This phantom stock plan template has 14 pages and is a MS Word file type listed under our business plan kit documents.
Sample of our phantom stock plan template:
Phantom Stock Plan Your business slogan here. Prepared By: [YOUR NAME] [YOUR JOB TITLE] Phone 555.555.5555 Email info@yourbusiness.com www.yourbusiness.com Table of Contents Summary 4 1. Overview of the Phantom Stock Plan 5 1.1 Establishment 5 1.2 Purpose of the Plan 5 1.3 Definitions 5 2. Plan Structure 8 2.1 Phantom Units Allocation 8 2.2 Vesting Schedule 8 2.3 Performance Metrics 8 3. Payout Mechanism 10 3.1 Triggering Events 10 3.2 Settlement Options 10 4. Benefits and Incentives 11 4.1 Wealth Accumulation 11 4.2 Retirement Planning 11 4.3 Alignment of Interests 11 5. Administrative Considerations 12 5.1 Communication and Education 12 5.2 Tax Implications 12 6. Conclusion and Implementation 13 6.1 Summary of Key Points 13 6.2 Implementation Steps 13 Statement of Confidentiality & Non-Disclosure This document contains proprietary and confidential information. All data submitted to [RECEIVING PARTY] is provided in reliance upon its consent not to use or disclose any information contained herein except in the context of its business dealings with [YOUR COMPANY NAME]. The recipient of this document agrees to inform its present and future employees and partners who view or have access to the document's content of its confidential nature. The recipient agrees to instruct each employee that they must not disclose any information concerning this document to others except to the extent that such matters are generally known to, and are available for use by, the public. The recipient also agrees not to duplicate or distribute or permit others to duplicate or distribute any material contained herein without [YOUR COMPANY NAME]'s express written consent. [YOUR COMPANY NAME] retains all title, ownership and intellectual property rights to the material and trademarks contained herein, including all supporting documentation, files, marketing material, and multimedia. BY ACCEPTANCE OF THIS DOCUMENT, THE RECIPIENT AGREES TO BE BOUND BY THE AFOREMENTIONED STATEMENT. Summary This Phantom Stock Plan is specifically crafted for the benefit of privately held companies seeking to incentivize employee and other service provider performance. The Plan achieves this by granting awards whose value is contingent upon the Company's stock valuation. This comprehensive document offers practical guidance, drafting notes, and a range of optional and alternative clauses to cater to diverse organizational needs. Phantom stock, in essence, symbolizes the Company's unsecured and unfunded commitment to compensate employees or service providers under specific circumstances (such as a change in control or termination of employment). The compensation is equivalent to the value of a predetermined number of Company shares. Alternatively, the Phantom Stock Plan can be structured to tie the award's value to the appreciation in the Company's stock, resembling the principles of stock options or stock appreciation rights. Notably, this template incorporates alternative clauses, allowing its adaptation for both full-value award plans and appreciation-value award plans. 1. Overview of the Phantom Stock Plan 1.1 Establishment [COMPANY NAME] hereby establishes the Phantom Stock Plan effective as of [EFFECTIVE DATE]. 1.2 Purpose of the Plan This Phantom Stock Plan is a form of employee incentive compensation that does not involve the issuance of actual stock. Instead, employees are granted hypothetical or "phantom" shares that mimic the value of real Company shares. The purpose of a Phantom Stock Plan is to align the interests of employees with those of the Company by providing them with a stake in the Company's performance and success. 1.3 Definitions Award Agreement: "Award Agreement" signifies a Phantom Unit Award Agreement in a form authorized by the [COMPANY NAME]'s board. Board: "Board" signifies [COMPANY NAME]'s Board of Directors. Cause: Unless explicitly defined otherwise in a Participant's Employment Agreement, the term "Cause" refers to the transpiring of any of the following events: (i) persistent and willful failure or refusal by a Participant to carry out assigned duties; (ii) indictment, conviction, or a plea of nolo contendere by a Participant for a felony under U.S. law, applicable state law, or a similar offense under non-U.S. law, or any misdemeanor or equivalent offense under non-U.S. law involving moral turpitude; (iii) willful engagement by a Participant in fraud, forgery, theft, misappropriation, or embezzlement; (iv) any other willful misconduct by a Participant that significantly harms the financial condition or business reputation of, or is otherwise materially detrimental to, the Company; or (v) any substantial breach by the Participant of any agreement (including an Award Agreement) to which both the Participant and the Company, or any of its subsidiaries and affiliates, are Parties. Code: "Code" signifies the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder. Disability: "Disability" is defined as a Participant's incapacity to participate in substantial gainful activity due to a medically determinable physical or mental impairment, which is anticipated to result in death or is expected to persist for a continuous period of at least twelve (12) months. Exit Event: "Exit Event" refers to: (i) a shift in the ownership or control of the Company resulting from a transaction or a series of interconnected transactions (excluding a public offering of securities through a registration statement filed with the Securities and Exchange Commission), where any "person" or related "group" of "persons" (as defined in Sections 13(d) and 14(d)(2) of the Exchange Act of 1934, as amended), excluding an affiliate, directly or indirectly acquires beneficial ownership (as per the meaning in Rule 13d-3 under the Exchange Act) of securities representing more than fifty percent (50%) of the total combined voting power of outstanding securities immediately after such acquisition; or (ii) the sale or transfer of all or substantially all of the Company's assets to a person who is not an affiliate. Participant: "Participant" means an individual who gets a Phantom Unit Award under the Plan.
