Mandatory to be employee at time of Payout?

[c_surabhi]

What is the name of your state? CA

Hi

I was participant in my former company's profit sharing plan. It was a closely held private company.

The contract says any payout after termination of employment will be made after 24 months of termination and the amount is at the discretion of board of directors.

I have vested 100% of the units awarded to me while I was still with the company. The company had not paid anything for these units while I was with the company.

I had since left the company. Recently, I came to know that company had paid 80 cents per each unit and is in process of terminating the plan.

They have not contacted me or paid me anything.

Do I have any right since I had vested 100% while I was still employee? Can board of directors on their discretion deny my payment? what should be my next steps?

Thanks
surabhi

 

[Beth3]

The contract says any payout after termination of employment will be made after 24 months of termination and the amount is at the discretion of board of directors.

What contract?

 

[c_surabhi]

This is the profit sharing contract that I entered with the company. It says the following
" The termination amount if any would be paid in cash in 24 months from the date of termination of employment.

"A performance period starts and ends with fiscal year of the firm"


It also says the following,

"upon completion of a given performance period, each participants share will be paid out in cash. No participant shall be entitled to his or her share unless employed by the firm on the last date of perfromance period".

My vesting schedule started from January 21, 2002 and ended on December 1, 2004 with my units vested 100%. I left the company in July 2005.

Now the company has made payout in August 2006 only for those employees that were employed at that time.


Am I entitled to the payout in this scenario?

Thanks for spending time reading this

Surabhi

 

[Beth3]

I have doubts that what you are referring to is a contract but rather is the company's profit sharing policy. We also have know way of knowing if this is a "qualified" or "unqualified" benefit plan under federal regulations.

Only an attorney can advise you if it is actually an enforceable contract/benefit plan after reviewing the entire document.