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PHANTOM UNIT AWARD AGREEMENT

BUILD THEN MARKET LLC

THIS PHANTOM UNIT AWARD AGREEMENT (the "Agreement") is made effective as of [DATE] (the "Grant Date"), by and between BUILD THEN MARKET LLC, a [State] Limited Liability Company (the "Company"), and [MEMBER NAME] (the "Participant").

1. Grant of Phantom Units​

The Company hereby grants to the Participant [NUMBER] Phantom Units, representing a 2.0% economic interest in the Company's future Exit Value.

  • Nature of Interest: These Units are solely a contractual right to receive a future cash payment. The Participant is NOT a member, partner, or equity holder of the Company and has NO voting rights.

2. Vesting Schedule​

The Phantom Units shall vest according to the following schedule:

  • Milestone 1: [e.g., 25% upon launch of MVP]

  • Milestone 2: [e.g., 25% upon first $10k revenue]

  • Time-Based: [e.g., Remaining 50% vesting monthly over 24 months]

  • Unvested Units are automatically forfeited upon termination of the Service Relationship.

3. Payment Trigger ("Liquidity Event")​

The Participant is eligible for payment only upon a "Liquidity Event," defined as:

  1. The sale of substantially all Company assets;

  2. A merger or acquisition where the Founder loses control; or

  3. An Initial Public Offering (IPO).

Payment Amount: Upon a Liquidity Event, the Participant shall receive a cash bonus equal to:

$$(Net Exit Proceeds 2.0\%) - Taxes$$

4. Conversion to Real Equity ("The Trigger")​

If, at any time, the Company:

(a) Raises equity financing from third-party investors; OR

(b) Exceeds $100,000 in annual Gross Revenue;

Then the Company reserves the right, at its sole discretion, to convert these Phantom Units into actual Class B Profit Interest Units (or Stock Options if a Corporation).

  • Conversion Terms: The conversion shall be structured to provide the Participant with an economic value substantially equivalent to the vested Phantom Units at the time of conversion, subject to applicable tax laws.

  • Cooperation: The Participant agrees to execute any necessary documents (e.g., Operating Agreement Joinder, 83(b) Election) required to effectuate this conversion.

5. Tax Treatment​

The Participant acknowledges that any payout under this Agreement is treated as Ordinary Income (Bonus) and is subject to standard income tax withholding.

Agreed and Accepted:

Company (Abhi Ray) Participant