Can you sell phantom stock?

Since phantom shares are not the same as real stock, you don't have to worry about employees voting down key decisions, such as selling the company.

What is a phantom stock option?

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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Book Value Phantom Stock Plan of First Florida Banks...

Queens New York Book Value Phantom Stock Plan of First Florida Banks, Inc.

Name: Queens New York Book Value Phantom Stock Plan of First Florida Banks, Inc.
Brand: US Legal Forms
Rating: 4.74 (229 reviews)

Category:

Corporations - Public - Incentive Compensation Plans

State:

Multi-State

County:

Queens

Control #:

US-CC-20-162A

Format:

Instant download

Description

20-162A 20-162A . . . Book Value Phantom Stock Plan under which Committee of Board of Directors may, from time to time, grant quantity of phantom shares to selected employees, each share being equivalent to one share of corporation common stock. Phantom shares may be exercised at any time within ten years of date of grant (subject to certain limitations in event of termination of employment) Upon exercise, employee is paid cash equal to increase in underlying net book value per share on fully diluted basis of shares between date of grant and date of exercise

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FAQ

Since phantom shares are not the same as real stock, you don't have to worry about employees voting down key decisions, such as selling the company.

Phantom stock plans do not result in shareholder dilution because actual shares are not being transferred. Employees do not become owners. Instead, they are potential cash beneficiaries in the underlying company value.

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.

To the extent that phantom stock is considered a security, private companies generally rely on the exemption from registration under Rule 701 of the Securities Act of 1933, which allows a company to offer securities to employees under a written compensatory plan if: (1) certain disclosure requirements are met and (2)

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. No voting rights.

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.

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).

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).

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Queens New York Book Value Phantom Stock Plan of First Florida Banks, Inc.

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FAQ

Can you sell phantom stock?

Can phantom shares be diluted?

What happens to phantom stock when a company goes public?

Is phantom stock considered a security?

Is phantom stock a security?

How do I cash out my phantom stock?

What is a phantom stock option?

Is phantom stock a good idea?

How do you value phantom stock?

Interesting Questions

What is the Queen's Book Value Phantom Stock Plan?

How does the Phantom Stock Plan work?

What is the book value of a company?

Who is eligible to participate in the Queen's Book Value Phantom Stock Plan?

Is participation in the Phantom Stock Plan mandatory?

How are the phantom stock values calculated?

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