business-in-a-box.com/imgs/1000px/employment-agreement_at-will-employee-D541.png","https://templates.business-in-a-box.com/imgs/250px/541.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#541.xml",{"title":114,"description":6},"employment agreement_at will employee",[116,117,118],{"label":97,"url":98},{"label":100,"url":101},{"label":32,"url":103},"/template/employment-agreement_at-will-employee-D541",{"description":121,"descriptionCustom":6,"label":122,"pages":123,"size":9,"extension":10,"preview":124,"thumb":125,"svgFrame":126,"seoMetadata":127,"parents":129,"keywords":128,"url":134},"NON-DISCLOSURE AGREEMENT (NDA) This Non-Disclosure Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Disclosing Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [RECEIVING PARTY NAME] (the \"Receiving Party\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS, Receiving Party has been or will be engaged in the performance of work on [DESCRIBE]; and in connection therewith will be given access to certain confidential and proprietary information; and WHEREAS, Receiving Party and Disclosing Party wish to evidence by this Agreement the manner in which said confidential and proprietary material will be treated. NOW, THEREFORE, it is agreed as follows: NON-DISCLOSURE OF CONFIDENTIAL INFORMATION Both Parties understand and agree that each Party may have access to the confidential information of the other party. For the purposes of this Agreement, \"Confidential Information\" means proprietary and confidential information about the Disclosing Party's (or it's suppliers') business or activities. Such information includes all business, financial, technical, and other information marked or designated by such Party as \"confidential\" or \"proprietary.\" Confidential Information also includes information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. For the purposes of this Agreement, Confidential Information does not include: Information that is currently in the public domain or that enters the public domain after the signing of this Agreement. Information a Party lawfully receives from a third Party without restriction on disclosure and without breach of a non-disclosure obligation. Information that the Receiving Party knew prior to receiving any Confidential Information from the Disclosing Party. Information that the Receiving Party independently develops without reliance on any Confidential Information from the Disclosing Party. Each Party agrees that it will not disclose to any third Party or use any Confidential Information disclosed to it by the other Party except when expressly permitted in writing by the other Party. Each Party also agrees that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control. TERM The term of this Agreement is [number] of [years/months] from the date of execution by both Parties. TITLE The Receiving Party agrees that all Confidential Information furnished by the Disclosing Party shall remain the sole property of the Disclosing Party. DISCLAIMER","Non Disclosure Agreement Nda","3","https://templates.business-in-a-box.com/imgs/1000px/non-disclosure-agreement-nda-D12692.png","https://templates.business-in-a-box.com/imgs/250px/12692.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12692.xml",{"title":128,"description":6},"non disclosure agreement nda",[130,131],{"label":32,"url":103},{"label":132,"url":133},"Confidentiality Agreements","confidentiality-agreement","/template/non-disclosure-agreement-nda-D12692",{"description":136,"descriptionCustom":6,"label":137,"pages":138,"size":139,"extension":10,"preview":140,"thumb":141,"svgFrame":142,"seoMetadata":143,"parents":144,"keywords":147,"url":148},"NON-COMPETE AGREEMENT This Non-Compete Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: FIRST PARTY NAME] (the \"First Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [COMPANY NAME] (the \"Second Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] FOR GOOD CONSIDERATION, the receipt of which is hereby acknowledged, the undersigned First party agrees not to compete with Second party, or its successors or assigns.","General Non-Compete Agreement","1",30,"https://templates.business-in-a-box.com/imgs/1000px/general-non-compete-agreement-D882.png","https://templates.business-in-a-box.com/imgs/250px/882.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#882.xml",{"title":6,"description":6},[145,146],{"label":32,"url":103},{"label":32,"url":103},"general non compete agreement","/template/general-non-compete-agreement-D882",{"description":150,"descriptionCustom":6,"label":151,"pages":152,"size":153,"extension":10,"preview":154,"thumb":155,"svgFrame":156,"seoMetadata":157,"parents":158,"keywords":162,"url":163},"INDEPENDENT CONTRACTOR AGREEMENT This Independent Contractor Agreement (\"Agreement\") is made and effective [Date], BETWEEN: [INDEPENDENT CONTRACTOR NAME] (the \"Independent Contractor\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] RECITALS Independent Contractor is engaged in providing [Describe] business services, its Employer Tax I.D. Number is [Insert], and its Business License Number is [insert]. Independent Contractor has complied with all Federal, State, and local laws regarding business permits, sales permits, licenses, reporting requirements, tax withholding requirements, and other legal requirements of any kind that may be required to carry out said business and the Scope of Work which is to be performed as an Independent Contractor pursuant to this Agreement. Independent Contractor is or remains open to conducting similar tasks or activities for clients other than the Company and holds themselves out to the public to be a separate business entity. Company desires to engage and contract for the services of the Independent Contractor to perform certain tasks as set forth below. Independent Contractor desires to enter into this Agreement and perform as an independent contractor for the company and is willing to do so on the terms and conditions set forth below. NOW, THEREFORE, in consideration of the above recitals and the mutual promises and conditions contained in this Agreement, the Parties agree as follows: TERMS This Agreement shall be effective commencing [Date], and shall continue until terminated at the completion of the Scope of Work which shall occur no later than [Date] or by either party as otherwise provided herein. STATUS OF INDEPENDENT CONTRACTOR This Agreement does not constitute