What is restricted stock?

Restricted stock is stock that is subject to forfeiture to the company for no additional consideration or repurchase by the company at the original price paid, if any, until it vests.  The number of shares of stock that are subject to forfeiture or repurchase at the purchase price decreases over time in a way that is similar to the way that options vest over time.  Restricted stock is issued pursuant to a Restricted Stock Agreement with the company.  Restricted stock is a form of stock award preferable to some recipients for tax reasons usually when a company has only been formed a short time.  It is generally not available for most employees.  Founders frequently take restricted stock.    See Should founders take restricted stock?

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