Document background
The Phantom Share Agreement is utilized when companies wish to provide employees with the economic benefits of share ownership without transferring actual equity. This approach is particularly common in private companies, subsidiaries of larger organizations, or situations where actual share transfer is impractical or undesirable. Under Dutch law, these agreements must carefully balance corporate, employment, and tax law considerations. The document typically outlines the grant of phantom shares, vesting conditions, valuation mechanisms, and payment terms, while ensuring compliance with Dutch legal requirements including potential works council consultation. The agreement serves as a crucial tool for talent retention and long-term incentivization, effectively aligning employee interests with company performance without impacting the company's shareholding structure.
