Phantom, virtual or shadow shares or stocks is a very advanced financing mechanism used by most of the modern startups to finance their operations and retributive their staff and investors.

A Phantom Stock plan can be used as an employee benefit plan that gives selected employees many of the benefits of the regular shares ownership without actually giving them any company stock.

From the legal point of view a Phantom Share or Stock is a contractual agreement between a corporation and recipients of Phantom Shares that bestow upon the grantee the right to a cash payment at a designated time or in association with a designated event in the future, which payment is to be in an amount tied to the market value of an equivalent number of shares of the corporation's stock. Thus, the amount of the payout will increase as the stock price rises, and decrease if the stock falls, but without the recipient (grantee) actually receiving any stock. 

Phantom Share or Stock can, as in the proceedit case, pay dividends. When the grant is initially made, there is no tax impact. When the payout is made, however, it is taxed as ordinary income to the grantee and is deductible to the employer. Generally, Phantom plans require the grantee to become vested, either through seniority or meeting a performance target.

In essence, a Phantom Share or Stock is an asset with the same economics benefits than the regular shares of a company, except for the fact that they have no voting rights.

Rather than getting physical stock, the employee receives mock stock. Even though it's not real, the Phantom Share or Stock follows the price movement of the company's actual stock, paying out any resulting profits.

Expertel SA, the company owner and supporter of the proceedit project, has established a Phantom Shares Program used to compensate our contributors and employees and open in general to any proceedit stakeholder interested on investing in the project.