Phantom Stock Plan Example

State:
Multi-State
Control #:
US-CC-24-258
Format:
Word; 
Rich Text
Instant download

Description

The Phantom Stock Plan is a structured incentive program allowing employees to benefit from hypothetical shares, termed "phantom units," which provide future payments linked to the company's common stock value. This plan is overseen by a designated Committee and is available to employees across the company, primarily targeting senior management. Each phantom unit reflects no actual ownership in company securities but rather establishes an unfunded account for participants, valued based on stock performance. Payments occur upon retirement, death, disability, or the end of a specified vesting period, which can last up to five years. The total amount received includes the stock's fair market value, cash dividends equivalent, and interest calculated on any accumulated amounts. Units are forfeited if employment ends for reasons other than retirement or disability. Additionally, participants may convert these units into interest-bearing equivalents before vesting. This plan can be particularly beneficial to attorneys, partners, owners, associates, paralegals, and legal assistants looking to structure compensation packages that motivate senior staff while ensuring compliance with legal and tax implications.
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Phantom Stock Plan Example