Restricted option is a kind of stock option that the company gives directly to the manager in the form of reward, as an incentive to become a member of the company or continue to serve in the company.
The restriction is that when the award recipient leaves the COMPANY before the expiration of the time limit specified in the award, the company will take back the award shares.
Restricted stock options are also called conditional stock options.
This is a general form of corporate reward management, by the company directly to the beneficiary of stock options, the beneficiary does not need to pay anything to the company, as an incentive for the beneficiary to stay in the company.
The restriction is that if the exerciser leaves the company before the expiration of the time limit specified in the award, the company will withdraw the option on these awards.
It is an incentive mechanism designed specifically for a specific plan, under which senior executives are limited in their right to sell stock, and only when the senior management has achieved a predetermined target and the company’s stock price has reached a target price, can the senior management sell restricted stock and benefit from it.
The Company may freely gift restricted stock to senior management, who may purchase restricted stock at a price well below the market price, but the company has the right to take back restricted stock gifted by the company or repurchase restricted stock at the price at which the senior management purchased it.