Employee share options - do employees have rights under a private buy-out of the company?

Question

I have been paying into my share option account for about 6 months. The contract allows contributions for 5 years, when the option should be taken. The company I work for is under a bid from a private consortium. Will I still have an option to buy shares in 2011? Am I entitled to any compensation if this part of my benefits package is no longer available?

Answer 1

If the Company is taken private it's shares will be de-listed and (in 2011) there will be no share price to base calculations on - so if the take-over is successful the share-option scheme will have to be discontinued 'now'.
But the 5 years bit relates to Inland Revenue rules re: Tax.

I'm sure you will be compensated in some way ... at the very least you will get you contributions back & (I would suggest) payout based on the share price rise over the last 6 months.

I'm sure take-over situations have been considered by the IR & you can't be the only one concerned...

You need to speak to you HR department and get them to find out what the 'deal' will be and what the IR ruling will be.