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60

Yes. Any contributions you make to your own 401(k) are yours - irrespective of when the contributions were made. Contributions made to your 401(k) by your employer might be subject to a vesting schedule, in which case you may own all, some or none of them - depending on the vesting schedule and period of time since the contributions were made.


28

It seems like I hold only $1 because 100,000*$0.00001 = $1. No - you have the right to buy stock at $0.00001 per share. Presumably, the stock will be worth more than that, so your "profit" will be the value of the stock that you essentially get "for free". What is meant by the vesting and cliff periods? Every month you are "vested" (entitled to) an ...


19

As others have noted, you are always immediately vested in your own contributions. For employer contributions, it is not legal to be totally unvested after 4 years of full-time service. If they have cliff (all or nothing) vesting, it must vested by 3 years. If they use graded vesting, it must be at least 60% vested by 4 years. The cliff vs graded ...


17

In the early days of 401Ks (think 1980's) the vesting schedules were not as regulated - so it is possible that some company had that complex a vesting schedule. The purpose of a vesting schedule is to reward employees who stay at least until they reach 100% vesting. Here are some IRS documents discussing vesting: “Vesting” in a retirement plan means ...


14

Just because you are fired/quit/retire you don't lose access to logging into the 401(k) website. As has been said already you own 100% of your contributions, but you own someplace between 0 and 100% of the companies contributions. There are two places to look: on the website, and on any documentation you have from the company. In places where I worked ...


10

I've never heard of a vesting schedule which you describe. Your co-worker is right: it (technically, a graded schedule) starts from date of employment (which includes situations where you're eligible for matching a year after your date of employment). Of course, to be sure, read your 401(k) plan documents. That'll tell you everything you need to know.


9

You are responsible for 0 of the debt. If the partners try to force a liquidation, they are liable to damages TO YOU. The company has a value. As you said: Due to favourable cashflow with our business model, the incoming revenue covers the debt gap This means that the company in itself is valuable. This is what you own. If the partners want to ...


9

Cliff period is defined as that period until you vest any options. So if your employment is ended at 2 months 29 days, then you would have zero vested options. Waiting one more day gives you 8.33% of your options, or 8,333. Each month thereafter about 2778 options vest. Your base price is essentially zero, or just a fraction of a cent. To determine ...


7

This is called "same-day sale". If your company is publicly traded it is definitely doable through your broker. If your company is private, you'll have to ask them if it is possible, and if it is - how the process works. Re taxes, hard to tell since you didn't mention what country you're from. But generally, in all the tax jurisdictions I know of (which is ...


7

They could let you go immediately, and you would not be vested. Even though you're trying to do the right thing by giving notice, it's safer to stay silent until you're vested, then quit.


7

The last time I switched companies the old company had a vesting policy that allowed a 5 year gap in employment. If the employee returned before the 5 year deadline then they would continue along the path to full vesting. In fact a few years later they changed their policy to shorten the vesting schedule, and in my case if I return before the 5 years is up I ...


6

Any 401k plan that I've been in, the vesting schedule goes by the date you started work at that company. Like my last job said you were 20% vested after 1 year, 40% at 2 years, 60% at 3, 80% at 4, and 100% at 5. That percentage applies to ALL matching contributions. So it's not like each contribution gets an increasing vesting percentage as that contribution ...


5

I have worked with several companies, the vesting investments were handled two different ways. 1) Pre-Enron: All the matching funds were invested in Company stock. We couldn't sell those shares until we retired or closed the account when we left the company. We could also put our money into the company stock, but that wasn't advisable. Eventually they did ...


5

It's your account. Your contribs are your money. You will note that if you were given "online" (app or website) access to your 401K account, this is a completely different credential at a completely different internet domain. For instance my employer conducted business at www.example.com but my 401(k) portal was at www.etrade.com. The company instantly ...


4

If you watch episodes of shark tank, you might gain some insight into the uniqueness of deals that are dependent upon a myriad of other factors. Having to choose, the three will typically split the equity in the company equally. That is smart because if you are a 40%, 20%, or 10% owner of a failed business it really doesn't matter. Also, on the flip ...


