The Cook Illinois Phantom Stock Plan is an employee incentive program implemented by Hercules, Inc. Phantom stock plans are an alternative compensation method that grants employees the opportunity to receive compensation equivalent to company stock without actual ownership of shares. This program is specifically tailored for Cook Illinois employees. Under the Cook Illinois Phantom Stock Plan, employees are awarded "phantom shares" that mirror the value of actual Hercules, Inc. stock. These phantom shares track the stock's performance, providing employees with potential financial gains if the stock price increases. Although employees do not receive actual stock ownership, they still enjoy the benefits associated with stock value appreciation. One of the key advantages of the Cook Illinois Phantom Stock Plan is that it aligns the interests of employees and shareholders, fostering a sense of ownership and commitment. Employees become motivated to work towards enhancing the company's performance, as their personal financial gains directly correlate to the success of Hercules, Inc. There might be different variations or types of the Cook Illinois Phantom Stock Plan, which Hercules, Inc. tailors to meet the specific needs and objectives of its Cook Illinois employees. These plans may differ in terms of vesting periods, payout structures, and eligibility criteria. For example, some plans may have a graded vesting schedule, where employees gradually gain ownership of phantom shares over a specified period. Others may have a performance-based component, where the number of phantom shares awarded is contingent upon achieving predetermined goals. Overall, the Cook Illinois Phantom Stock Plan offered by Hercules, Inc. provides Cook Illinois employees with a unique opportunity to share in the success of the company through a compensation method that closely aligns their interests with those of the shareholders. The program helps foster a positive work environment, encourages employee engagement, and incentivizes individuals to contribute towards the long-term growth and prosperity of Hercules, Inc.
Cook Illinois Phantom Stock Plan of Hercules, Inc.
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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.
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).
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. Thus, most phantom stock plans are exempt from the portions of ERISA pertaining to participation, vesting, funding and fiduciary responsibilities.
Stock options that qualify as incentive stock options (ISOs) are not subject to section 409A. (Companies may decide to use ISOs or non-qualified stock options (NSOs) for various reasons.)
Phantom stock is considered deferred compensation and is therefore subject to Section 409A, unless an exemption applies. As such, where an exemption does not apply, the payment triggers must comply with Section 409A.
Phantom stock is an employee benefit where selected employees receive benefits of stock ownership without the company giving them actual stock. It is worth money just like real stock, and 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).
Take a look at five tips for creating a phantom stock plan below: Understand what you are and aren't offering.Set a proper valuation.Create your shares.Decide how to award stock.Set a reward schedule.
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.
It is possible to create a phantom stock plan that avoids the application of 409A rules. The key requirement would be to (a) use cliff vesting (any incremental vesting must trigger immediate payment), and (b) pay benefits within 2½ months of the end of the year in which the awards vest.
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.