stock-options, employee-compensation, exitWhat is the standard practise if the company is partially sold (e.g. 51%)?
If employees receive a share of the company, is it common practice to reduce the value paid out when not a 100% is bought at the end?
In this regard employee shares usually follow the founder shares: If 51% of the founder shares are sold, the employees will be forced to also sell 51% of their shares. This is how it is usually done: If the employee got 100 shares for his great work, he will have to sell 51 of them at the valuation of the partial exit. So if the investor pays the founders $ 1000 per share, the employee will get $ 51000 and he will keep 49 shares. This is something you should definitely put into your shareholders agreement.
I recommend to use phantom shares for emloyees because of their advantages: no tax for the employee, no voting right (less admin. issues) and questions like this can be clarified in the phantom share agreement.
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