Phantom Stock Plan

Phantom Stock Plan means:
a deferred-compensation plan that uses the employer's stock in the business as a measuring rod for determining the value of the compensation payment. Hypothetical shares of stock are allocated to the employee, and memorandum entries are made to his or her account as the stock price rises and/or dividends are paid on the actual stock. Eventually the accrued appreciation and/or dividends are paid in cash to the employee. The employee is subject to tax in the year when payment is made, and the employer is entitled to a deduction at the same time, on the same amount.

See Dividend in the American Legal Encyclopedia and Dividend in the World Legal Encyclopedia.