a hiring by either party. It is the parties intentions that Independent Contractor shall have an independent contractor status and not be an employee for any purposes, including, but not limited to, [laws]. Independent Contractor shall retain sole and absolute discretion in the manner and means of carrying out their activities and responsibilities under this Agreement. This Agreement shall not be considered or construed to be a partnership or joint venture, and the Company shall not be liable for any obligations incurred by Independent Contractor unless specifically authorized in writing. Independent Contractor shall not act as an agent of the Company, ostensibly or otherwise, nor bind the Company in any manner, unless specifically authorized to do so in writing. TASKS, DUTIES, AND SCOPE OF WORK Independent Contractor agrees to devote as much time, attention, and energy as necessary to complete or achieve the following: [Describe]. The above to be referred to in this Agreement as the \"Scope of Work\". It is expected that the Scope of Work will completed by [Date]. Independent Contractor shall additionally perform any and all tasks and duties associated with the Scope of Work set forth above, including but not limited to, work being performed already or related change orders. Independent Contractor shall not be entitled to engage in any activities which are not expressly set forth by this Agreement. The books and records related to the Scope of Work set forth in this Agreement shall be maintained by the Independent Contractor at the Independent Contractor's principal place of business and open to inspection by Company during regular working hours. Documents to which Company will be entitled to inspect include, but are not limited to, any and all contract documents, change orders/purchase orders and work authorized by Independent Contractor or Company on existing or potential projects related to this Agreement. Independent Contractor shall be responsible to the management and directors of Company, but Independent Contractor will not be required to follow or establish a regular or daily work schedule. Supply all necessary equipment, materials and supplies. Independent Contractor will not rely on the equipment or offices of Company for completion of tasks and duties set forth pursuant to this Agreement. Any advice given Independent Contractors regarding the scope of work shall be considered a suggestion only, not an instruction. Company retains the right to inspect, stop, or alter the work of Independent Contractor to assure its conformity with this Agreement. ASSURANCE OF SERVICES Independent Contractor will assure that the following individuals (the \"Key Employees\") will be available to perform, and will perform, the Services hereunder until they are completed (identify by title and name as applicable): [Name of Key Employee, Title] [Name of Key Employee, Title] The Key Employees may be changed only with the prior written approval of the Company, which approval shall not be unreasonably withheld. COMPENSATION Independent Contractor shall be entitled to compensation for performing those tasks and duties related to the Scope of Work as follows: [Describe] Such compensation shall become due and payable to Independent Contractor in the following time, place, and manner: [Describe] NOTICE CONCERNING WITHHOLDING OF TAXES Independent Contractor recognizes and understands that it will receive a [specify tax] statement and related tax statements, and will be required to file corporate and/or individual tax returns and to pay taxes in accordance with all provisions of applicable Federal and State law. Independent Contractor hereby promises and agrees to indemnify the Company for any damages or expenses, including attorney's fees, and legal expenses, incurred by the Company as a result of independent contractor's failure to make such required payments. AGREEMENT TO WAIVE RIGHTS TO BENEFITS Independent Contractor hereby waives and foregoes the right to receive any benefits given by Company to its regular employees, including, but not limited to, health benefits, vacation and sick leave benefits, profit sharing plans, etc. This waiver is applicable to all non-salary benefits which might otherwise be found to accrue to the Independent Contractor by virtue of their services to Company, and is effective for the entire duration of Independent Contractor's agreement with Company. This waiver is effective independently of Independent Contractor's employment status as adjudged for taxation purposes or for any other purpose. Neither this Agreement, nor any duties or obligations under this Agreement may be assigned by either party without the consent of the other. TERMINATION This Agreement may be terminated prior to the completion or achievement of the Scope of Work by either party giving [number] days written notice. Such termination shall not prejudice any other remedy to which the terminating party may be entitled, either by law, in equity, or under this Agreement. NON-DISCLOSURE OF TRADE SECRETS, CUSTOMER LISTS AND OTHER PROPRIETARY INFORMATION Independent Contractor agrees not to disclose or communicate, in any manner, either during or after Independent Contractor's agreement with Company, information about Company, its operations, clientele, or any other information, that relate to the business of Company including, but not limited to, the names of its customers, its marketing strategies, operations, or any other information of any kind which would be deemed confidential, a trade secret, a customer list, or other form of proprietary information of Company. Independent Contractor acknowledges that the above information is material and confidential and that it affects the profitability of Company. ","Independent Contractor Agreement","6",62,"https://templates.business-in-a-box.com/imgs/1000px/independent-contractor-agreement-D160.png","https://templates.business-in-a-box.com/imgs/250px/160.