You Can Keep that RSU if You Leave—Provided You Follow the Rules

Restricted stock units (RSUs) are a popular form of executive compensation which grant the recipient the right to receive company shares or a cash equivalent at a specified future date. These units often come with conditions based on time or performance before they vest. Additionally, RSU awards may be subject to forfeiture of unvested units or even clawback of a vested award, such as if an employee leaves for a new job and violates a restrictive covenant (e.g., an award provision prohibiting competition with the employer, solicitation of clients and employees, or disclosure of the employer's confidential information) by (or after) doing so. Such restrictive covenants often are built into the award agreement.

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• Equity Award Grant Policy (Public Company)
  Use this template to establish procedures public companies should follow when granting equity awards to employees and consultants. Incentive awards, like RSUs, typically contain important limitations, restrictions, and other provisions that govern the terms of outstanding awards, such as vesting schedules and the consequences that may arise on the occurrence of certain events, such as a change in control, the termination of the grantee's employment, and the application of a clawback policy.

• Clawback Policy Design and Tax Issues
  See how maintaining a strong clawback policy, and enforcing it, sends an important message to shareholders, but it can also discourage workers by keeping earned compensation at risk. In crafting or reviewing a clawback policy, carefully balance these competing concerns and consider the enforceability of the clawback obligation, the collectability of any claim for clawback, and the employee relations impacts of a broad clawback policy.

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