SAYE US
About the plan
Participants in the Save As You Earn (SAYE) US plan save regularly over a three-year period in order to buy a certain number of Reuters American Depository Receipt shares (ADRs) at a fixed price (in US dollars) at the end of the three years. Every Reuters ADR share represents 6 Reuters ordinary shares. This fixed price is called the option price but this is also sometimes called the 'grant price'.
At the end of three years, participants can use their accumulated savings to buy shares at the option price. This is known as exercising the options. Participants then choose to either keep the shares or sell them to benefit from the difference between the option price and value of the shares on the day they are sold.
What will change for participants under the acquisition?
Immediately prior to the acquisition being completed, all outstanding options will accelerate and vest in full. Currently there are three outstanding SAYE awards (SAYE 23, 24 and 25) and all are included in the accelerated vesting. This means you will be able to exercise your SAYE options in full as if you had reached the end of the three year savings period.
In order to achieve this, the process will change slightly from what you have been used to:
- Since in most cases you will have not saved for the full savings period, you will not have accumulated enough savings to cover the full option price. Instead, upon exercise, we are expecting to use the cash portion of the acquisition offer and, if that is insufficient, a portion of the Thomson Reuters shares you are due to receive to pay the option price. This means you won't have to fund any of the option price yourself in order to exercise your option.
- For each Reuters share that would have been released and converted to an ADR, you will receive £3.525 in cash plus 0.16 of a Thomson Reuters PLC share. The Thomson Reuters PLC shares, less those needed to pay the option price, will be converted into Thomson Reuters ADR shares. For more information on this, see The Acquisition Offer.
- To convert the number of ordinary shares into ADR shares, divide the number of ordinary shares by six.
- You will receive a cash payment of 20% of the option price, delivered via payroll, shortly following the acquisition being completed.
- Mercer will return the savings you made under the plan to you in full plus any interest due.
- You will have six months from the accelerated vesting date to exercise your options. At the end of the six months, any unexercised options will lapse in full without any cash or other compensation. You must exercise your options to benefit from them.
As the shares you receive when exercising your SAYE options will be exchanged for cash and Thomson Reuters PLC shares upon exercise and you won't be able to retain the original Reuters Group PLC shares for the required amount of time, these plans may no longer receive favourable tax treatment. It is therefore anticipated that participants will be liable for tax withholding on this benefit.
In most instances, you will be able to choose to keep your new Thomson Reuters PLC shares or sell them and receive the cash proceeds less transaction fees.
You will be able to exercise your options online on the My Share Plan site from the date the merger is completed. An email will be sent to you once the online exercise facility is available. Exercise instructions will be processed by Killik once per week as per the normal SAYE exercise process.
Keeping your Thomson Reuters PLC shares
If you decide to keep your Thomson Reuters PLC shares when you exercise your options, any tax and option price deductions that need to be made will be applied to the cash portion of the share exchange. If there isn't enough cash to cover the necessary deductions, some of your shares will be sold to make up the difference.
However, you may elect to use your own money to submit the full option price with your exercise instructions. You will need to send a USD cheque, attached to a paper exercise form, to Killik. You will receive shares but applicable taxes will be withheld from the cash portion of the acquisition offer.
A Thomson Reuters PLC share certificate will be sent to you by Equiniti, the share registrar, within 14 days of the option exercise. Alternatively, you may choose to have the shares issued as an American Depository Receipt (ADR), in which case a Direct Registration System Statement will be sent to you by Mellon within 21 days.
If there is any cash remaining after the deductions, it will be paid by Killik within 4-6 weeks of the exercise, if not sooner; however, small payments of less than £30 will be paid to the Reuters Foundation unless you wish to receive a GBP denominated cheque (the international banking fees charged to participants are at least £25 per payment).
For more information about the Reuters Foundation.
Selling your Thomson Reuters PLC shares
If you decide to sell all your shares when you exercise your options, you will receive the cash portion of the acquisition offer and the sale proceeds, less any option price deductions, transaction fees and tax that is due. The payments will be made by Killik within 4-6 weeks of exercising your option, if not sooner.
You will be able to exercise your options immediately following the completion of the acquisition. However, should many employees elect to sell immediately, the market could be quite volatile and it might cause a detrimental effect on the price attained for the shares sold at that time.
Changes have been made to this page...
This page has extra information about what will be happening and we have been able to clarify some aspects of the process.
When we first posted information on this page, we expected the cash payable at exercise (the £3.525 per Reuters PLC share) would be paid via Payroll or Accounts Payable. To simplify matters, and to speed up the payment timing, in most instances, Killik will now be making these payments following the exercise of your options.
We also anticipated that most options would be exercised immediately upon completion of the acquisition in mid April. However employees will now be able to decide when to exercise their options over the following six months.