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#160.xml",{"title":6,"description":6},[159],{"label":160,"url":161},"Consultant & Contractors","consulting-contractor-business","independent contractor agreement","/template/independent-contractor-agreement-D160",{"description":165,"descriptionCustom":6,"label":166,"pages":138,"size":167,"extension":10,"preview":168,"thumb":169,"svgFrame":170,"seoMetadata":171,"parents":172,"keywords":175,"url":176},"ADHESION TO THE UNANIMOUS SHAREHOLDER AGREEMENT I, [INDIVIDUAL NAME], domiciled and residing at [FULL ADDRESS], declare that: As of today, I subscribe to [NUMBER] class [SPECIFY] shares issued from the share-capital of [COMPANY NAME]; I have examined the Unanimous Shareholders Agreement and I am satisfied of its content and acknowledge that a copy of such documents has been remitted to me;","Adhesion to the Unanimous Shareholder Agreement",41,"https://templates.business-in-a-box.com/imgs/1000px/adhesion-to-the-unanimous-shareholder-agreement-D848.png","https://templates.business-in-a-box.com/imgs/250px/848.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#848.xml",{"title":6,"description":6},[173,174],{"label":32,"url":103},{"label":32,"url":103},"adhesion to unanimous shareholder agreement","/template/adhesion-to-the-unanimous-shareholder-agreement-D848",false,{"seo":179,"reviewer":188,"legal_disclaimer":192,"quick_facts":193,"at_a_glance":195,"personas":199,"variants":224,"glossary":251,"clauses":285,"how_to_fill":334,"common_mistakes":375,"faqs":400,"industries":428,"comparisons":453,"diy_vs_lawyer":466,"jurisdictions":479,"related_template_ids_curated":500,"schema":512,"classification":513},{"meta_title":180,"meta_description":181,"primary_keyword":182,"secondary_keywords":183},"Phantom Stock Agreement Template | BIB","Free phantom stock agreement template for granting equity-like compensation without issuing real shares. Download in Word, edit online, or export as PDF.","phantom stock agreement template",[15,184,185,186,187],"phantom stock agreement word","phantom shares agreement template","shadow stock agreement template","phantom stock agreement free download",{"name":189,"credential":190,"reviewed_date":191},"Bruno Goulet","CEO, Business in a Box","2026-05-02",true,{"difficulty":194,"legal_review_recommended":192,"signature_required":192,"notarization_required":177},"advanced",{"what_it_is":196,"when_you_need_it":197,"whats_inside":198},"A Phantom Stock Agreement is a legally binding compensation contract between a company and a key employee or contractor that grants the right to receive a cash payment equal to the value of a specified number of company shares — without actually issuing real equity. This free Word download lets you define vesting schedules, trigger events, payout formulas, and tax treatment in a single document you can edit online and export as PDF.\n","Use it when you want to incentivize and retain key employees with equity-like upside but cannot or do not want to dilute existing shareholders, complicate your cap table, or grant voting rights. It is also commonly used by S-corporations and family businesses that are restricted from issuing new classes of equity.\n","Grant details and phantom unit count, vesting schedule with cliff and graded provisions, triggering events for payout (sale, IPO, retirement, or death), valuation methodology, tax withholding obligations, forfeiture conditions, confidentiality, and governing law.\n",[200,204,208,212,216,220],{"title":201,"use_case":202,"icon_asset_id":203},"Private company founders","Rewarding senior hires with equity-like upside without diluting the cap table","persona-startup-founder",{"title":205,"use_case":206,"icon_asset_id":207},"HR directors and compensation committees","Structuring a long-term incentive plan for executives below the C-suite","persona-hr-manager",{"title":209,"use_case":210,"icon_asset_id":211},"Family business owners","Retaining non-family key employees without granting ownership or voting rights","persona-small-business-owner",{"title":213,"use_case":214,"icon_asset_id":215},"S-corporation operators","Providing equity-linked compensation while preserving single-class stock requirements","persona-ceo",{"title":217,"use_case":218,"icon_asset_id":219},"Private equity-backed management teams","Supplementing management incentive plans with phantom units tied to exit proceeds","persona-operations-director",{"title":221,"use_case":222,"icon_asset_id":223},"Startup CFOs","Documenting phantom equity grants formally to reduce liability and ensure tax compliance","persona-cfo",[225,228,232,236,240,243,247],{"situation":226,"recommended_template":7,"slug":227},"Granting equity-like incentive without any real shares to an employee","phantom-stock-agreement-D12853",{"situation":229,"recommended_template":230,"slug":231},"Granting appreciation rights only above a set base value","Stock Appreciation Rights (SAR) Agreement","rights-agreement-D13037",{"situation":233,"recommended_template":234,"slug":235},"Granting actual stock options with a right to purchase real shares","Stock Option Agreement","employee-stock-option-agreement-D12613",{"situation":237,"recommended_template":238,"slug":239},"Issuing real equity shares to a founding team member or key employee","Restricted Stock Agreement","restricted-stock-purchase-agreement-D12855",{"situation":241,"recommended_template":43,"slug":242},"Establishing a company-wide phantom equity incentive plan document","phantom-stock-plan-D13748",{"situation":244,"recommended_template":245,"slug":246},"Deferring compensation for an executive without equity linkage","Deferred Compensation Agreement","deferred-compensation-agreement-D13830",{"situation":248,"recommended_template":249,"slug":250},"Granting a profit interest to a key employee of an LLC","Profits Interest Agreement","llc-membership-interest-purchase-agreement-D5208",[252,255,258,261,264,267,270,273,276,279,282],{"term":253,"definition":254},"Phantom Stock Unit","A notional unit representing the equivalent of one real share of company stock, used solely to calculate a cash payout — no actual ownership is conveyed.",{"term":256,"definition":257},"Vesting Schedule","The timeline over which a participant earns the right to their phantom units, typically including a cliff period before any units vest and a graded schedule thereafter.",{"term":259,"definition":260},"Cliff Vesting","A vesting structure where no units vest until a specified date — often one year — after which a lump sum of units vests at once.",{"term":262,"definition":263},"Triggering Event","A defined event — such as a company sale, IPO, retirement, death, or disability — that activates the obligation to pay out vested phantom units.",{"term":265,"definition":266},"Valuation Methodology","The agreed formula or process used to determine the per-unit cash value at payout — commonly a fixed formula, trailing EBITDA