Stock Bonus Plans

A stock bonus plan is also similar to a profit sharing plan except that the plan must be designed to invest primarily in the stock of the employer. Stock bonus plans are often attractive to growing businesses wishing to provide an equity interest to their employees. Since the contribution to the plan is often made in stock, the employer's cash flow requirements may be temporarily alleviated. If the shares of stock are not publicly traded, the employer would ultimately be required to repurchase the shares when an employee retires or terminates employment...