Document background
The Phantom Equity Agreement serves as a critical instrument for companies seeking to align key personnel interests with organizational success without diluting actual shareholding. This document type is particularly relevant in New Zealand's business environment, where companies must navigate specific regulatory requirements under the Companies Act 1993 and related legislation. The agreement is typically implemented when a company wants to provide equity-like incentives to key employees or consultants while maintaining existing ownership structures. It includes detailed provisions for grant terms, vesting conditions, valuation methodologies, and payment triggers, all structured to comply with New Zealand tax and employment law requirements. The Phantom Equity Agreement is especially valuable for private companies, high-growth businesses, and organizations with complex ownership structures where traditional equity sharing may be impractical or undesirable.