multiple, or independent third-party appraisal.",{"term":268,"definition":269},"Double Trigger","An acceleration provision requiring two events to occur — typically a change of control and an involuntary termination — before unvested units accelerate and become payable.",{"term":271,"definition":272},"409A Valuation","An independent appraisal of a private company's common stock fair market value required by Section 409A of the Internal Revenue Code to set deferred compensation terms and avoid punitive taxes.",{"term":274,"definition":275},"NQDC (Nonqualified Deferred Compensation)","A category of compensation arrangement, including phantom stock, subject to specific IRS rules under IRC Section 409A governing timing of elections, payment, and acceleration.",{"term":277,"definition":278},"Forfeiture","The cancellation of unvested or even vested phantom units upon the occurrence of a specified event, such as termination for cause or breach of a restrictive covenant.",{"term":280,"definition":281},"Change of Control","A transaction — such as a merger, acquisition, or sale of substantially all assets — that triggers a change in majority ownership and often activates phantom stock payout or acceleration provisions.",{"term":283,"definition":284},"Good Leaver / Bad Leaver","Classifications determining what happens to a participant's phantom units upon departure — a good leaver (resignation for cause, retirement, death) typically retains vested units while a bad leaver (termination for cause) forfeits them.",[286,291,295,299,304,309,314,319,324,329],{"name":287,"plain_english":288,"sample_language":289,"common_mistake":290},"Grant of Phantom Units","States how many phantom stock units are granted to the participant, the grant date, and confirms no actual shares or ownership rights are being conveyed.","Effective [GRANT DATE], the Company grants to Participant [NUMBER] Phantom Stock Units ('Units'). Units represent only an unfunded, unsecured right to receive a cash payment as set forth herein and do not constitute actual shares of capital stock or ownership interest in [COMPANY NAME].","Omitting explicit language that no actual equity is being granted. Without it, a participant may later claim they hold real shares, especially on a company sale or during a dispute.",{"name":256,"plain_english":292,"sample_language":293,"common_mistake":294},"Sets out the timeline for earning the right to phantom units, including any cliff period and graded vesting milestones.","Units shall vest as follows: [X]% on the first anniversary of the Grant Date ('Cliff'), and [Y]% on each of the [SECOND / THIRD / FOURTH] anniversary thereafter, subject to continued employment on each vesting date.","Using only time-based vesting with no performance condition for senior roles. Time-only vesting pays out even for under-performers; adding a performance modifier ties the incentive to actual results.",{"name":265,"plain_english":296,"sample_language":297,"common_mistake":298},"Defines how the per-unit cash value will be calculated at the time of payout — whether by formula, EBITDA multiple, board determination, or independent appraisal.","The value per Unit shall equal the per-share fair market value of one share of [COMPANY NAME] Common Stock as of the Valuation Date, determined by [a trailing 12-month EBITDA multiplied by [X] / an independent third-party appraisal / the Board's good-faith determination].","Leaving valuation methodology vague or subject to unilateral board discretion without any formula guardrails. This invites disputes at payout — especially on a company sale where buyer and seller interests diverge.",{"name":300,"plain_english":301,"sample_language":302,"common_mistake":303},"Triggering Events and Payment","Specifies the events that cause vested units to be paid out and sets the payment timing and method after each trigger.","Vested Units shall be settled in cash within [60] days following the earliest of: (a) a Change of Control; (b) the Participant's retirement after age [65]; (c) the Participant's death or Disability; or (d) [DATE / FISCAL YEAR END], subject to Section 409A.","Listing a Change of Control as the only trigger. If the company never sells, participants receive nothing regardless of tenure — destroying the retention benefit the agreement was meant to create.",{"name":305,"plain_english":306,"sample_language":307,"common_mistake":308},"Change of Control Acceleration","Describes whether unvested units accelerate and vest immediately on a change of control, or whether a double-trigger (change of control plus involuntary termination) is required.","Upon a Change of Control, [all / [X]% of] unvested Units shall immediately vest ('Single Trigger'). Alternatively: unvested Units shall vest only if Participant's employment is involuntarily terminated within [12] months following a Change of Control ('Double Trigger').","Defaulting to single-trigger acceleration without considering the acquirer's perspective. Buyers routinely reprice or renegotiate deals when all phantom units immediately vest on signing — double-trigger is often less disruptive to a transaction.",{"name":310,"plain_english":311,"sample_language":312,"common_mistake":313},"Tax Withholding and 409A Compliance","Confirms the company will withhold applicable taxes on payout, requires the agreement to comply with IRC Section 409A, and allocates risk of tax penalties to the participant.","The Company shall withhold from any cash payment all federal, state, and local income and payroll taxes required by applicable law. This Agreement is intended to comply with Section 409A of the Code and shall be interpreted accordingly. Any taxes, penalties, or interest arising from non-compliance shall be borne solely by Participant.","No 409A compliance clause at all. Phantom stock is nonqualified deferred compensation subject to Section 409A — a non-compliant plan exposes participants to a 20% additional federal income tax plus interest on the full deferred amount.",{"name":315,"plain_english":316,"sample_language":317,"common_mistake":318},"Forfeiture and Good Leaver / Bad Leaver Provisions","States which departure scenarios result in forfeiture of unvested — or even vested — units, and which allow the participant to retain their earned benefit.","Upon termination for Cause, all Units (vested and unvested) shall be immediately forfeited. Upon voluntary resignation or termination without Cause, vested Units