conversion to Employee Stock Ownership Plan (ESOP)

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ieee488
Posts: 1943
Joined: Thu Dec 10, 2009 8:57 am

conversion to Employee Stock Ownership Plan (ESOP)

Postby ieee488 » Tue Jul 16, 2013 10:06 am

One of the options available in my employers 401K is the company's stock fund.
I received a letter yesterday stating that the xxxx Stock Fund will be converted to an Employee Stock Ownership Plan (ESOP).

In one of the letters, there is a sentence "Converting the xxxx Stock Fund to an ESOP will provide for full vesting of any future dividends paid to the xxx Stock Fund, including dividends related to unvested COmpany contributions, without regard to whether you are vested in the shares to which the dividends are related".
This seems to be a good(?) thing.

Why would the employer be doing this?
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inbox788
Posts: 1571
Joined: Thu Mar 15, 2012 5:24 pm

Re: conversion to Employee Stock Ownership Plan (ESOP)

Postby inbox788 » Tue Jul 16, 2013 7:38 pm

ieee488 wrote:One of the options available in my employers 401K is the company's stock fund.
I received a letter yesterday stating that the xxxx Stock Fund will be converted to an Employee Stock Ownership Plan (ESOP).

In one of the letters, there is a sentence "Converting the xxxx Stock Fund to an ESOP will provide for full vesting of any future dividends paid to the xxx Stock Fund, including dividends related to unvested COmpany contributions, without regard to whether you are vested in the shares to which the dividends are related".
This seems to be a good(?) thing.

Why would the employer be doing this?


The company is about to go bankrupt?


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