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After you exercise your options, you can usually either keep the shares or sell them.
A company's equity incentive plan (sometimes called the employee stock option plan) is a document that outlines the company-wide program of awarding or granting various types of equity compensation.
After you vest your RSUs, you own the stock and can keep it or sell it. Even if you leave your company, you still own the stock. For example, let's say you are granted 10,000 RSUs when you start working at your company, with the vesting schedule just described.
The underlying company stock is not issued until the RSUs vest. When an employee receives Restricted Stock Units, they have an interest in the company's equity, but the units have no tangible value until they vest. Once the RSUs vest, the employee can keep, sell, or transfer the shares, just like any other stock.
Restricted shares are unregistered, non-transferable shares issued to a company's employees. They give employees incentives to help companies attain success. They are most common in established companies that want to motivate people with an equity stake. Their sale is usually restricted by a vesting schedule.
Vesting Schedule The restricted stock units are assigned a fair market value when they vest. Upon vesting, they are considered income, and often a portion of the shares is withheld to pay income taxes. The employees receive the remaining shares and can sell them at their discretion.