I'm trying to understand what might happened to a company's employee time based RSUs in case of a merger. To do that I'm looking at what happened with the AOL merger:


To the best of my understanding, there are 3 cases:

  1. Time based RSUs that employee holds and are vested.

  2. Time based RSUs that employee holds and not yet vested.

  3. Future time based RSU, that would have been vested if the merger were not to happen and the employee would have still been employed.

From the linked document, I understand what would happen in the first 2 cased. but what would happen in the 3rd one?

For the discussion let's assume the standard vesting schedule (25% after 1 year cliff and then RSUs vest monthly) And as an example, let's take an employee that joined exactly 1 year and 15 days before the merger, and got total 100 RSUs (after dollar to RSU conversion).

According to the linked document, he would get the "Per Share Merger Consideration" for his 25% vested RSU (1st year), and for the 1.04% (for the 15 days unvested)

But if the merger were not to happen and this employee would have continued to work for the company for 3 more years (minus 15 days) - he would of got the remaining ~74% of the RSU. From the linked document I cannot understand what happens to those (future) RSU?

What generally can an employee except for that in case of a merger?

In case of a company that goes private - what usually happens to unvested RSUs?

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