The Vermont Phantom Stock Plan offered by Hercules, Inc. is a unique and innovative program designed to provide employees with an opportunity to participate in the company's growth and success through a simulated stock ownership. As a leading provider of specialty chemicals and materials, Hercules, Inc. recognizes the importance of rewarding and incentivizing employees for their valuable contributions. The Vermont Phantom Stock Plan operates on a predetermined formula that tracks the performance of Hercules, Inc. and rewards eligible employees accordingly. By mimicking the value of actual company shares, the plan allows participants to benefit from the company's growth without actually owning stock. Instead, the plan awards phantom units or points, which represent an employee's hypothetical investment in Hercules, Inc. One type of the Vermont Phantom Stock Plan is the Performance-Based Plan. This specific variation offers eligible employees the chance to earn phantom units based on their individual performance and the company's overall success. As employees meet or exceed predetermined goals, they are granted additional phantom units, reflecting their commitment and direct impact on Hercules, Inc.'s prosperity. Another type of the Vermont Phantom Stock Plan is the Senior Leadership Plan. Aimed at members of the company's executive team and high-ranking leaders, this plan is tailored to reward those who hold influential positions within Hercules, Inc. Participants are granted phantom units based on the company's performance as well as their own performance objectives, which typically align closely with the company's overall strategic goals. The Vermont Phantom Stock Plan offers numerous advantages for employees. Firstly, it serves as a powerful retention tool, as it aligns the interests of employees with the growth and financial success of the company. Additionally, the plan provides a sense of shared ownership, boosting employee morale, and motivation to excel. Furthermore, by participating in the Vermont Phantom Stock Plan, employees can accumulate a potentially significant amount of wealth over time. As the value of the phantom units grows parallel to the company's stock appreciation, employees may enjoy considerable financial benefits upon payout or retirement. In conclusion, the Vermont Phantom Stock Plan of Hercules, Inc. is a commendable initiative that presents employees with an opportunity to simulate stock ownership and benefit from the company's growth and success. With different types available, such as the Performance-Based Plan and the Senior Leadership Plan, this plan caters to various employee levels within the company, reinforcing a culture of mutual success. By engaging in this innovative program, Hercules, Inc. ensures that its employees remain motivated, loyal, and actively contribute to the company's long-term prosperity.
Vermont Phantom Stock Plan of Hercules, Inc.
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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.
While not stock in the company, phantom stock is worth money just like real stock? its value rises and falls with the company's actual stock (or what the company is valued at, if it's not a publicly traded company). Employees are paid out profits at the end of a pre-determined length of time.
Expiration Date: The Expiration Date for each Phantom Share depends on whether it has vested. Where the Phantom Share has not vested pursuant to the Vesting Schedule below, the Expiration Date is the earlier of: (i) the Liquidity Event Deadline or (ii) the date of termination of Participant's Continuous Service.
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.
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).
Finally, if an employee resigns or you need to terminate them, their phantom stock is discontinued, which leaves you without the risk exposure and gives you the chance to provide the phantom stock incentive to a future rock star hire.
Phantom shares usually get liquid when the company gets acquired or goes public or if the company decides to do a buyback. Any gains from the assets must be reported to tax authorities as ordinary income upon vesting.