shall [be retained and paid at the next scheduled payment date / be forfeited], and unvested Units shall be forfeited.","Forfeiting vested units on any termination without distinguishing cause from no-cause. Courts in several jurisdictions have found blanket vested-unit forfeiture clauses to be an unlawful penalty — retain vested units for good leavers to reduce litigation risk.",{"name":320,"plain_english":321,"sample_language":322,"common_mistake":323},"Confidentiality and Non-Disparagement","Requires the participant to keep the terms of the phantom stock agreement confidential and prohibits statements that harm the company's reputation.","Participant shall keep the existence and terms of this Agreement strictly confidential and shall not disclose them to any third party without the Company's prior written consent, except to Participant's legal or tax advisors. Participant agrees not to make any disparaging statements regarding the Company or its officers.","No confidentiality clause at all. Other employees learning the grant size and valuation methodology can trigger demands for equivalent grants or fuel internal equity disputes.",{"name":325,"plain_english":326,"sample_language":327,"common_mistake":328},"Restrictive Covenants Cross-Reference","Links the phantom stock grant to the participant's existing non-compete, non-solicitation, or other restrictive covenant obligations, making compliance a condition of payment.","Payment of any amount hereunder is conditioned upon Participant's compliance with any non-competition, non-solicitation, and confidentiality obligations set forth in Participant's Employment Agreement dated [DATE]. Breach of such obligations shall result in immediate forfeiture of all unpaid amounts.","Granting phantom units without cross-referencing the employment agreement's restrictive covenants. A departing employee who joins a competitor can collect their phantom payout and compete — unless forfeiture on breach is explicitly stated.",{"name":330,"plain_english":331,"sample_language":332,"common_mistake":333},"Governing Law, Amendment, and Entire Agreement","Identifies the governing jurisdiction, confirms the agreement can only be modified in writing, and states that it supersedes all prior representations about phantom equity.","This Agreement shall be governed by the laws of [STATE / PROVINCE / COUNTRY]. It may be amended only by a written instrument signed by both parties. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior representations, promises, or understandings.","No entire-agreement clause. Verbal promises made during recruitment — 'you'll share in any exit' — can be introduced as additional obligations if the written document does not explicitly displace prior representations.",[335,340,345,350,355,360,365,370],{"step":336,"title":337,"description":338,"tip":339},1,"Identify the parties and grant details","Enter the company's full legal name, the participant's legal name and job title, the grant date, and the number of phantom units being granted. Confirm the entity type — the tax treatment differs between C-corporations, S-corporations, and LLCs.","For LLCs, consider a profits interest agreement instead of phantom stock — it may offer more favorable tax treatment for the participant.",{"step":341,"title":342,"description":343,"tip":344},2,"Set the vesting schedule and cliff period","Choose a vesting structure — typically a one-year cliff followed by monthly or annual graded vesting over three or four years. Decide whether vesting is purely time-based or includes performance milestones tied to revenue, EBITDA, or other KPIs.","A four-year vest with a one-year cliff mirrors standard equity option plans and is familiar to employees who have worked at venture-backed companies.",{"step":346,"title":347,"description":348,"tip":349},3,"Define the valuation methodology","Select a valuation formula that is objective and clearly defined — a trailing EBITDA multiple, a revenue multiple, or a requirement for an independent appraisal. Avoid language that gives the board sole discretion without a formula floor.","If you use an EBITDA multiple, specify whether it is the trailing 12-month or the projected forward-12-month figure, and name the source for any external multiple benchmark.",{"step":351,"title":352,"description":353,"tip":354},4,"List all triggering events with payment timelines","Include at least three triggers — change of control, retirement, and a scheduled liquidity date — so the agreement provides real retention value even if a sale never occurs. Set a specific payment window (e.g., within 60 days of the trigger) to satisfy Section 409A timing requirements.","Section 409A generally requires a 'specified time or schedule' for payment. Vague language like 'promptly after a trigger' can make the plan non-compliant.",{"step":356,"title":357,"description":358,"tip":359},5,"Choose single-trigger or double-trigger acceleration","Decide whether a change of control alone accelerates unvested units (single trigger) or whether acceleration requires both a sale and an involuntary termination within a defined window (double trigger). Document your choice explicitly.","Double-trigger acceleration is generally preferred by acquirers and reduces the risk that your phantom plan becomes a deal-stopper in an M&A transaction.",{"step":361,"title":362,"description":363,"tip":364},6,"Draft the forfeiture and leaver provisions","Specify which departure scenarios are 'good leaver' (retain vested units) versus 'bad leaver' (forfeit all units). Include termination for cause, voluntary resignation, death, disability, and retirement as separate defined scenarios.","Have your employment lawyer confirm that any vested-unit forfeiture on good-leaver departures is enforceable in your jurisdiction — courts in some states treat vested deferred compensation as a wage claim.",{"step":366,"title":367,"description":368,"tip":369},7,"Add the 409A compliance clause and obtain a 409A valuation if required","Include explicit Section 409A compliance language and, if the company does not already have a current 409A valuation, commission one from a qualified independent appraiser before the grant date.","A 409A valuation for a private company typically costs $2,000–$5,000 and is valid for 12 months or until a material event. It protects both the company and the participant.",{"step":371,"title":372,"description":373,"tip":374},8,"Execute before the