What are RSA shares and RSA units?
An RSA share is a grant of company stock in which the recipient's rights in the stock are restricted until the shares vest (also known as "lapse in restrictions"). This period of restrictions is called a vesting period.
An RSA unit is a grant valued in terms of company stock, but the company stock is not issued at the time of the grant. Once a recipient of an RSA unit satisfies the vesting requirement, the company distributes shares or cash equivalent to the number of shares used to value the unit.
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How do restricted stock award plans work?
Once you are granted a restricted stock award, you must decide whether to accept or decline the award. If you accept the award, you may be required to pay your employer a purchase price for the award.
After accepting an award and providing payment (if applicable), you must wait until the award vests. When the award vests, you receive the shares of company stock or the cash equivalent (depending on your company's plan rules) without restriction.
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How is a restricted stock award different from control and restricted stock?
A restricted stock award is a form of equity compensation that is subject to a contract (grant agreement) that restricts the recipient's rights according to the rules of the equity compensation plan. Control and restricted stock involves unregistered shares of stock that are restricted by SEC Rule 144.
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What happens to my restricted stock award if I retire, die, or become disabled?
There are usually special rules in the event you retire, die or become disabled. See your employer's plan rules for details.
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VESTING
When do RSAs vest?
Vesting requirements may be met by the passage of time, or by company or individual performance. If you do not meet the requirements set forth by your company prior to the end of the vesting period, your shares are typically forfeited to the company. Vesting may occur prior to the vesting date shown, contingent upon your company's satisfaction with your compliance with the company's performance criteria set forth in your company's plan rules.
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What happens to my restricted stock award once it vests?
Once the holding period has been met, the shares or cash equivalent (depending on your company's plan rules) of company stock are automatically deposited into your Stock Plan Account. Once the shares have vested, you own them outright, and may hold, sell, or otherwise dispose of them without risk of forfeiture. If your award is paid in cash, you may use the cash as you would any other cash in your Stock Plan Account.
