contract-law
What is the value of these phantom shares?
<p>The wording of this paragraph is not clear to me. Does the value of the Phantom Units equate to 0.25% of the FMV or do they equate to 0.25% of 10% of full FMV?</p>

<blockquote>
  <p>The number of Phantom Units granted hereby is intended to equate to
  one-quarter of one percent (0.25%) of the Fair Market Value of the
  Company as if the maximum number of Phantom Units that may be awarded
  under the Plan are outstanding, inclusive of the Phantom Units granted
  hereby, which in the aggregate represent 10% of the Fair Market Value
  of the Company, and the remaining 90% of the Fair Market Value of the
  Company is represented by the outstanding Class A Units held by the
  Founder Group.</p>
</blockquote>

<p>For example: Assuming the contract awards 100 Phantom Units and the company is valued at $10M which of the following two calculations correctly interprets the value of the Phantom Units? </p>

<p>A) 0.25% of 10% of $10M = $2,500</p>

<p>or </p>

<p>B) 0.25% of 100% of $10M = $25,000</p>

<p>You can value all of the phantom stock in that particular grant (i.e. $25,000 which is 0.25% of the $10,000,000 FMV of the Company), or you can value the total amount of phantom stock which can be issued (i.e. $1,000,000 which is 10% of the $10,000,000 FMV).</p>

<p>But, you cannot value 100 shares of phantom stock because the information provided doesn't state how many shares of phantom stock are bring granted.</p>

<p>Your question indicates that your understanding of the language you are reading is flawed. This is simply a matter of carefully reading the words that you are quoting.</p>
