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International Ownership Plans for U.S. ESOP Companies
An NCEO Issue Brief
by Corey Rosen and Carine Schneider
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Format: PDF, 26 pages
Dimensions: 8.5 x 11 inches
Edition: 1st (May 2012)
Status: Available for electronic delivery
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General Design Issues
Organizational Structure Issues
The Phantom Stock Alternative
Stock Appreciation Rights
Employee Stock Purchase Plans
The Daymon Worldwide ESOP
International Trust Plans
The H.B. Fuller Plan
Appendix 1: Tax, Securities, Labor, and Data Privacy Issues for Selected Countries
Appendix 2: IRS Comments on Multinational Benefit Plans
Site and Operation of the Trust
Employee Eligibility Rules
Section 415 Contribution Limits
Contributions to the Plan
Appendix 3: Implementing a Global Stock Plan
Determining Your Team
Determining the Administration
From "The Phantom Stock Alternative"By far the most popular approach for ESOP companies to share ownership abroad has been to use phantom stock awards, although it may be a good idea to call them something else. "Phantom" is not a word that inspires confidence. The term also has no specific legal definition, so any term can be used. You could, for instance, call it a unit plan, a share tracking plan, a share equivalency plan, or an equity rights plan.
This section looks in detail at the issues raised by using these plans internationally, including tax, securities, labor, currency exchange, and data privacy concerns. These same issues will come up for all plans in different ways. Because it seems easier to understand these complex rules with application to an example of a plan, the discussion begins with phantom plans, the most common approach, and refers to how these rules apply to the other plans in subsequent sections.