4

Also from the page you refer to is: At newly public companies, grants made before the initial public offering (IPO) may also require a liquidity event (i.e., the IPO itself) to occur before the shares vest. Once the liquidity event has occurred, the shares vest 180 days later. So, combined with the quote you gave, unless the terms of the RSU specify ...


4

My interpretation of the IRS link you provided is that any amount of existing employer contributions must follow the least restrictive of the old and new vesting schedules, AND, any participating employee who has been an employee for at least 3 years can elect to stay on the old plan if the wish (for both existing and future contributions). Perhaps this ...


4

What financial consideration would a company have when changing from Plan A to Plan B? Employees get access to some of the RSUs sooner, but the overall vesting period increases, so it's a trade-off. The company has cash outlays sooner, but spread them out over a longer period. From an expense standpoint, the expense is recognized over the vesting period, ...


4

There are two dates that matter for vesting in this situation: Your effective start date (1/1/15 in this example) 2 years after that start date (1/1/17 in this example) If you left the company on 12/31/16, you would be entitled to none of the company contributions. If you left on 1/1/17, you would be entitled to all $20k. This is sometimes known as a cliff ...


4

Probably not. If you were at a small company and asked such a question, you'd get advice and links to erisa or other case law, etc. it's safe to say that a Fortune 500 company such as IBM is going to have their facts in order, and not going to run afoul of the rules in these cases (vesting rules and takeover of other company). I was in a company that ...


3

Unfortunately, the money that is not vested is not yours. It belongs to your employer. They have promised to give it to you after you have been with the company for a certain length of time, but if you aren't still with the company after that time, no matter what the reason, the money never becomes yours. Sorry to hear about this. It would have been nice ...


3

If the company is non-public, your hands are tied. Most startups have a Stock Option Plan with specific rules on the shares. In almost all cases, they have a Transferability clause preventing transfers of options and shares unless approved by the company (who would almost always say no). Additionally, they usually have a Right of First Refusal (ROFR), which ...


3

Recently, I asked about what the company valuation is and how many shares does my 4% represent.CFO told me that there is no point to talk about "shares" or "stock" since the company is not public. Is it right? No, it is wrong. Shares and stocks exist regardless of how they can be traded. Once a company is formed, there are stocks that belong to the ...


3

Tax wise, you simply report the income from your units like any other shareholder or LLC member it's just at some point the income will go away. And go away it will, unless you demand your units be made permanent while you remain with the LLC. Once your employment ends the LLC has no reason to make your units permanent. I wouldn't get hung up about the ...


2

It is most definitely reasonable to ask and insist. However, they may also say "no", and you must decide for yourself whether it is a deal-breaker for you.


2

On my quarterly statement and the 401K plan website I can see the vesting for various categories. A: My contribution (100% vested) B: My dividends (100% vested) C: Company Match (60% vested) D: Employer Contribution Dividends (100% vested) They total all these up and report the total balance and the vested balance. If I do the math I discover that the ...


2

Does this make sense? I'm concerned that by buying shares with post tax income, I'll have ended up being taxed twice or have increased my taxable income. ... The company will then re-reimburse me for the difference in stock price between the vesting and the purchase share price. Sure. Assuming you received a 100-share RSU for shares worth $10, and your ...


2

I'd early-exercised 75% of my grant at $5 and (later) exercised the remaining portion at $2. So did you actually pay the money and got "X" unvested shares? I'll be leaving the company; and they'll be unwinding half of the grant, so I'll get some money back, but now the question is: Do they pay me back from the $5 shares or the $2 shares? This would ...


2

First of all, these are pretty much options in name only: unless the company goes bankrupt (in which case, "options" and "shares" would be equally worthless), the price per share is going to more than $0.00001. The vesting period is how long until you can actually use the options. You have a 36-month vesting period, so every month, you'll earn slightly less ...


2

This varies by company. You'd have to look at the fine print of the vesting agreement. If it's not spelled out there, I'd ask someone in HR or at a level to commit an answer in writing.


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