What happens to unvested RSUs when a public company is bought out by private firm?
This is kind of similar to the question in here but a bit specific to a particular situation. My company ( a public company ) was recently bought by a private company. In the agreement, it said all vested RSUs will be bought at a certain price. But regarding unvested RSUs, the notice had
Unvested options and unvested RSUs will be treated as follows:
Unvested options and RSUs will be converted into the right to receive the Option Consideration or the RSU Consideration, respectively, to be payable to such employees in accordance with the current options/RSUs vesting schedule, subject to their continued employment or services.
In the event an employee eligible for Option Consideration or fiSU Consideration is terminated other than for cause by the buyer within 12 months after the closing, such employee will receive the greater of the Option Consideration or the RSU Consideration, respectively,
(i.) had such unvested options or unvested RSUs vested until the one year anniversary of the closing and
(ii) had the unvested options or unvested RSUs accelerated pursuant to the existing acceleration provisions in the award agreements for such unvested options or unvested RSUs.
I was bit confused about this. What is right to receive the RSU consideration? The second condition mention in case the employee is terminated. I assume the same will be applicable if employee leaves the company which makes it important for me as well as I will be leaving the job soon. Can someone explain this please?
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I would ask your HR or benefits department to be certain, but here's how I read that without any specific knowledge of the situation:
What is right to receive the RSU consideration?
Company A was bought by Company B. You had unvested Restricted Stock Units in A, which is now gone. B is saying that you now have the right to receive consideration equivalent to the value of those RSUs in A. Since B is private, there's no publicly traded stock, so it will likely be in cash, but read the rest of the paperwork or talk to HR to be certain.
For example, if you had 100 RSUs vesting next year and the price of stock in A was when the company was bought, those RSUs would be worth ,000. B is give you the right to consideration for those RSUs, hopefully for somewhere around ,000. That consideration is unvested, meaning you must stay employed until the vesting period in order to claim that right.
If you are fired without cause (i.e. laid off), you will receive those unvested claims as compensation.
I assume the same will be applicable if employee leaves the company
Probably not. In any situation, if you voluntarily leave a company, any unvested stock, RSUs, options, etc. are forfeited.
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