participant begins relying on the grant","Both parties must sign the agreement before the participant makes any employment or financial decisions in reliance on the phantom grant. Late execution can create fresh-consideration problems under common law and Section 409A timing issues.","Store the fully executed copy in a secure HR or legal file and provide a countersigned copy to the participant on the day of signing.",[376,380,384,388,392,396],{"mistake":377,"why_it_matters":378,"fix":379},"No Section 409A compliance language","Phantom stock is nonqualified deferred compensation. A plan that fails 409A subjects the participant to a 20% additional federal income tax plus interest on the entire deferred balance — not just the current year's accrual.","Include an explicit 409A compliance clause, specify a defined payment schedule tied to an enumerated triggering event, and obtain a 409A valuation from a qualified independent appraiser before the grant date.",{"mistake":381,"why_it_matters":382,"fix":383},"Vague or board-only valuation methodology","When the company is sold or a participant exits, a valuation formula that says 'as determined by the board in its sole discretion' invites litigation — especially if the board has a financial interest in minimizing the payout.","Anchor valuation to an objective formula — trailing EBITDA multiple, revenue multiple, or a required independent appraisal — and state the formula explicitly in the agreement.",{"mistake":385,"why_it_matters":386,"fix":387},"Change of control as the sole triggering event","If the company never sells, participants wait indefinitely and the retention incentive evaporates. Long-tenured employees who never see a payout are more likely to leave, not less.","Add at least two additional triggers — a fixed scheduled payment date and a retirement or long-service trigger — so the plan provides value regardless of whether a liquidity event occurs.",{"mistake":389,"why_it_matters":390,"fix":391},"Forfeiting vested units on any departure","Courts in several US states and Canadian provinces treat vested deferred compensation as an earned wage. Blanket forfeiture of vested units — even on voluntary resignation — has been successfully challenged as an unlawful withholding of earned compensation.","Limit forfeiture of vested units to termination for cause or breach of a restrictive covenant. Unvested units may be forfeited on any departure — but vested units typically should be retained by a good leaver.",{"mistake":393,"why_it_matters":394,"fix":395},"No cross-reference to restrictive covenants","Without tying payout to compliance with non-compete and non-solicit obligations, a departing executive can collect their full phantom payout and immediately join a competitor or solicit your clients.","Include a condition-of-payment clause that explicitly links all unpaid phantom amounts to compliance with the participant's existing restrictive covenant obligations, with forfeiture as the remedy for breach.",{"mistake":397,"why_it_matters":398,"fix":399},"Granting phantom stock to S-corporation shareholders","Phantom stock payments to existing S-corporation shareholders may be recharacterized as dividends or distributions, disrupting the single-class-of-stock requirement and potentially terminating S-corp status.","Restrict phantom stock grants to non-shareholder employees in an S-corporation context and have tax counsel confirm the plan structure before execution.",[401,404,407,410,413,416,419,422,425],{"question":402,"answer":403},"What is a phantom stock agreement?","A phantom stock agreement is a legally binding contract between a company and a key employee granting the right to receive a future cash payment equal to the value of a specified number of company shares — without issuing actual equity. The participant enjoys equity-like upside and downside tied to company value without becoming a shareholder, receiving voting rights, or appearing on the cap table. It is commonly used by private companies, family businesses, and S-corporations that want to retain key talent without diluting ownership.\n",{"question":405,"answer":406},"What is the difference between phantom stock and stock options?","A stock option grants the right to purchase actual company shares at a fixed exercise price — the employee becomes a real shareholder upon exercise. Phantom stock grants a contractual right to a cash payment equal to share value — no real shares are ever issued, and the participant never becomes an owner. Phantom stock avoids cap table complexity, does not require a shareholders' agreement amendment, and does not grant voting rights. Stock options may offer more favorable long-term capital gains treatment for participants in some jurisdictions; phantom stock payouts are taxed as ordinary income.\n",{"question":408,"answer":409},"Is phantom stock taxable?","Yes. In the United States, phantom stock is treated as nonqualified deferred compensation under IRC Section 409A. The participant pays ordinary income tax — not capital gains tax — on the full payout amount in the year of receipt. The company is entitled to a corresponding deduction in the same year. FICA payroll taxes also apply. To avoid an additional 20% tax penalty, the plan must strictly comply with Section 409A's timing, election, and payment rules. Participants and companies should each obtain independent tax advice before execution.\n",{"question":411,"answer":412},"Does phantom stock affect the company's cap table?","No. Phantom stock creates no actual ownership interest and does not appear on the cap table. The company records the obligation as a liability on its balance sheet — which grows as company value increases — but no shares are issued, no shareholder register is amended, and no voting rights are created. This is one of the primary advantages of phantom stock over real equity grants for private companies managing investor relationships or anticipating a future capital raise.\n",{"question":414,"answer":415},"Can an S-corporation use phantom stock?","An S-corporation can use phantom stock, but must do so carefully. Phantom stock grants to existing shareholders risk being treated as a second class of stock, which would terminate S-corp status under the single-class-of-stock requirement. For this reason, phantom stock in S-corporations is typically restricted to non-shareholder employees. Tax counsel should review any phantom plan before execution in an S-corp context.