20-162A 20-162A . . . Book Value Phantom Stock Plan under which Committee of Board of Directors may, from time to time, grant quantity of phantom shares to selected employees, each share being equivalent to one share of corporation common stock. Phantom shares may be exercised at any time within ten years of date of grant (subject to certain limitations in event of termination of employment) Upon exercise, employee is paid cash equal to increase in underlying net book value per share on fully diluted basis of shares between date of grant and date of exercise
New Jersey Book Value Phantom Stock Plan of First Florida Banks, Inc.
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How to fill out Book Value Phantom Stock Plan Of First Florida Banks, Inc.?
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FAQ
Phantom stock plans are considered ?liability awards? for accounting purposes (assuming they will be settled in cash rather than stock).
How Phantom Stock Plans Are Taxed. Payments from phantom stock plans are subject to typical income taxes, not capital gains taxes. In turn, companies can deduct phantom plan payouts the year the employee reports the income.
As a default, this form plan provides for forfeiture of all unvested phantom stock units upon a participant's termination of employment (subject to the terms of the award agreement).
A cash payment from Company A as the difference between the current common share price and phantom stock issue price: ($70 ? $50) x 500 = $10,000; or. A cash payment from Company A equal to the current common share price: $50 x 500 = $25,000.
Phantom shares are usually paid out when the company gets acquired or IPOes. The phantom shares are paid out in cash for their corresponding value.
Qualified plans, such as 401(k) programs, are subject to all of the rules and restrictions of ERISA. Nonqualified plans, including most phantom stock plans, are not.
Phantom stock plans are considered ?liability awards? for accounting purposes (assuming they will be settled in cash rather than stock). As such, the sponsoring company must recognize the plan expense ratably over the vesting period. Varying accrual schedules can be found in the market.
The answer involves two variables: (a) the presumed value of the company, and (b) the number of shares to be used in the plan. Once these two answers are known, the phantom share price is calculated as the former (the value) divided by the latter (the number of shares).
If a business is sold, employees that own phantom stock receive money that is equal to the amount they would have received had they owned actual stock in the company. For that reason, it's financially beneficial to employees to own phantom stock, as they don't need to worry about dilution.
