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Restricted Stock: Restricted Stock Units

What are the top 10 questions I should ask about my grant of restricted stock or RSUs?

You should know the answers to the following questions. Understanding the topics involved will help you make the most of your restricted stock/RSU grant and prevent costly mistakes.

1. Do I have a grant of restricted stock or a grant of restricted stock units? What are the key differences?

2. Is formal acceptance of the grant required? What happens if I don't accept the grant before vesting?

3. What is the vesting schedule?

4. Is vesting based on duration of employment or on performance goals?

5. What would happen to the vesting of my grant if I were to leave or lose my job, die, become disabled, or retire?

6. When the shares vest, what account will they appear in?

7. How does the tax withholding work?

8. With RSUs, can I defer the delivery of the shares at vesting?

9. If my company pays dividends to shareholders, will I get dividends on my restricted stock? If so, when? What if I have a grant of RSUs instead?

10. What would happen to my restricted stock in a corporate acquisition or merger?

In addition, you should understand the tax treatment, the reporting on your Form W-2 (whether for restricted stock or RSUs), and the related tax return reporting. This website's Tax Center covers all tax topics involving stock compensation.

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