You may devote time online attempting to find the lawful file web template that suits the federal and state specifications you will need. US Legal Forms supplies thousands of lawful forms which are reviewed by professionals. It is simple to acquire or print the Pennsylvania Phantom Stock Plan of Hercules, Inc. from the support.
If you already possess a US Legal Forms account, it is possible to log in and click the Acquire switch. After that, it is possible to full, revise, print, or sign the Pennsylvania Phantom Stock Plan of Hercules, Inc.. Each lawful file web template you purchase is your own for a long time. To get another backup for any obtained type, visit the My Forms tab and click the corresponding switch.
If you are using the US Legal Forms website the very first time, stick to the basic directions below:
Acquire and print thousands of file themes using the US Legal Forms site, which provides the largest variety of lawful forms. Use expert and condition-specific themes to deal with your company or individual demands.
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. Employers must ensure their plans follow federal laws in section 409A of the Internal Revenue Code (IRC).
Phantom shares are only paid out if the employee meets certain terms. If an employee leaves the company before those terms are met, the phantom stocks disappear. If the company had used actual stock, those would have to be repurchased, which would make things more complicated and potentially, more expensive.
Providing phantom stock allows the company to reward employees for their hard work without worrying about those big problems. Phantom shares are typically used to encourage senior leadership to produce better results for the company.
Summary. A phantom stock plan refers to a type of deferred employee compensation plan where plan participants benefit from the upside of a company's share price without actually receiving company shares. In a phantom stock plan, upon redemption of phantom stock, the plan participant receives cash compensation.
As described, phantom shares are usually redeemed in cash?the payment being treated like a bonus. However, should the plan agreement allow it, the payment obligation may be satisfied by distributing actual stock to the employees. A phantom stock plan must be supported by more than a verbal commitment.
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.
As described, phantom shares are usually redeemed in cash?the payment being treated like a bonus. However, should the plan agreement allow it, the payment obligation may be satisfied by distributing actual stock to the employees. A phantom stock plan must be supported by more than a verbal commitment.
Phantom stock is a contract between an employer and an employee that grants the employee the right to receive a payment based on the value of the employer's stock. When granting phantom stock, the employer does not grant the employee any shares of the employer's stock.