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I rewrite the contract so that all options that have been granted but not vested, vest on termination. I was bite by this one and learned my lesson, I have also

by kls 15y ago

I rewrite the contract so that all options that have been granted but not vested, vest on termination. I was bite by this one and learned my lesson, I have also been bit by dilution, you pick these things up along the way. If they do not agree to vest on termination then we go back to salary negotiation or I walk. To me if they can terminate you and snatch back millions, it's just to big of a carrot to do so, as well that's all it is, is just a carrot if they can at any time deprive you of it. So basicly I write it to secure what a good company wants, A pair of handcuffs chaining me to a position, but I ensure that once I have completed my time, they can't deprive me of that rightfully earned compensation, I do this by adding a clause that all awards vest on termination, nothing complex not a bunch of legalize just all options vest and the clause overrides any and all other verbiage related to the matter in any other section of the contract.

prostoalex 15y ago
Are you in executive/board/founder position? Once again, curious to hear the name of the companies. I glanced at this http://www.linkedin.com/in/kentonsmeltzer http://www.linkedin.com/in/kentonsmeltzer from your HN profile, and didn't find any Silicon Valley names, but I'm assuming you might not disclose everything there.
- kls 15y ago
  I own my own freelancing company now doing JS web apps and mobile, I am based in the Orlando Florida area, but I am part of a Vally start-up as the CTO. Sorry I have to be vague on that topic right now. That being said, I was an executive at Marriott and was in line for the CTO position before I left, I did rewire the options contract with Marriott and went through several iterations with Legal. I also built 3 start-ups from the ground up, one exited to Hotels.com, another to TUI travel and the other to EAS nutrition. I would prefer not to say which I got screwed on but one of those exits I was left with nothing but a cold hard lesson in business, ownership and options.
  - prostoalex 15y ago
    Got it. Yeah, someone with CTO title might bend the rules a little. Otherwise stock and option plans are generally approved by the board. Asking a company to redraw the contact essentially makes it a CEO's call to reconvene the board as it goes outside of standard grant plan - not something that they'd do for a staff employee.
    - kls 15y ago
      I have done it on small contracts as well, granted we are talking about a sizable start-up in this thread, but never the less many first employees are in a position to renegotiate the options; most start-ups are much smaller at the time these contracts are written, even the company we are talking about in this thread was probably much smaller when most of these "big award to get them in the door" contracts where written. Many of those contracts may have been written when their where less than 20 people at the company. In those situations, contracts are very much negotiable. The second start-up I did I walked into a functional and profitable but small company, and I negotiated my options give the experience I had before. I was not at that time negotiating from the perspective of being the CTO but first technical employee.
      - blrgeek 15y ago
        Please please do a detailed post on this, either on HN or elsewhere. Engineers who join in early NEED to know this.
    - danssig 15y ago
      I do this on normal contracts. Just mark out the parts you don't agree with, add things you want in there, initial all your changes, sign and date it. Sometimes it will go through without anyone noticing (so make sure you have a photocopy).
feralchimp 15y ago
"If they do not agree to vest on termination then we go back to salary negotiation or I walk." So true. Expensive lesson for these folks.
- danssig 15y ago
  Sometimes I pine for the good ol' days where this kind of unethical behavior would be met with a good old fashioned ass kicking.
  - feralchimp 15y ago
    It's only the olden days until someone goes ahead and takes a swing. I had the exact same thought about the "fraudster holding the Occupy Boston d/b/a certificate hostage" story. Especially in that kind of ground-up, loosely-couples collective action scenario, how does overt bad acting not result in a Code Red at the food tent?

by kls 15y ago

prostoalex 15y ago

Are you in executive/board/founder position? Once again, curious to hear the name of the companies. I glanced at this http://www.linkedin.com/in/kentonsmeltzer http://www.linkedin.com/in/kentonsmeltzer from your HN profile, and didn't find any Silicon Valley names, but I'm assuming you might not disclose everything there.

kls 15y ago
I own my own freelancing company now doing JS web apps and mobile, I am based in the Orlando Florida area, but I am part of a Vally start-up as the CTO. Sorry I have to be vague on that topic right now. That being said, I was an executive at Marriott and was in line for the CTO position before I left, I did rewire the options contract with Marriott and went through several iterations with Legal. I also built 3 start-ups from the ground up, one exited to Hotels.com, another to TUI travel and the other to EAS nutrition. I would prefer not to say which I got screwed on but one of those exits I was left with nothing but a cold hard lesson in business, ownership and options.
- prostoalex 15y ago
  Got it. Yeah, someone with CTO title might bend the rules a little. Otherwise stock and option plans are generally approved by the board. Asking a company to redraw the contact essentially makes it a CEO's call to reconvene the board as it goes outside of standard grant plan - not something that they'd do for a staff employee.
  - kls 15y ago
    I have done it on small contracts as well, granted we are talking about a sizable start-up in this thread, but never the less many first employees are in a position to renegotiate the options; most start-ups are much smaller at the time these contracts are written, even the company we are talking about in this thread was probably much smaller when most of these "big award to get them in the door" contracts where written. Many of those contracts may have been written when their where less than 20 people at the company. In those situations, contracts are very much negotiable. The second start-up I did I walked into a functional and profitable but small company, and I negotiated my options give the experience I had before. I was not at that time negotiating from the perspective of being the CTO but first technical employee.
    - blrgeek 15y ago
      Please please do a detailed post on this, either on HN or elsewhere. Engineers who join in early NEED to know this.
  - danssig 15y ago
    I do this on normal contracts. Just mark out the parts you don't agree with, add things you want in there, initial all your changes, sign and date it. Sometimes it will go through without anyone noticing (so make sure you have a photocopy).

feralchimp 15y ago

"If they do not agree to vest on termination then we go back to salary negotiation or I walk." So true. Expensive lesson for these folks.

danssig 15y ago
Sometimes I pine for the good ol' days where this kind of unethical behavior would be met with a good old fashioned ass kicking.
- feralchimp 15y ago
  It's only the olden days until someone goes ahead and takes a swing. I had the exact same thought about the "fraudster holding the Occupy Boston d/b/a certificate hostage" story. Especially in that kind of ground-up, loosely-couples collective action scenario, how does overt bad acting not result in a Code Red at the food tent?