Phantom Shares Agreement
1. Purpose
This Phantom Shares Agreement (hereinafter referred to as the "Agreement") is entered into as of June 2, 2080, by and between [Your Company Name] (hereinafter referred to as the "Company") and Nadette Ritchie (hereinafter referred to as the "Recipient"). The purpose of this Agreement is to provide the Recipient with certain benefits calculated with reference to the equity of the Company without granting the Recipient any ownership interest or voting rights in the Company.
2. Definitions
2.1. Phantom Shares
"Phantom Shares" refer to notional units that are used solely for the purpose of calculating payments under this Agreement and do not represent any actual ownership, rights, or interests in the actual stock of the Company.
2.2. Vesting Period
"Vesting Period" refers to the time period over which the Phantom Shares will vest in accordance with the provisions set forth in this Agreement.
3. Grant of Phantom Shares
The Company hereby grants to the Recipient a total of 10 Phantom Shares, subject to the terms and conditions set forth in this Agreement.
4. Vesting of Phantom Shares
The Phantom Shares shall vest over a period of four years with a one-year cliff, commencing on the date of this Agreement. Vesting will follow the schedule below:
Year 1 (One-Year Cliff): 25% of the Phantom Shares shall vest on the first anniversary of the date of this Agreement, provided that the Recipient remains engaged with the Company.
Monthly Vesting Thereafter: The remaining 75% of the Phantom Shares shall vest in equal monthly installments over the subsequent 36 months.
Vesting is contingent upon the Recipient's continued engagement with the Company throughout the vesting period. Additionally, vesting is subject to the fulfillment of the following performance criteria:
Achievement of specific milestones as mutually agreed upon and outlined in Exhibit A of this Agreement.
Compliance with the terms and conditions set forth in the Company’s Phantom Share Plan, if applicable.
In the event of the Recipient’s termination of engagement with the Company, vesting shall cease immediately, and any unvested Phantom Shares shall be forfeited, unless otherwise provided under the terms of this Agreement.
5. Payment Calculation
Upon the vesting of the Phantom Shares, the Recipient shall be entitled to a payment calculated based on the fair market value (FMV) of the Company’s stock as of the vesting date. The calculation method is as follows:
Determine the FMV per Share: The FMV per share of the Company’s stock will be assessed based on a valuation conducted by an independent appraiser or as determined by the Board of Directors at the time of vesting.
Calculate Total Payment: The FMV per share will be multiplied by the number of vested Phantom Shares to determine the total payment amount.
For example, if the FMV per share on the vesting date is $100, and 10 Phantom Shares vest, the payment amount will be $1,000.
6. Payment Terms
All vested and payable amounts shall be paid to the Recipient within 30 days following the vesting date. Payment shall be made in the form of bank transfer or check, as specified by the Recipient in writing prior to the payment date.
Payments will be subject to the following conditions:
Applicable withholding taxes and deductions as required by federal, state, or local law shall be deducted from the payment.
If the Company’s policies or applicable laws allow for alternative payment methods, such methods may be agreed upon in writing by both parties.
7. Rights and Restrictions
7.1. No Stockholder Rights
The Recipient acknowledges that Phantom Shares do not convey any rights of stock ownership, including, but not limited to, voting rights, dividend rights, or rights to participate in any distribution of the Company's assets.
7.2. Non-Transferability
Phantom Shares are non-transferable and may not be sold, assigned, pledged, or otherwise disposed of at any time, except by will or by the laws of descent and distribution.
8. Termination
In the event of termination of the Recipient's engagement with the Company, for any reason, the treatment and rights in respect to the Phantom Shares shall be as set forth in [Termination Section Details], unless otherwise provided by applicable law.
9. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of [State/Country], without regard to its conflict of law principles.
10. Entire Agreement
This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter contained herein and supersedes all prior agreements and understandings, whether written or oral, relating to such subject matter.
11. Amendments
No amendment or modification of the terms of this Agreement shall be binding unless made in writing and duly executed by the Company and the Recipient.
Signature
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
[Your Company Name]
Nadette Ritchie
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