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Phantom Stock Award Agreement Template for India

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Key Requirements PROMPT example:

Phantom Stock Award Agreement

"I need a Phantom Stock Award Agreement for our Series B startup in India, granting 1000 phantom stock units to our new CTO with 4-year vesting starting March 2025, including special provisions for accelerated vesting in case of acquisition."

Document background
The Phantom Stock Award Agreement is designed for companies operating in India who wish to provide their employees with the economic benefits of stock ownership without actually issuing equity shares. This document is particularly useful for private companies, subsidiaries of multinational corporations, or organizations that want to maintain their existing shareholding structure while offering competitive compensation packages. The agreement details the grant of phantom stock units, vesting conditions, valuation methodologies, and payment terms, all while ensuring compliance with Indian corporate laws, tax regulations, and employment legislation. It serves as a crucial tool for employee retention and long-term incentivization, especially for key personnel and senior management.
Suggested Sections

1. Parties: Identification of the Company and the Employee receiving the phantom stock award

2. Background: Context of the phantom stock award program and its purpose

3. Definitions: Definitions of key terms including Phantom Stock Units, Fair Market Value, Vesting Period, Performance Criteria, and other relevant terms

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

5. Vesting Schedule: Specific timeline and conditions for vesting of the phantom stock units

6. Valuation Mechanism: Method and formula for calculating the value of phantom stock units

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

8. Taxation and Compliance: Tax implications and responsibilities of both parties

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

10. Confidentiality: Obligations regarding non-disclosure of agreement terms and company information

11. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

12. General Provisions: Standard legal provisions including amendments, notices, and entire agreement clause

Optional Sections

1. Non-Competition and Non-Solicitation: Additional restrictions on employee activities, recommended for senior employees

2. International Tax Provisions: Required if the employee is an expatriate or if there are cross-border tax implications

3. Change of Control Provisions: Specific provisions dealing with company ownership changes, recommended for private companies

4. Performance Criteria: Detailed performance conditions for vesting, needed if vesting is performance-based rather than time-based

5. Clawback Provisions: Provisions for recovering payments in case of fraud or misconduct, recommended for senior positions

6. Administrative Procedures: Detailed procedures for managing the phantom stock program, recommended for larger programs

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 timeline of vesting dates and quantities

3. Schedule 3 - Valuation Methodology: Detailed formula and process for calculating phantom stock value

4. Appendix A - Tax Treatment Summary: Summary of tax implications and withholding requirements

5. Appendix B - Administrative Forms: Standard forms for exercising rights, making claims, and other administrative actions

6. Appendix C - Performance Criteria: Detailed metrics and targets if vesting is performance-based

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions







































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Relevant Industries

Technology

Financial Services

Professional Services

Manufacturing

Healthcare

Retail

E-commerce

Telecommunications

Consulting

Real Estate

Private Equity

Venture Capital

Relevant Teams

Human Resources

Legal

Finance

Compensation & Benefits

Corporate Secretarial

Executive Leadership

Board Secretariat

Compliance

Corporate Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Senior Vice President

Vice President

Director

Senior Manager

Department Head

Technical Lead

Senior Engineer

Principal Consultant

Key Account Manager

Senior Sales Executive

Regional Manager

Product Manager

Research Lead

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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