The Company shall have the option (but not the obligation) to purchase such Common Shares. Such offer will be irrevocable until the day that is 120 days from the Termination Date. Where, in the case of an Employee Participant, Executive Participant or a Consultant Participant, an Optionee’s employment, term of office or consultant agreement is terminated for any reason, such Optionee shall immediately offer to sell to the Company all of the Common Shares owned by the Optionee which have been or may be issued to the Optionee upon the exercise of Options at a price equal to the Exercise Price of such Common Shares. Here’s the relevant clause – it says much the same as the Skype documents but in slightly more understandable language: 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.