The differences between stock options and restricted stock lie in four areas: symmetry of rights and obligations, symmetry of rewards and penalties, waiting period versus confinement period and exercise price versus grant price. Both stock options and restricted stock are grants of a certain number of shares of the Company's stock by a listed company to employees who have made a performance, but restricted stock needs to be transferred only on the release date.
1, The difference between stock options and restricted shares
(1) The symmetry of rights and obligations is different. Stock options are a typical incentive model with asymmetrical rights and obligations, which is determined by the essential attributes of options as financial instruments.
(2) The symmetry of rewards and penalties is different. As the symmetry of rights and obligations is different, the symmetry of incentives and penalties is also different. (b) Stock options are not punitive in nature.
(3) Waiting period, lock-up period and other provisions. (ii) There is a waiting period (more than one year) after the grant of a stock option into the exercise period.
(4) The difference between the exercise price and the grant price. The exercise price of stock options is the price determined when the listed company grants stock options to the incentive recipients and the incentive recipients purchase shares of the listed company.
2, When the restricted shares can be unsold
Restricted shares can be unsold on the release date. Restricted shares are the shares of the Company with some rights restricted such as transfer, which are acquired by the incentive recipients in accordance with the conditions stipulated in the equity incentive plan. Restricted shares may not be transferred, used as security or to repay debts until the restricted shares are released from sale.
3, Grant price of restricted shares
When granting restricted shares to incentive recipients, the listed company shall determine the grant price or the method of determining the grant price. The grant price shall not be lower than the par value of the shares and, in principle, shall not be lower than the higher of the following prices.
(1) 50% of the average trading price of the company's shares one trading day prior to the announcement of the draft Share Incentive Scheme;
(2) 50% of the average price of the company's shares traded for 20 trading days, 60 trading days or 120 trading days prior to the announcement of the proposed share incentive scheme.
If the listed company adopts other methods to determine the restricted share grant price, it shall explain the pricing basis and pricing method in the equity incentive plan.
