TheCorporateCounsel.net

July 12, 2003

Here is an interesting observation

Here is an interesting observation from Sue Morgan, a partner at Perkins Coie: She thinks it is very interesting that Microsoft apparently is actually going to grant restricted stock units, not “stock awards” in the usual sense. While the references in the conference call and articles are to “stock awards,” the Microsoft press release makes this one reference:

“While many companies provide stock awards, commonly know as restricted stock units, to executives, Microsoft is one of the first major corporations in which every employee will be eligible to become a direct owner of the company through Stock Awards.”

Sue confirmed this with someone at Microsoft, who said that “we are doing units, but they will be referred to as stock awards.” According to Sue, while restricted stock is actually outstanding stock, restricted stock units are units of stock that are recorded in an account and paid out in shares as the units vest. As with other companies that have granted restricted stock units rather than restricted stock, one of the reasons is most likely to avoid the Section 83(b) election morass that comes with actual awards of restricted stock.