SpinCo Phantom Units Sample Clauses
The "SpinCo Phantom Units" clause defines the terms and conditions under which phantom equity units are granted to employees or stakeholders of a newly formed company (SpinCo) following a corporate spin-off. Typically, these phantom units mimic the value and appreciation of actual shares in SpinCo but do not confer actual ownership or voting rights; instead, they entitle holders to cash payments or equivalent value based on the company's performance or share price. This clause outlines eligibility, vesting schedules, and payout mechanisms for the phantom units. Its core function is to incentivize and retain key personnel during and after the spin-off by aligning their interests with the success of SpinCo, without diluting actual equity.
SpinCo Phantom Units. Each SpinCo Phantom Unit that is outstanding immediately following the Effective Time shall, as of immediately following the Effective Time, become fully vested and be cancelled and converted into the right to receive a number of SpinCo Common Units equal to the number of SpinCo Common Units underlying such SpinCo Phantom Unit.