What is a phantom stock agreement?

A. A phantom stock plan is a deferred compensation plan that awards the employee a unit measured by the value of a share of a company's common stock, or, in the case of a limited liability company, by the value of an LLC unit. However, unlike actual stock, the award does not confer equity ownership in the company.

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Adoption of Restricted Stock Plan of RPM...

Philadelphia Pennsylvania Adoption of Restricted Stock Plan of RPM, Inc.

Name: Philadelphia Pennsylvania Adoption of Restricted Stock Plan of RPM, Inc.
Brand: US Legal Forms
Rating: 4.57 (266 reviews)

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Corporations - Public - Stock Options

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Multi-State

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Philadelphia

Control #:

US-CC-18-199A-NE

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This sample form, a detailed Adoption of Restricted Stock Plan, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats.

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A phantom stock plan is an employee benefit plan that gives selected employees (senior management) many of the benefits of stock ownership without actually giving them any company stock. This type of plan is sometimes referred to as shadow stock. Rather than getting physical stock, the employee receives mock stock.

Restricted shares are unregistered, non-transferable shares issued to a company's employees. They give employees incentive to help companies attain success. They are most common in established companies that want to motivate people with an equity stake. Their sale is usually restricted by a vesting schedule.

RSUs are generally subject to a vesting schedule, meaning the stock does not fully belong to the employee until such a time it is vested. During the vesting period, the stock cannot be sold. Once vested, the stock is given a Fair Market Value and is considered taxable compensation to the employee.

Phantom stock is not a good idea if the company is planning on issuing them to most or all employees, especially if the shares will be paid out when the employee leaves the company or retires. In that case, phantom shares may be ruled illegal because of the Employee Retirement Income and Security Act (ERISA).

An RSU is a grant whose worth is based on the value of the company's stock. There is no value to the employee when issued. The RSUs will vest at some point in the future based on time passed or perhaps the achievement of a goal.

Restricted stock units are a way an employer can grant company shares to employees. The grant is "restricted" because it is subject to a vesting schedule, which can be based on length of employment or on performance goals, and because it is governed by other limits on transfers or sales that your company can impose.

A. A phantom stock plan is a deferred compensation plan that awards the employee a unit measured by the value of a share of a company's common stock, or, in the case of a limited liability company, by the value of an LLC unit. However, unlike actual stock, the award does not confer equity ownership in the company.

The phantom stock becomes a liability that the company must eventually convert to either cash or company stock. In privately held businesses, company stock is rarely an option. employees like these plans as any phantom stock they receive is not taxable until converted into cash by the company.

Phantom stock is a contractual agreement between a corporation and recipients of phantom shares that bestow upon the grantee the right to a cash payment at a designated time or in association with a designated event in the future, which payment is to be in an amount tied to the market value of an equivalent number of

A Restricted Stock Plan is a common way to share stock with employees in public companies. The shareholder approved plan simply allows for the issuance of stock to selected employees. Unlike stock options, employees receive the full starting value of the shares.

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Philadelphia Pennsylvania Adoption of Restricted Stock Plan of RPM, Inc.

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