What is a Restricted Stock Unit Agreement? - Posted on 01 September 2008

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What is a Restricted Stock Unit Agreement?


http://legal.realdealdocs.com/index.php/2008/09/01/what-is-a-restricted-stock-unit-agreement/

 


Posted on 01 September 2008



A Restricted Stock Unit Agreement
is an agreement made between a company and a recipient or purchaser of
that companies restricted stock, usually an employee. A Restricted
Stock Unit is a grant valued in terms of company stock, but in such a
situation, company stock is not issued at the time of the grant.


Common in corporate settings, Restricted Stock Unit Agreements
must identify the parties and the number of restricted shares being
awarded. The agreement should refer to specific provisions of the employment agreement
in terms of addressing the issue of the termination of the employee’s
employment with the company. Generally, if the employee is terminated
without cause, then he gets to keep the shares and they lose their
restricted status. If the company terminates the employee for good
cause, then the employee usually loses the shares altogether.


Usually entered into by an employer and an employee, a Restricted Stock Unit Agreement
is a critical part of enticing the employee to stay with the company
and, by tying the employee’s financial interests to those of the
company, motivates the employee to perform at his her best.


Attachment.

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This post was written by:


Ross Yader - who has written 56 posts on Legal Research Center.


A
graduate of the University of Miami Law School, the author of this
article, Ross Yader, is a California-licensed attorney currently
working in private practice in Los Angeles, where his focus is on
business and entertainment litigation and contracts. Before going to
law school, Mr. Yader graduated with a Bachelor of Science in
Government & Politics from the University of Maryland-College Park
and worked as a financial analyst in the Business Affairs division at
AOL-Time Warner. If you are interested in contacting Mr. Yader
regarding possible employment or would like to speak to him about a
legal matter, please contact him through the email form below or via
telephone at (310) 820-4008.


Contact the author



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