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Phantom Stock Option Agreement
"I need a Phantom Stock Option Agreement for our Canadian tech startup to grant 1,000 phantom stock units to our new CTO, with quarterly vesting over 4 years starting March 1, 2025, and including special provisions for accelerated vesting in case of an IPO."
1. Parties: Identification of the company and the participant receiving the phantom stock options
2. Background: Context of the agreement and purpose of the phantom stock option grant
3. Definitions: Key terms including Phantom Stock Unit, Fair Market Value, Grant Date, Vesting Date, Exercise Date
4. Grant of Phantom Stock Options: Details of the number of units granted and basic terms
5. Vesting Schedule: Timeline and conditions for vesting of the phantom stock options
6. Valuation Methodology: Process and formula for determining the value of phantom stock units
7. Exercise Procedures: Process and requirements for exercising vested phantom stock options
8. Payment Terms: Timing and method of payment upon exercise
9. Tax Withholding: Company's rights and participant's obligations regarding tax withholding
10. Termination Provisions: Treatment of phantom stock options upon various termination scenarios
11. Confidentiality: Obligations to maintain confidentiality of agreement terms and company information
12. General Provisions: Standard clauses including amendments, governing law, and notices
1. Change of Control: Special provisions for corporate transactions or change in ownership - include if company anticipates potential sale or merger
2. International Tax Provisions: Special tax considerations for non-Canadian residents - include if participant is foreign national
3. Multiple Classes: Provisions for different classes of phantom stock units - include if program has different unit types
4. Clawback Provisions: Company's right to recoup payments - include if required by corporate policy
5. Non-Competition and Non-Solicitation: Restrictive covenants - include for senior employees or key personnel
6. Acceleration Events: Circumstances triggering accelerated vesting - include if offering this benefit
7. Shareholder Rights: Explicit disclaimer of actual shareholder rights - include if jurisdiction requires specific clarification
1. Schedule A - Grant Notice: Details of specific grant including number of units, grant date, and vesting schedule
2. Schedule B - Valuation Formula: Detailed methodology and calculations for determining phantom stock unit value
3. Schedule C - Exercise Form: Template form for participant to exercise vested phantom stock options
4. Schedule D - Beneficiary Designation: Form for participant to designate beneficiaries
5. Schedule E - Tax Election Forms: Required tax forms and elections
6. Appendix A - Vesting Examples: Illustrative examples of vesting calculations and scenarios
7. Appendix B - Payment Examples: Illustrative examples of payment calculations
Authors
Technology
Financial Services
Professional Services
Manufacturing
Healthcare
Biotechnology
Retail
Energy
Real Estate
Telecommunications
Consulting
Software Development
Human Resources
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Finance
Executive Leadership
Operations
Research and Development
Sales
Product Development
Engineering
Business Development
Chief Executive Officer
Chief Financial Officer
Chief Technology Officer
Senior Vice President
Vice President
Director
Senior Manager
Department Head
Key Technical Staff
Senior Engineer
Principal Scientist
Sales Executive
Product Manager
Regional Manager
Business Unit Leader
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