RSUs and withheld taxes

Question

A number of RSUs vested for me on the first of this year, but weren't released until mid-March due to an unreleased 10k. During this period, I switched jobs mid-February, and I was terminated at the moment I gave notice.

We are now in the process of exercising those RSUs, however somethings have apparently changed, since I am no longer an employee. Previously, when exercising RSUs, I was given several options. I could:

1. Issue a separate payment to the company to cover taxes.
2. Have the amount withheld from the next paycheck from date issued.
3. Have the shares issued to an account, and some sold and the applicable amount remitted to the company.
4. Have the company withhold shares from the vested amount to cover the required taxes.

However, now, I am being only offered the option to issue a separate payment (or, at least, being requested to issue a separate payment). I have a couple questions that accompany this.

• Doesn't option 1 create more work?
• Should I still be allowed the other options, given the original signed agreement? The only clause involving the separation of the employee and employer was that shares not vested were forfeit, which was pretty straight forward. These vested while I was an employee, but are being issued while I am not.
• Are there, if any, benefits to simply issuing separate payments to cover taxes on RSUs?

Answer 1

Making a cash payment to cover the taxes when RSUs vest is essentially equivalent to spending the same amount to buy shares on the open market. Does that sound like something you would want to do? If so, you don’t need to tie that purchase to the RSU vesting event; you can buy at any time and price that suits you.

In other words, no, there’s no benefit to making a payment to cover the taxes.

Obviously you cannot use option 2. I’m not sure what the difference is between options 3 and 4, but that’s the one you want.