What is the name of your state (only U.S. law)? MS
I have a 2 part question.
Scenario 1: I was with X startup company for about 9 years, during which time the company had some financial troubles and asked employees to take a 10% pay cut. In return we were verbally promised we would get 2x that amount in stock. The company has sense been acquired and I have thus resigned from the new company. Meanwhile I assumed the entire time my money / stock was accounted for. The new company has sense sold a portion of the company for a tremendous gain. I went to collect and they have stated I forfeited my stock when I resigned due to legal verbiage in Question 2 which in my opinion should have nothing to do with Question 2 as they are completely different transactions.
Scenario 2: While I was employed with this new company I was offered X amount of common stock (Nonstatutory stock option).
Vesting Schedule
“Subject to the company’s 2011 stock option plan, so long as your employment or consulting relationship with the company continues, the shares underlying this option shall vest and become exercisable in accordance with the following schedule: 10% of the shares subject to the option shall vest and exercisable upon grant. The remaining 90% of the total number of shares subject to the option shall vest and become exercisable on a monthly basis thereafter (2.5% each month) beginning on the first anniversary of the vesting commencement date and ending on the fourth anniversary of the commencement date. If your relationship with the company is terminated for any reason, the option shall terminate with respect to all unvested shares underlying this option.”
Termination Period
This option may be exercised for 90 days after termination of your employment or consulting relationship, except as set out in section 5 of the stock option agreement (but in no event later than the expiration DATE). The optionee is responsible for keeping track of the exercise periods following termination for any reason of his or her service relationship with the company. The company will not provide further notice of such periods.
Exercise upon termination
Following the date of termination of optionee’s continuous service status for any reason, optionee may exercise the option only as set forth in the notice and this section 5. To the extent that optionee is not entitled to exercise the option as of the termination date, or if optionee does not exercise the option within the termination period set forth in the notice of the termination periods set forth in this section 5, the option shall terminate in its entirety. In no event may any option be exercised after the expiration date of the option as set forth in the notice.
Conclusions:
Post my resignation I did consulting work on and off for about 4 months for them building up an invoice that was never paid. My argument is that Scenario 1 is in no way under the agreement for Scenario 2 as I paid for those options years before Scenario 2 existed. My argument for Scenario 2 is that my consulting was never terminated and per the agreement it continued to accrue. What are your thoughts? Do I have valid legal grounds here?
I have a 2 part question.
Scenario 1: I was with X startup company for about 9 years, during which time the company had some financial troubles and asked employees to take a 10% pay cut. In return we were verbally promised we would get 2x that amount in stock. The company has sense been acquired and I have thus resigned from the new company. Meanwhile I assumed the entire time my money / stock was accounted for. The new company has sense sold a portion of the company for a tremendous gain. I went to collect and they have stated I forfeited my stock when I resigned due to legal verbiage in Question 2 which in my opinion should have nothing to do with Question 2 as they are completely different transactions.
Scenario 2: While I was employed with this new company I was offered X amount of common stock (Nonstatutory stock option).
Vesting Schedule
“Subject to the company’s 2011 stock option plan, so long as your employment or consulting relationship with the company continues, the shares underlying this option shall vest and become exercisable in accordance with the following schedule: 10% of the shares subject to the option shall vest and exercisable upon grant. The remaining 90% of the total number of shares subject to the option shall vest and become exercisable on a monthly basis thereafter (2.5% each month) beginning on the first anniversary of the vesting commencement date and ending on the fourth anniversary of the commencement date. If your relationship with the company is terminated for any reason, the option shall terminate with respect to all unvested shares underlying this option.”
Termination Period
This option may be exercised for 90 days after termination of your employment or consulting relationship, except as set out in section 5 of the stock option agreement (but in no event later than the expiration DATE). The optionee is responsible for keeping track of the exercise periods following termination for any reason of his or her service relationship with the company. The company will not provide further notice of such periods.
Exercise upon termination
Following the date of termination of optionee’s continuous service status for any reason, optionee may exercise the option only as set forth in the notice and this section 5. To the extent that optionee is not entitled to exercise the option as of the termination date, or if optionee does not exercise the option within the termination period set forth in the notice of the termination periods set forth in this section 5, the option shall terminate in its entirety. In no event may any option be exercised after the expiration date of the option as set forth in the notice.
Conclusions:
Post my resignation I did consulting work on and off for about 4 months for them building up an invoice that was never paid. My argument is that Scenario 1 is in no way under the agreement for Scenario 2 as I paid for those options years before Scenario 2 existed. My argument for Scenario 2 is that my consulting was never terminated and per the agreement it continued to accrue. What are your thoughts? Do I have valid legal grounds here?
