Technical Question - Spreading Public Comps - RSU/PSU Inclusion or Exclusion?

Hey Guys,

I wanted to get a general sense for how folks are treating RSU/PSU in their fully diluted equity value calculations when spreading public comps. I've heard arguments for both full inclusion ($0.00 strike price) and exclusion. TTS, I believe suggests full inclusion.

When negotiating M&A deals with a counterparty, say if you're on the sellside, your client's unvested options are typically cancelled and a new option plan is setup for management and key NewCo employees. Applying the same logic in public comps, I would think including all outstanding RSU/PSU should be considered cancelled and non-dilutive as technically we are uncertain when the restriction will be lifted (vesting) or when the performance criteria will be met.

If you go down the full inclusion path, you could have a 5-10% greater equity values for certain companies that have large amount of RSU/PSUs outstanding.

Looking forward to everyone's responses.

MessageVik