Community RSUs are an equity compensation vehicle similar to traditional RSUs designed for issuing equity compensation pursuant to Rule 701 to employees, directors, general partners, certain business trusts, officers, consultants, and advisors.
Community RSUs leverage a double-trigger design to delay tax obligations for the issuing organization and receiving individual until liquidity is available for the realization of gains and payment of taxes.
Issuers have full flexibility in defining any time or performance based vesting requirements for the issuance of Community RSUs. Issuers also maintain full control to determine the underlying rights, and can issue Community RSUs whereby the underlying rights of such are Community Safe interests or Community Shares.
Unlike stock options that require the satisfaction of taxes upon exercise, a point at which there may be no liquidity to sell such equity to pay for the accompanying taxes, Community RSUs delay issuance and therefore tax obligations until a qualifying liquidity event to make equity compensation easier and more feasible for everyone involved!
Qualifying liquidity events include an IPO, M&A sale, direct listing, Healthy Secondary Exchange, and anything else you and your counsel define.