The Minnesota Book Value Phantom Stock Plan is a unique compensation program implemented by First Florida Banks, Inc. to incentivize and reward its employees. This plan is designed to mirror the performance and growth of the company, providing participants with a sense of ownership and alignment with shareholders' interests. At its core, the Minnesota Book Value Phantom Stock Plan is based on the concept of phantom stock, a form of synthetic equity. Unlike traditional stock options or grants, phantom stock does not provide actual ownership in the company but entitles participants to receive cash payouts equivalent to the increase in the company's book value over a specified period. This plan is specifically tailored to align with Minnesota state laws and regulations, ensuring compliance and consistency across the company's operations within the state. The Minnesota Book Value Phantom Stock Plan offers several variations, each with distinct features and objectives. Some different types of this plan include: 1. Basic Minnesota Book Value Phantom Stock Plan: This variant provides employees with a predetermined number of phantom stock units tied to the increase in the company's book value. Participants are granted hypothetical ownership for the purpose of calculating payouts. 2. Performance-Based Minnesota Book Value Phantom Stock Plan: This plan incorporates performance metrics, such as revenue growth, profitability, or market share, to determine the value of phantom stock units. A higher performance level leads to an increased number of units and potential rewards. 3. Vesting Minnesota Book Value Phantom Stock Plan: In this type, phantom stock units are subject to a vesting schedule, wherein participants earn ownership rights over a specific period. This encourages employee retention and incentivizes long-term commitment to the company's success. 4. Executive Minnesota Book Value Phantom Stock Plan: Tailored for executives and senior leadership, this plan offers additional benefits and features to align with their critical role in driving the company's growth. It may include accelerated vesting schedules, enhanced payout formulas, or unique performance criteria. Participation in the Minnesota Book Value Phantom Stock Plan of First Florida Banks, Inc. is voluntary and typically limited to eligible employees. The plan's details, including the grant size, vesting schedule, and payout formula, are defined by the company's compensation committee and communicated to participants through a comprehensive plan document. It is essential to consult the official plan document and discuss the specific terms and conditions of the Minnesota Book Value Phantom Stock Plan with the Human Resources department or the designated plan administrator for accurate information and guidance.
Minnesota 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).
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.
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.
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.
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.
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).
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.