Phantom Equity Agreement Template for Austria

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Key Requirements PROMPT example:

Phantom Equity Agreement

"I need a Phantom Equity Agreement under Austrian law for our Vienna-based technology startup, to grant our newly hired CTO phantom shares equivalent to 5% of company value, with a 4-year vesting period starting March 2025 and acceleration provisions for an IPO event."

Document background
The Phantom Equity Agreement serves as a strategic tool for Austrian companies seeking to attract, retain, and motivate key personnel without diluting actual shareholding. This document type is particularly relevant when companies want to provide equity-like incentives while maintaining their existing corporate structure. The agreement, governed by Austrian law, establishes synthetic equity rights that mirror the economic benefits of share ownership without conferring actual shareholder status. It includes detailed provisions on vesting schedules, valuation methods, exercise conditions, and payment terms, all designed to comply with Austrian corporate, tax, and employment laws. The Phantom Equity Agreement is commonly used in privately held companies, start-ups, and established businesses looking to implement performance-based compensation structures.
Suggested Sections

1. Parties: Identification of the contracting parties - the company and the phantom equity recipient

2. Background: Context of the agreement and purpose of granting phantom equity rights

3. Definitions: Key terms used throughout the agreement, including 'Phantom Shares', 'Exercise Price', 'Valuation', etc.

4. Grant of Phantom Equity Rights: Details of the phantom equity grant, including number of units and grant date

5. Vesting Provisions: Vesting schedule and conditions for the phantom equity rights

6. Valuation Methodology: Method for calculating the value of phantom shares and payment amounts

7. Exercise Rights: Conditions and procedures for exercising phantom equity rights

8. Payment Terms: Terms and conditions for payments upon exercise of phantom equity rights

9. Taxation: Tax treatment and responsibilities regarding phantom equity payments

10. Confidentiality: Obligations regarding confidential information

11. Term and Termination: Duration of the agreement and termination provisions

12. Governing Law and Jurisdiction: Specification of Austrian law application and jurisdiction

Optional Sections

1. Employment Relationship: Required when the recipient is an employee, addressing the relationship between employment and phantom equity rights

2. Change of Control Provisions: Include when specific provisions for company sale or merger scenarios are needed

3. Non-Competition and Non-Solicitation: Add when additional restrictive covenants are desired

4. Multiple Participant Provisions: Include when the phantom equity program involves multiple recipients

5. Corporate Events Adjustments: Add when specific provisions for handling corporate restructuring, IPO, or other major events are needed

6. Clawback Provisions: Include when the company wants right to recoup payments under certain circumstances

7. International Tax Provisions: Required when recipient is subject to tax in multiple jurisdictions

Suggested Schedules

1. Schedule 1 - Grant Notice: Detailed information about the specific phantom equity grant

2. Schedule 2 - Vesting Schedule: Detailed breakdown of the vesting timeline and conditions

3. Schedule 3 - Valuation Formula: Detailed methodology for calculating phantom equity value

4. Schedule 4 - Exercise Notice Template: Template form for exercising phantom equity rights

5. Schedule 5 - Participation Agreement: Standard form for additional participants joining the program

6. Appendix A - Company Valuation Principles: Detailed principles and methods for company valuation

7. Appendix B - Tax Treatment Summary: Summary of applicable tax regulations and treatment

Authors

Alex Denne

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

Relevant legal definitions
Clauses
Relevant Industries

Technology

Financial Services

Professional Services

Manufacturing

Healthcare

Biotechnology

Software Development

Consulting

E-commerce

Real Estate

Energy

Telecommunications

Relevant Teams

Legal

Human Resources

Finance

Executive Leadership

Corporate Development

Compensation & Benefits

Operations

Research & Development

Sales

Product Development

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Technology Officer

Senior Vice President

Managing Director

Department Head

Senior Manager

Key Developer

Principal Consultant

Senior Advisor

Executive Director

Country Manager

Senior Scientist

Lead Engineer

Head of Sales

Director of Operations

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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