Individual phantom shares grant (Spain)

curl -X POST https://dealroom.todo.law/api/v1/agent/contracts \
  -H "Authorization: Bearer drk_YOUR_KEY" \
  -H "Content-Type: application/json" \
  -H "Idempotency-Key: $(uuidgen)" \
  -d '{
    "contractType": "PHANTOM_SHARES_GRANT",
    "language": "es",
    "party": {
      "legalName": "Your company"
    },
    "counterparty": {
      "legalName": "The other company"
    },
    "terms": {
      "employee-name": "<employee-name>",
      "phantom-count": "<phantom-count>",
      "grant-date": "2026-11-01",
      "plan-date": "2026-11-01",
      "individual-vesting-months": "<individual-vesting-months>"
    },
    "inline": "md"
  }'

What it is and when it is used

An individual phantom shares grant (in Spanish, contrato de asignación individual de participaciones fantasma) is the agreement by which a Spanish company awards a number of phantom shares to one beneficiary. Phantom shares are contractual rights to a cash payment linked to the value of the company's participaciones when a liquidity event occurs. They do not make the beneficiary a member and give no political rights.

The grant is always made under the master plan. The company first adopts its phantom shares plan, which sets pool size, valuation method, liquidity events and the general leaver rules. The grant then records the person's own award and any agreed departures from the plan. The plan's terms are incorporated by reference, and the beneficiary declares having received and read it.

Who signs it and in which role

• The Company makes the award under its plan and pays the amounts due when they arise.
• The Beneficiary is the individual who receives the award. They may be an employee, a manager, a collaborator with a purely commercial relationship or, if the corporate approvals are in place, a director.

The parties fill in the beneficiary's name, the number of phantom shares, the grant date, the date of the master plan, the individual vesting period in months and the city whose courts hear civil disputes (Madrid by default). Depending on the options chosen, they also fill in the percentage of the pool and the area and pay for any non-compete.

The beneficiary also declares that they understand they will not become a member, that payment depends on a liquidity event and that the value may be zero, that they had the chance to consult an independent lawyer and tax adviser, and that payment is subject to withholding.

Key clauses

Size of the award

A fixed number of phantom shares, a percentage of the plan's total pool, or a number that depends on meeting predefined performance targets.

Individual changes to vesting

The plan's standard schedule without changes, a faster schedule than the plan's, or a schedule designed for this grant. Individual changes prevail over the plan and must be written down expressly.

Acceleration on change of control

What happens to unvested units if the company is sold or merged:

• Full acceleration (single trigger): all unvested units vest at once.
• 50% acceleration: half of the units still unvested at the change of control vest early.
• 12-month credit: the units that would have vested over the next twelve months vest early, up to the total awarded.
• No acceleration: the schedule continues, or unvested units lapse under the terms of the transaction.

The skill describes the 50% and 12-month credit mechanisms as the market standard for partial acceleration. It warns against expressing partial acceleration as the share of time elapsed applied to the unvested part, because the later the exit, the more is accelerated, which matches no market standard.

Non-compete and non-solicitation

After leaving, the beneficiary agrees not to compete with the company or solicit its employees and customers for 12 months or 6 months, or takes on no restriction. Both restrictive options require specific pay from the company. In the 12-month option, if the beneficiary is an employee without technical status, the period is automatically cut to six months; twelve months applies only to technical staff or a purely commercial relationship.

Acknowledgement of the tax treatment

The full acknowledgement (recommended) sets out the tax treatment in the grant in the same terms as the plan: employment income for employees under article 17.1 of the personal income tax law, taxed on payment with withholding and social security; the possible 30% reduction in article 18.2 if its conditions are met (generation period over two years, a single tax period, a 300,000 euro base and no use of the reduction in the five previous periods); and the fact that the start-up law (Ley 28/2022) benefits do not apply to cash-settled incentives. The alternative refers to the plan but keeps the essential warnings on withholding and on Ley 28/2022.

Confidentiality of the award

Strict confidentiality, with legal safeguards: employees may always disclose their own pay, and a breach is neither a bad leaver event nor a reason to lose vested units, only a claim for damages. Limited confidentiality: the beneficiary may share the terms with close family and professional advisers. Or no confidentiality obligation.

The fixed terms also cover reference to the plan, a summary of the award, the beneficiary's declarations, communications, data protection, entire agreement, and Spanish provisions on salary nature, tax, non-competes, directors and pay transparency.

What the two sides usually negotiate

The company generally prefers an award tied to performance, no acceleration on a sale, a 12-month non-compete, a short reference to the plan for tax and strict confidentiality. The beneficiary generally prefers a faster vesting schedule, full acceleration, no post-exit restriction and no confidentiality obligation.

When the two sides disagree, Dealroom proposes the balanced positions in the skill:

• Size: a fixed number of units or a percentage of the pool.
• Vesting: the plan's standard schedule, or a schedule designed for this grant.
• Acceleration: 50% of unvested units, or the 12-month credit.
• Non-compete: six months.
• Tax: the full acknowledgement.
• Confidentiality: limited to close family and advisers.

Jurisdictions and languages Dealroom supports for it

Dealroom drafts the grant under Spanish law only, in Spanish only. This page explains it in English, but the grant itself is produced in Spanish. The company and the beneficiary can each state their preferences in Dealroom, or the company can prepare it alone.

Disputes with an employee that arise from the employment relationship belong to the labour courts under article 2 of the Ley 36/2011, whatever court the parties choose; the chosen city's civil courts apply only to purely commercial relationships and other civil matters. If the beneficiary is a director, the grant depends on the articles of association, the general meeting and, for executive directors, a board-approved contract, as set out in the plan. For the beneficiary's employment terms, see the employment contract (Spain).

Common mistakes

• Signing a grant without an approved plan. The grant refers to the plan's valuation method, liquidity events and leaver rules.
• Agreeing a 12-month non-compete with an ordinary employee. The law limits it to six months; any excess has no effect.
• Treating the phantom shares as the non-compete pay. Their value is uncertain and does not count; separate, specific pay is required.
• Combining pay secrecy with loss of vested units. Employees may disclose their own pay, and forfeiting vested units for a confidentiality breach is disproportionate.
• Calculating acceleration as elapsed time over total time on the unvested part. Use one of the standard mechanisms and check the result with a worked example.
• Promising start-up tax benefits. They apply only to delivery of real shares, not to cash payments.
• Stating that the payment is not salary. The label does not decide the question for employees.