Document background
The Phantom Share Agreement is utilized when companies want to provide employees with the economic benefits of share ownership while maintaining existing shareholding structures. This document type is particularly relevant in Pakistan where companies seek to implement incentive schemes without the complexities of actual share issuance. The agreement typically details the number of phantom shares granted, vesting schedule, valuation methodology, and payment terms. It's commonly used by private companies, family-owned businesses, or subsidiaries of international corporations operating in Pakistan where direct equity participation might be restricted or impractical. The document must comply with Pakistani corporate law, securities regulations, and tax requirements while providing clear mechanisms for calculating and distributing the economic benefits associated with phantom shares.
