Employee Share Options Scheme - Buyback/Termination/Expiry

[superbrudd]

This is an interesting little question for anyone interested in Employee Share Options Schemes etc.
I have share options with a former employer who is discussing buying back the options from me at the moment. The weird thing is, the whole options plan expires in a few months, so I’m trying to work out what possible benefit there is for my former employer in buying back the options now.
So a few more specific questions are:
• Generally, what happens to options when an options plan expires? Do they get reabsorbed into the company? (ie if there are 1,000,000 shares, 100,000 of which are allocated to the share options scheme, does the company just go back to being 900,000 shares?
• When the plan expires, do my options simply expire from my perspective? (I know it may be hard to answer this without looking at all the documentation, but I’m interested in what normally happens)
• If the share options expire so soon, why would my former employer be trying to buy them off of me? What possible benefit might they gain from buying them rather than waiting for the plan to expire? Might there be a reason that they want to get rid of the plans and other options holders urgently? eg if there is someone trying to buy the company? Or another thought, maybe they might be thinking of extending the expiry date of the scheme and offering the options to someone else instead, so they would like them back? If that’s the case, why would they not let the scheme expire and start a new one?
I know these questions probably do not have definitive answers, but I would love someone else's input on this.

Thanks!

 

[skyQuake]

Re: Employee Share Options Scheme - Buyback / Termination / Expiry

This is an interesting little question for anyone interested in Employee Share Options Schemes etc.
I have share options with a former employer who is discussing buying back the options from me at the moment. The weird thing is, the whole options plan expires in a few months, so I’m trying to work out what possible benefit there is for my former employer in buying back the options now.
So a few more specific questions are:
• Generally, what happens to options when an options plan expires? Do they get reabsorbed into the company? (ie if there are 1,000,000 shares, 100,000 of which are allocated to the share options scheme, does the company just go back to being 900,000 shares?

The options themselves are unaffected - they remain (with u) till exercised or they expire. The employee option scheme merely ends ie - you will not be able to get options with/instead of income.

• When the plan expires, do my options simply expire from my perspective? (I know it may be hard to answer this without looking at all the documentation, but I’m interested in what normally happens)
• If the share options expire so soon, why would my former employer be trying to buy them off of me? What possible benefit might they gain from buying them rather than waiting for the plan to expire? Might there be a reason that they want to get rid of the plans and other options holders urgently? eg if there is someone trying to buy the company? Or another thought, maybe they might be thinking of extending the expiry date of the scheme and offering the options to someone else instead, so they would like them back? If that’s the case, why would they not let the scheme expire and start a new one?

The employer may simply be trying to get rid of loose ends. Check the expiry and exercise price of your options against the stock price, versus how much they're willing to pay to buy the options off you.

Would help a bit if you'd post the options code (even if its unlisted) and the share code too.

Cheers

 

[superbrudd]

Thanks for your reply.

I think I get what you mean - so although the 'scheme' ends, my options do not. However I'm very new to this stuff so some of my terminology may not be correct. In addition to the whole share options scheme terminating on a date later this year, there is also a date (before the termination date) specified after which some of my options lapse (I was granted two lots of options separately). Again, I presume this means that I don't have them anymore and can never exercise them? There is also a 'last exercise date' on some of my options... after which, I guess again, I don't have them any more?

This is a private company, so I'm not sure if the company / options code help? I have the participation reference number - but I'm not sure if it's ok to post that sort of information on a public forum like this?

Any ideas where I can get really good advice on this stuff - ie putting all the paperwork in front of someone? I'm located in Brisbane, but am happy to do it by email / phone.

Thanks again.