I worked for a company that offered 5000 shares upon signing the employment agreement that vest at 20% a year. After I was employed for a year and 25 days the company decided to relocate and lay off some employees. There was no equity forfeiture clause in the contract in the event of termination. Furthermore the contract stated that in the event of a liquidity event all shares vest immediately. The company was purchased a few weeks ago. The CEO maintains that I am not entitled to <i>any</i> shares because although the signed employment agreement was executed by both parties I didn't relocate and and get on payroll until a few days after the employment agreement was executed. I had code written and meetings that occurred during the time he claims I was not an employee.<p>Two things --<p>First, does the date on the employment contract mean that I was an effective employee on that date?<p>Secondly, does the fact that the 5000 shares were assigned to me with no details as to what happens upon termination mean that I still own those 5000 shares?<p>The liquidity event (acquisition) occurred and other employees were paid for their shares. I reached out to the CEO and he stated that I owned nothing.<p>My thoughts -- I definitely am entitled to 1000 shares. Also due to the ambiguous (non-existent) details of what happens to the 5000 shares upon termination I think I may be entitled to be paid for those as well.<p>What are HN's thoughts on this situation?
Find a lawyer -- basically any will do. He'll send them a sternly written letter, which is going to say a variant of "You can make this go away cheaply or you can fight it in court if you have a lot of confidence in how airtight your paper is. Your call."<p><i>I had code written and meetings that occurred during the time he claims I was not an employee.</i><p>Your lawyer will have a <i>lot</i> of fun with a newly rich entity which desires to commit to the position on paper that it has stolen your IP. The acquirer's legal team are also going to raise holy hell about representations made during due diligence, because "WHAT?!"<p>Relevantly to the entrepreneurs in the room: this is why you pay somebody to make sure your paper says what you think it does prior to e.g. issuing equity grants.
Did you exercise the shares when you left the company? Do you have emails or dated letters which can be used to support this?<p>Usually you have 90 days from your last day to do this (in writing, with the onus totally being on the employee), otherwise the options transition back to the company.
You seem to be contradicting yourself here:<p>"After I was employed for a year and 25 days the company decided to relocate..."<p>"I didn't relocate and 100% work with the company until 2 days after my one year anniversary."<p>But regardless, you should probably get yourself a lawyer.
You never know, and IANAL, but the acceleration clause in your agreement probably does not automatically vest the shares of people not currently employed by the company at the time of the sale.<p>Do you have options or shares? If options: did you execute? If you didn't, you may have problems.
The strength of your claim will likely depend on the specific wording of the contract and circumstances of employment. For example, are they shares, or options that required extra exercise steps/payments at certain times? Exactly what language is used to describe the vesting? (It seems a long shot that you'd be due the full 5000 shares if your employment clearly ended before the liquidity/vesting event: the whole point of vesting is to curtail the equity in the hands of those who have quit or been fired. But conversely, a true year of vesting means something was due you.)<p>But, semi-anonymous commenters on the internet are not the help you need. You need competent legal advice.<p>You could get this from a lawyer in private practice, but also perhaps a legal clinic (often associated with law schools) or perhaps any employee-protection government agency in your or the company's jurisdiction.<p>Note that while you're shopping for a lawyer, you'll often get 30+ minutes of their help for free, as they find out if the case interests them, and they discuss what steps are possible, at what costs, and to what benefit. It is very beneficial to talk to multiple lawyers at this stage: you may be amazed how wildly different their recommendations are, from the same documents and core facts, based on their varying styles and expertise. (As a non-expert yourself, engaging the first one with a good story is a big mistake. Picking one from among 5+ that you've talked to, because in comparison he had the most insight, is better.)<p>Get together your paperwork – especially the contract and any other key documents demonstrating your employment relationship (such as key dates where it began/changed/ended). Also, type up a more detailed timeline of relevant events with exact dates, involved people, and agreements/document-excerpts. (Perhaps that's just a page or two.)<p>Then, use that to shop around. Even if your first few inquiries are to the wrong kind of firms – by specialty or size – they'll then suggest more appropriate alternatives.<p>Offer to email the contract & timeline to any professional who wants details before they confer with you. You'll learn a lot from these discussions even before you're paying anyone on the clock – if it ever comes to that. You'll probably even want to improve the timeline once your first few conversations help focus your attention on the key aspects.<p>And if the case is really strong – the plain language of the contract and typical understanding of your tenure means you're due shares – it may just take a strong letter from a credible attorney to receive a settlement.
This is all to common. I am currently in a not an entirely dissimilar situation.<p>What I have learned from it I would tell anyone working at a Startup. When your grant comes due make them give it to you. Get a lawyer then if need be.<p>Now to the "I'm not a lawyer advice."<p>In most states you have 1 year to claim things not given to you under an employment agreement. As long as your year is not up you may have a case. If you are past a year your options may be limited.<p>Now a list of questions you need the answer to.<p>Were you granted Shares or Options?
An Option would have to be executed with in a given amount of time. A share is actual equity in the company, but an option is the ability to buy a share for a set price. Often you are given an options grant based on the "strike price" on the day you were hired. If the company had raised money at $5m Valuation, and sold for $25M and you had 1% of the company, you'd get 1% of $20M. Because your Buy price would be based on the valuation of the company when you were hired.<p>If you didn't exercise an option after termination you don't own any shares.<p>Did you sign anything on termination?<p>Most of the time the exit agreement which often includes a severance becomes the document that says, "We don't owe you nothing" and is very hard to fight.<p>Two questions may not be a "list" but I think those two will suffice for now.
Thanks everyone -- I knew engaging a lawyer was the next step after the CEO was non-responsive but having other tech professionals and entrepreneurs chime in with some insight was very valuable. Thank you all for your interest and advice.
OP should find an attorney. Also, OP is presumably now on the market? :) Willing to relocate to SFBA?<p>CEO should not screw people over (presumably) tens of thousands of dollars in a much larger deal. And should have been more competent w.r.t. contracts.
The options agreement was included in the employment contract?<p>In my experience they've been two separate documents. If you do have both (or if they were combined) signed then you should absolutely contact a lawyer.<p>They'll contact the company and then the company will contact their lawyer, who will most likely tell them to just give you what you're entitled to.