The Tricky World of Reporting Stock-Settled RSUs on Form 4s

Not too many choices exist in the technical world of Form 4 reporting. But there is a choice to be made for reporting grants of stock-settled, time-based restricted stock units (RSUs). For Section 16 nerds like me, this is as thrilling as it gets. These grants can be reported on a Form 4 in either Table I as an acquisition of common stock (even though still subject to vesting) or in Table II where derivative securities are reported. Practices vary by companies. From time to time, in-house counsel may be asked by their Section 16 insiders about why the company reports its RSUs in the manner selected. Let's dig into the nerdy stuff: To report RSUs in Table II of Form 4:

• Report the grant in Table II and footnote the vesting schedule.
• On each later vest date, report in Table II the conversion of the RSUs into underlying shares.
• On each later vest date, also report in Table I the acquisition of the underlying shares.

• Report the grant in Table I. Footnote about vesting is not required but can be included.
• No later reporting on each vest date is required.