Phantom Unit Award Agreement

Use this template phantom unit award agreement to grant phantom stock units to an employee or other service provider under a phantom plan. This template includes practical guidance, drafting notes, and alternate clauses. Phantom plan awards may either provide for full-value awards or appreciation-value awards. For full-value award plans, the amount of the cash payment for each phantom unit equals one unit of the company's applicable equity interests (e.g., one share of common stock). Phantom plan appreciation-value awards typically provide for a cash payment for each phantom unit that is equal to the value of one share of stock (or other equity interest) minus a threshold amount, typically the value of one share as of the grant date. This template contains alternate clauses so that it can be used for a full-value award plan or an appreciation-value award plan. For a full listing of key content covering equity incentive plan considerations, see Equity Incentive Plan Resource Kit. For an accompanying plan, see Phantom Stock Plan (Private Company). For additional related information and resources, see Equity Incentive Plan Resource Kit. To compare state and federal laws on restrictive covenants and terminations in employment agreements, see the Employee Benefits & Executive Compensation State Law Comparison Tool.