Restricted Stock Award Plans

Restricted Stock

Ownership can be a powerful tool in the effort to attract and retain talented people, have employees think and act like owners, create an ownership culture, and build successful succession plans.

Restricted stock gives employees the right to earn shares of stock over some period of time through continued service or the accomplishment of certain goals. Restricted Stock Award (RSA) Plans have many options, and when properly designed, will provide your Company with an equity compensation plan that works. Advantages include:

  • Restricted Stock Award Plans either grant shares at no cost, or provides employees with the right to purchase shares at fair market value or at a discount.
  • RSA shares are subject to vesting requirements; vesting may occur all at once or gradually. The restrictions may be time, performance, and/or transaction based.
  • Restricted shares may be issued at grant; RSA shares remain subject to vesting restrictions; however, the shareholder receives dividends, has voting and other rights before vesting.
  • Employer may loan money to the awardees for purchase of the restricted shares. The RSA Plan gives key employees the ability to own shares.
In the M&A world, Restricted Stock Award Plans assist in the process of maximizing the value of your Company.