The Arizona Book Value Phantom Stock Plan is a unique compensation plan implemented by First Florida Banks, Inc. It is designed to provide employees with the opportunity to participate in the bank's growth and success. This stock plan is specifically associated with the Arizona branch of First Florida Banks, Inc. and offers numerous benefits to its participants. The main concept behind the Arizona Book Value Phantom Stock Plan is to create a stock appreciation program without actually issuing real company shares. Instead, employees receive a virtual stock unit that mirrors the increase in the bank's book value over time. This plan not only grants employees the potential to earn financial rewards but also aligns their interests with the bank's long-term growth. By implementing the Arizona Book Value Phantom Stock Plan, First Florida Banks, Inc. encourages employees to play an active role in enhancing the overall value of the company. As the bank's book value increases, so does the value of the virtual stock units held by the plan participants. This approach fosters a culture of teamwork, dedication, and commitment among employees, ultimately leading to the bank's success. As for the different types of the Arizona Book Value Phantom Stock Plan, they can vary based on eligibility criteria, vesting schedules, and other specific provisions. However, it's important to note that the exact details of these plans might be proprietary information specific to First Florida Banks, Inc. Therefore, without access to confidential documents, it is difficult to provide a detailed description of the various types of the Arizona Book Value Phantom Stock Plan. In summary, the Arizona Book Value Phantom Stock Plan is an innovative compensation program implemented by First Florida Banks, Inc. to award and motivate employees. This plan imitates the increase in the bank's book value over time, granting participants virtual stock units that hold value in correlation with the company's success. By participating in this plan, employees not only have the potential to earn financial rewards but also contribute to the long-term growth of the bank. Overall, the Arizona Book Value Phantom Stock Plan demonstrates the commitment of First Florida Banks, Inc. to recognize and incentivize its employees for their valuable contributions.
Arizona Book Value Phantom Stock Plan of First Florida Banks, Inc.
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FAQ
The definition of Exit Event used in this form phantom plan complies with Section 409A as the plan is designed so that awards are settled upon an Exit Event or, if earlier, a termination of a participant's employment, which is also a permissible payment event for purposes of Section 409A.
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.
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).
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.
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.
Since the benefits of phantom stocks can only be contingent upon the company's performance or predetermined benchmarks, employees with phantom stocks will not get the cash payout if the company does not meet the benchmark. Phantom stocks cannot be freely traded or transferred.
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.