Restricted Stock Units are shares of stock that an employee is eligible for after a certain restriction is fulfilled. Typically, the restriction is time-based, but it can be tied to just about any other factor.
Once an employee is granted Restricted Stock Units, the employee must decide whether to accept or decline the grant. If the employee accepts the grant, he or she may be required to pay the employer a purchase price for the grant. Each company structures these in different ways.
After accepting a grant and providing payment (if applicable), the employee must wait until the grant vests. Vesting periods for Restricted Stock Units may be time-based (a specific period from the grant date) or performance-based (tied to achievement of specific corporate goals). Once the Restricted Stock Units vest, the employee receives the shares of company stock or the cash equivalent (depending on the company's plan rules).
