Restricted stock units (RSUs) are rights to acquire stock without paying an exercise or purchase price. Vesting and settlement must comply with Internal Revenue Code Section 409A. Generally, shares must be issued (and taxation triggered) shortly after the vesting date. While private companies commonly use a liquidity event as a vesting trigger for RSUs in order to defer taxation until there is liquidity, care must be taken at the time of grant to determine whether the liquidity event constitutes a substantial risk of forfeiture under Section 409A. Alternatively, RSUs can be structured to comply with Section 409A deferred compensation rules.