\n",{"question":417,"answer":418},"What triggers payment under a phantom stock agreement?","Triggering events are defined in the agreement and typically include a change of control (sale, merger, or IPO), the participant's retirement after a defined age, death or disability, or a scheduled payment date. Including multiple triggers is important — a plan with only a change-of-control trigger provides no benefit if the company never sells, and a plan with only a fixed date trigger provides no upside acceleration on a lucrative exit. Well-drafted agreements include at least three enumerated triggers to cover the range of outcomes.\n",{"question":420,"answer":421},"What is a 409A valuation and does my phantom stock plan need one?","A 409A valuation is an independent appraisal of a private company's common stock fair market value, required by the IRS to set compliant deferred compensation terms under IRC Section 409A. Phantom stock plans that tie payout to share fair market value should be supported by a current 409A valuation to establish a defensible grant-date value and avoid the 20% additional tax penalty that applies to non-compliant deferred compensation. Valuations typically cost $2,000–$5,000 and are valid for 12 months or until a material event such as a new funding round or acquisition.\n",{"question":423,"answer":424},"What happens to phantom stock if the company is acquired?","If the agreement includes a change-of-control trigger, vested phantom units are paid out based on the per-share acquisition price — giving participants the same economic upside as a real shareholder at exit. Unvested units may accelerate on a single-trigger basis (change of control alone) or on a double-trigger basis (change of control plus involuntary termination). The specific mechanics depend on what the agreement says. In most acquisitions, the acquirer will want to know the total phantom stock liability before closing, so a properly documented plan is critical to a clean transaction process.\n",{"question":426,"answer":427},"Do I need a lawyer to draft a phantom stock agreement?","Given the Section 409A compliance requirements, the valuation methodology complexity, and the potential for significant financial liability at payout, legal review is strongly recommended for any phantom stock plan. A high-quality template covers the structural framework, but a tax attorney or employment lawyer familiar with executive compensation should review the final document before execution — particularly for senior hires, large unit grants, or cross-border arrangements. Template-plus-review typically costs $500–$1,500 and is worthwhile given the stakes.\n",[429,433,437,441,445,449],{"industry":430,"icon_asset_id":431,"specifics":432},"Technology / SaaS","industry-saas","Phantom stock supplements real option grants for mid-level engineers and product managers who fall below the equity participation threshold, with valuation tied to ARR multiples or a 409A appraisal.",{"industry":434,"icon_asset_id":435,"specifics":436},"Professional Services","industry-professional-services","Law firms, consulting firms, and accounting practices use phantom stock to retain senior non-partner professionals with exit upside linked to firm revenue or EBITDA multiples without admitting them to partnership.",{"industry":438,"icon_asset_id":439,"specifics":440},"Manufacturing","industry-manufacturing","Family-owned manufacturers use phantom stock to compensate non-family operations executives with exit-linked upside while preserving full ownership within the family — common pre-succession planning tool.",{"industry":442,"icon_asset_id":443,"specifics":444},"Financial Services","industry-fintech","Private equity-backed financial services firms use phantom units to align management team incentives with fund exit timelines, with payout calculated on a realized-proceeds formula tied to the PE sponsor's distribution waterfall.",{"industry":446,"icon_asset_id":447,"specifics":448},"Healthcare","industry-healthtech","Medical practices and healthcare groups use phantom stock to retain non-physician executives and administrators with equity-like incentives without triggering physician self-referral or corporate practice of medicine restrictions.",{"industry":450,"icon_asset_id":451,"specifics":452},"Retail / Franchising","industry-retail","Multi-unit franchise operators award phantom stock to general managers and district supervisors, with valuation based on store-level EBITDA multiples, to reduce management turnover without transferring franchise licenses.",[454,457,460,463],{"vs":234,"vs_template_id":455,"summary":456},"stock-option-agreement-D12850","A stock option agreement grants the right to purchase actual company shares at a fixed price — the employee becomes a real shareholder. Phantom stock grants only a contractual cash right with no real ownership. Options offer potential long-term capital gains treatment; phantom payouts are ordinary income. Phantom stock avoids cap table complexity and shareholder agreement amendments that options typically require.",{"vs":238,"vs_template_id":458,"summary":459},"D{RESTRICTED_STOCK_ID}","A restricted stock agreement transfers actual shares to the employee subject to vesting restrictions. The employee becomes a real owner with voting rights and potential 83(b) election benefits for capital gains treatment. Phantom stock creates no ownership — it is purely a cash obligation. For companies unwilling to dilute the cap table or grant voting rights, phantom stock is the appropriate tool.",{"vs":249,"vs_template_id":461,"summary":462},"D{PROFITS_INTEREST_ID}","A profits interest agreement is specific to LLCs and grants a real ownership interest in future appreciation and profits — often with pass-through tax treatment more favorable than phantom stock's ordinary income taxation. Phantom stock applies across all entity types and creates a balance-sheet liability rather than a capital account. LLCs should evaluate both structures with tax counsel before choosing.",{"vs":245,"vs_template_id":464,"summary":465},"D{DEFERRED_COMP_ID}","A deferred compensation agreement postpones the payment of earned wages to a future date — the amount owed is fixed or formula-based but not linked to company equity value. Phantom stock ties the payout directly to company valuation, giving the participant upside if the business grows. Both are governed by Section 