What most often happens to an employee who holds an unvested restricted stock award when a company issues a stock dividend to investors?
A. Nothing. The holder of an unvested RSA is rarely entitled to dividends on unvested awards.
B. The company issues unrestricted stock to the employee in the same amount as if the shares were vested.
C. The company issues unvested restricted stock to the employee in the same amount as if the shares were vested. The dividend stock vests over the same period as the RSA stock.
D. The company pays the employee the cash equivalent of the amount he would have received if the stock were vesteD.
Answer:C
What most often happens to an employee who holds an unvested restricted stock award when a company issues a stock dividend to investors?
A. Nothing. The holder of an unvested RSA is rarely entitled to dividends on unvested awards. B. The company issues unrestricted stock to the employee in the same amount as if the shares were vested. C. The company issues unvested restricted stock to the employee in the same amount as if the shares were vested. The dividend stock vests over the same period as the RSA stock. D. The company pays the employee the cash equivalent of the amount he would have received if the stock were vesteD.
Explanation: Restricted stock awards frequently carry the same dividend rights that are available to other shareholders. In most cases, the dividend shares are subject to the same restrictions as the shares under the grant, meaning they will also be subject to the vesting schedule.