What term describes stock with rules about when it can be sold, usually with a time-based vesting on transfer?

What term describes stock with rules about when it can be sold, usually with a time-based vesting on transfer?

• A. Common Stock
• B. Phantom Stock
• C. Restricted Stock
• D. Stock Option

Answer: (C)

This describes restricted stock: actual shares issued to an employee with rules about when they can be sold or transferred, typically tied to a time-based vesting schedule. As you stay with the company and meet the vesting milestones, the restrictions lift and you gain full ownership, allowing sale or transfer. If you leave before vesting, the company usually has the right to repurchase or cancel those unvested shares. This differs from stock options, which are rights to buy shares in the future (not actual shares right away), and from phantom stock, which pays out a cash or equal-value benefit without issuing real shares.

This describes restricted stock: actual shares issued to an employee with rules about when they can be sold or transferred, typically tied to a time-based vesting schedule. As you stay with the company and meet the vesting milestones, the restrictions lift and you gain full ownership, allowing sale or transfer. If you leave before vesting, the company usually has the right to repurchase or cancel those unvested shares. This differs from stock options, which are rights to buy shares in the future (not actual shares right away), and from phantom stock, which pays out a cash or equal-value benefit without issuing real shares.