409A, but phantom stock adds equity-like incentive alignment that deferred compensation alone does not provide.",{"use_template":467,"template_plus_review":471,"custom_drafted":475},{"best_for":468,"cost":469,"time":470},"Small private companies granting modest phantom unit awards to one or two key employees in a domestic, single-jurisdiction arrangement","Free","1–2 hours",{"best_for":472,"cost":473,"time":474},"Companies with multiple participants, cross-border employees, S-corporation structure, or grants exceeding $100,000 in projected value","$500–$1,500","3–7 days",{"best_for":476,"cost":477,"time":478},"PE-backed companies, large executive grants, complex valuation waterfalls, or multi-jurisdiction plans requiring bespoke 409A and employment law coordination","$3,000–$10,000+","2–4 weeks",[480,485,490,495],{"code":481,"name":482,"flag_asset_id":483,"note":484},"us","United States","flag-us","Phantom stock is nonqualified deferred compensation subject to IRC Section 409A. Non-compliant plans trigger a 20% additional federal income tax plus interest on the entire deferred balance in the year of vesting. Payouts are taxed as ordinary income and subject to FICA. S-corporations must ensure phantom grants do not create a second class of stock. State income tax treatment varies — California taxes deferred compensation at time of payment regardless of the employee's state of residence at grant.",{"code":486,"name":487,"flag_asset_id":488,"note":489},"ca","Canada","flag-ca","Phantom stock plans in Canada are generally taxed under the employee benefit rules in the Income Tax Act — payouts are included in employment income in the year received and subject to income tax and CPP withholding. There is no direct Canadian equivalent of Section 409A, but CRA scrutinizes deferred compensation arrangements for potential salary deferral benefit inclusions. Quebec residents are subject to provincial income tax on top of federal obligations. Employment standards legislation in each province may affect forfeiture provisions.",{"code":491,"name":492,"flag_asset_id":493,"note":494},"uk","United Kingdom","flag-uk","Phantom stock arrangements in the UK are subject to income tax and National Insurance Contributions (NICs) on payout under the employment income rules. HMRC does not recognize phantom stock as an approved share plan, so no capital gains treatment or income tax relief is available — payouts are fully taxable as earnings. The employer must operate PAYE on the payout. Post-employment restrictive covenants linked to forfeiture must meet the UK's reasonableness standard to be enforceable. IR35 considerations apply if the participant provides services through a personal service company.",{"code":496,"name":497,"flag_asset_id":498,"note":499},"eu","European Union","flag-eu","EU member states treat phantom stock payouts as employment income subject to local income tax and social security contributions, with no harmonized framework across the bloc. Germany, France, and the Netherlands each have distinct rules on deferred compensation timing and social charge obligations. GDPR applies to personal data processed in connection with plan administration. Post-employment forfeiture conditions linked to non-compete obligations are subject to member state-specific enforceability rules — Germany and France, for example, require financial compensation to the employee for enforceable post-employment non-competes, which can interact with phantom stock forfeiture provisions.",[235,501,502,503,504,505,506,507,508,509,510,511],"employment-agreement-executive-D543","employment-agreement_at-will-employee-D541","non-disclosure-agreement-nda-D12692","general-non-compete-agreement-D882","independent-contractor-agreement-D160","adhesion-to-the-unanimous-shareholder-agreement-D848","llc-operating-agreement-D5209","job-offer-letter-long-D12769","employee-handbook-D712","employee-dismissal-letter-D508","business-report-D12762",{"emit_how_to":192,"emit_defined_term":192},{"primary_folder":103,"secondary_folder":514,"document_type":515,"industry":516,"business_stage":517,"tags":518,"confidence":524},"equity-and-mergers","agreement","general","growth",[519,520,521,522,523],"phantom-stock","equity-compensation","vesting-schedule","employee-retention","incentive-plan",0.92,"\u003Ch2>What is a Phantom Stock Agreement?\u003C/h2>\n\u003Cp>A \u003Cstrong>Phantom Stock Agreement\u003C/strong> is a legally binding compensation contract between a company and a key employee or contractor that grants the right to receive a future cash payment calculated as if the recipient held a specified number of real company shares — without actually issuing equity, transferring ownership, or creating shareholder rights. The participant benefits financially when company value increases, but they never appear on the cap table, hold no voting rights, and have no claim to dividends or assets. The company records the obligation as a balance-sheet liability rather than an equity dilution event. Phantom stock is classified as nonqualified deferred compensation under US tax law and governed by IRC Section 409A, which imposes strict rules on payment timing and plan structure that must be satisfied to avoid punitive tax penalties.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>Without a written phantom stock agreement, verbal promises of equity-like participation are unenforceable and create exposure from both directions: the employee may claim a larger share than intended, or the company may attempt to walk back a promise that the employee made career decisions in reliance upon. A properly drafted agreement defines exactly how many units were granted, when they vest, how the payout is calculated, what events trigger payment, and what happens when the participant leaves — eliminating the ambiguity that drives expensive disputes at precisely the moment a company is most vulnerable, such as during an acquisition or leadership transition. The Section 409A compliance provisions protect the participant from a 20% additional federal tax penalty on the full deferred balance. The forfeiture and restrictive covenant cross-reference clauses protect the company from paying out a departing executive who immediately joins a competitor. This template gives you a defensible, structured starting point — and professional legal review before execution ensures the plan holds up when the stakes are real.\u003C/p>\n",1778696273515]