TUPE advice needed re: RSUs and ESPP / shares

[fat80b]

I know the answer is "go speak to a professional" and will likely do that but on the off chance that there is a TUPE expert in the house :

If someone (in the UK) is being transferred from a large US firm (where they have outstanding unvested share options) to a small US firm (also floated) and as part of their existing package have both RSUs and access to an ESPP plan which combined have resulted in an additional 50% of income for the last few years.

Would you expect that there would be some kind of transfer / payout / replacement RSU plan as part of the TUPE process. At the moment, the indication is that any unvested shares will be forfeited with no replacement.

I've found https://www.cwj.co.uk/site/newsandevents/legalnews... which is kinda related.

Does anyone have any experience in this area?

[fat80b]

Bump for the evening crowd.

[deja.vu]

First thing to do is to look at the terms on the RSU’s.
I’ve been part of a big US Tech that what purchased by a bigger one and dependant on the issue, there were several terms.
All of mine vested on change of ownership, but others didn’t.
Those that didn’t were transferred to the new company stock, relative to share price.
If old stock was at 5 and new at 10, you’d get half the RSU”s.

Does the new place have a similar ESPP plan?
What’s the duration of yours? ( mine is 2 years, 4 x 6 months).
And where in the cycle are you?

The high profit on the ESPP is irrelevant ( I believe) as that’s a function of the growth on stock price which isn’t guaranteed.

[fat80b]

deja.vu said:

First thing to do is to look at the terms on the RSU’s.

Thanks - I think I'm less bothered about the ESPP tbh. So far we've been told that any unvested RSUs will be forfeited.

In terms of TUPE and RSUs though - I can't find anything (apart from the thing above) that says whether or not they have to replace the RSUs as part of the TUPE transfer - there is generic wording on the .gov website that says "changes have to be agreed" and "The new employer cannot change an employee’s terms and conditions if the reason is the transfer itself." but I've no idea if that might apply to RSUs or not.

Edited by fat80b on Thursday 30th March 10:33

[deja.vu]

i've been through two acquisitions
First time change of ownership triggered vesting.
Second time the RSU's were converted into the new company

Have a look at the offer document you signed

My current one basically states they have the absolute right to modify, suspend or terminate the plan at anytime and that my participation is voluntary and is not part of my employment contract.

[fat80b]

deja.vu said:

My current one basically states they have the absolute right to modify, suspend or terminate the plan at anytime and that my participation is voluntary and is not part of my employment contract.

There was a "letter" that was signed separately to the contract, and it looks like the plan is to forfeit them all with no plan to replace like-for-like which is a bit of a bummer because it's a 6 figure sum which would have continued vesting every 3 months for the next two years....

I'm looking as to whether they can do this? but it seems like they think they can even though there is case law that suggests that share plans have to be covered as part of TUPE.

.........But on the other hand, I need to wait and see what an "offer" from the new place entails. They may do something to sweeten the deal but who knows.

[cavey76]

Like others, has happened to me twice. In both cases the existing companies RSUs have converted to cash at the price of the acquisition then paid out as per the original term.

Sounds an odd set up for a tech firm to want to p*ss on their employees by getting rid. I'da thought they would want to motivate and keep skilled employees by making this a positive outcome.


For instance my latest employer was approached as part of a very public acquisition a couple of years back. We were all offered $xxxK RSUs vesting over a much reduced term, the idea being to steady the ship during acquisition. Acquisition fell apart and after a couple of months of grumbles and disappointment at the promised but then gone RSUs the original company came back and offered the same amount again, normal 3 year cycle but was a great motivator and retention device during a period when staff were unsure of themselves and their place in the world.