The Phantom Share Agreement is utilized in the UAE business environment where companies seek to provide employees with equity-like incentives while maintaining existing ownership structures. This is particularly relevant given UAE's foreign ownership restrictions and specific regulatory requirements. The document typically outlines the grant of phantom shares, which provide recipients with contractual rights to receive cash payments based on the company's value appreciation, similar to actual shareholders. The agreement includes crucial details about vesting conditions, valuation methodologies, payment terms, and termination provisions, all structured to comply with UAE laws and regulations. This type of agreement is especially valuable for companies operating in the UAE that want to attract and retain key talent while maintaining compliance with local ownership requirements and corporate governance structures.
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Key Requirements PROMPT example:
Phantom Share Agreement
"I need a Phantom Share Agreement under UAE law for our Dubai-based technology startup, covering 50 phantom shares to be granted to our new CTO with a three-year vesting period starting March 2025, including specific provisions for an anticipated IPO within the next five years."
1. Parties: Identification of the company and the phantom share recipient
2. Background: Context of the agreement and purpose of the phantom share grant
3. Definitions: Key terms including Phantom Shares, Fair Market Value, Vesting Date, etc.
4. Grant of Phantom Shares: Details of the phantom shares being granted, including number and grant date
5. Vesting Provisions: Vesting schedule and conditions for the phantom shares
6. Valuation Mechanism: Method for determining the value of phantom shares
7. Payment Terms: Timing and method of payments for vested phantom shares
8. Termination Provisions: Treatment of phantom shares upon various types of employment termination
9. Confidentiality: Obligations regarding confidential information
10. Tax Implications: Tax treatment and responsibilities
11. Governing Law and Jurisdiction: Specification of UAE law and relevant courts
12. Amendment and Termination: Procedures for modifying or terminating the agreement
1. Change of Control Provisions: Include when company anticipates potential merger, acquisition, or restructuring
2. IPO Provisions: Include when company contemplates future public offering
3. Non-Competition and Non-Solicitation: Include for senior employees or when protecting business interests
4. Clawback Provisions: Include for senior executives or when required by company policy
5. Dispute Resolution: Include when parties prefer alternative dispute resolution methods
6. Currency Conversion: Include when payments might be made in currency other than AED
7. Assignment Rights: Include when transfer rights need to be specifically addressed
1. Schedule 1 - Vesting Schedule: Detailed timeline and conditions for vesting of phantom shares
2. Schedule 2 - Valuation Formula: Specific calculation method for determining phantom share value
3. Schedule 3 - Notice Requirements: Forms and procedures for various notices under the agreement
4. Schedule 4 - Payment Procedures: Detailed process for executing payments
5. Appendix A - Definitions: Extended definitions and interpretations
6. Appendix B - Tax Treatment: Detailed explanation of tax implications and calculations
7. Appendix C - Corporate Structure: Current corporate structure relevant to valuation
Authors
Relevant legal definitions
Agreement
Applicable Law
Board
Business Day
Cause
Change of Control
Company
Confidential Information
Disability
Effective Date
Eligible Employee
Exercise Date
Exercise Notice
Exercise Period
Exercise Price
Fair Market Value
Financial Year
Good Leaver
Grant Date
Grant Notice
Group
Holding Company
IPO
Issue Price
Liquidation Event
Market Value
Parent Company
Participant
Payment Date
Performance Conditions
Phantom Share
Phantom Share Plan
Plan Administrator
Reference Price
Relevant Exit Event
Settlement Amount
Settlement Date
Share
Share Value
Shareholder
Subsidiary
Taxes
Termination Date
Transfer
UAE
Valuation Date
Valuation Methodology
Vested Phantom Shares
Vesting Conditions
Vesting Date
Vesting Period
Vesting Schedule
Applicable Law
Board
Business Day
Cause
Change of Control
Company
Confidential Information
Disability
Effective Date
Eligible Employee
Exercise Date
Exercise Notice
Exercise Period
Exercise Price
Fair Market Value
Financial Year
Good Leaver
Grant Date
Grant Notice
Group
Holding Company
IPO
Issue Price
Liquidation Event
Market Value
Parent Company
Participant
Payment Date
Performance Conditions
Phantom Share
Phantom Share Plan
Plan Administrator
Reference Price
Relevant Exit Event
Settlement Amount
Settlement Date
Share
Share Value
Shareholder
Subsidiary
Taxes
Termination Date
Transfer
UAE
Valuation Date
Valuation Methodology
Vested Phantom Shares
Vesting Conditions
Vesting Date
Vesting Period
Vesting Schedule
Clauses
Grant Rights
Vesting
Valuation
Payment Terms
Performance Conditions
Termination Rights
Good Leaver/Bad Leaver
Change of Control
Corporate Reorganization
Confidentiality
Non-Competition
Non-Solicitation
Tax Obligations
Notices
Assignment
Amendment
Waiver
Severability
Entire Agreement
Force Majeure
Governing Law
Dispute Resolution
Representations and Warranties
Covenants
Plan Administration
Information Rights
Data Protection
Currency
Compliance with Laws
Exit Provisions
IPO Provisions
Clawback
Term and Termination
Exercise Rights
Settlement Mechanics
Vesting
Valuation
Payment Terms
Performance Conditions
Termination Rights
Good Leaver/Bad Leaver
Change of Control
Corporate Reorganization
Confidentiality
Non-Competition
Non-Solicitation
Tax Obligations
Notices
Assignment
Amendment
Waiver
Severability
Entire Agreement
Force Majeure
Governing Law
Dispute Resolution
Representations and Warranties
Covenants
Plan Administration
Information Rights
Data Protection
Currency
Compliance with Laws
Exit Provisions
IPO Provisions
Clawback
Term and Termination
Exercise Rights
Settlement Mechanics
Relevant Industries
Financial Services
Technology
Professional Services
Real Estate
Healthcare
Retail
Manufacturing
Energy
Telecommunications
Construction
Hospitality
Education
Consulting
Relevant Teams
Human Resources
Legal
Finance
Executive Leadership
Board of Directors
Operations
Sales
Business Development
Research & Development
Information Technology
Strategy
Relevant Roles
Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
Managing Director
Senior Vice President
Vice President
Department Head
Senior Manager
Key Account Manager
Technical Director
Regional Manager
Project Director
Sales Director
Research & Development Lead
Principal Consultant
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