![]() I dug up the clause from that agreement, which I kept because it was so audacious. I actually worked for a company once that used the same mechanism. ![]() This isn’t the first time I’ve seen a stock option plan like this. If, in connection with the termination of a Participant’s Employment, the Ordinary Shares issued to such Participant pursuant to the exercise of the Option or issuable to such Participant pursuant to any portion of the Option that is then vested are to be repurchased, the Participant shall be required to exercise his or her vested Option and any Ordinary Shares issued in connection with such exercise shall be subject to the repurchase and other provisions in the Management Partnership agreement.Īnd here’s the letter the employee received when he was terminated:ĬNN calls the language “intentionally incomprehensible.” Reuters agrees, adding that Skype is “evil.” Here’s What’s Going On It refers to a Management Partnership agreement which isn’t public and it’s unclear if employees ever get to see it (my guess is not): Here’s the relevant language in the stock option grant agreement. And any vested options that you’ve exercised (meaning you paid cash for them) that were turned into actual shares could simply be bought back by the company at the price you paid, regardless of their current value. With Skype stock options the company has the right to not only terminate unvested options, but also vested ones. At least that’s the way things have been done over the decades. If options are vested you can exercise them, pay for the stock and own that stock. The vast majority of stock options granted to startups have a vesting period, typically four years, with chunks of those options becoming vested during that four year (or whatever) period. Skype’s response boils down to saying that the employees were fired because they weren’t good employees, and that the value of the stock is negligible and didn’t affect the decision making process.Įmployees aren’t even able to keep the vested portion of their stock options. ![]() Skype is being criticized for terminating employees immediately prior to the closing of the Microsoft acquisition, and people are assuming they’re doing this to keep the value of those employees stock options.
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