Legal Question in Business Law in Oregon

Employee Buyout of Business

I am in the position of purchasing, via stock option, the company I am presently working for. However, this transaction may take place over the course of several years. In the meantime, my name and reputation are adding significant value to the company. How can I make sure during our contractual negotiation for my eventual purchase, that the hard work and increased profitability of the company that is directly associated with me, does not in the end make the company more expensive for me to purchase.


Asked on 12/29/01, 2:32 am

1 Answer from Attorneys
Michael Zusman Evans & Zusman, P.C.

Re: Employee Buyout of Business

Your inquiry raises many questions. The short answer is that you need to attempt to negotiate a deal up front which takes into account the future value you bring to the company. Not sure how that can be quantified. How about having a current valuation done so there is a baseline value to work with? Also, employer could take the position that so long as you are just an employee, you are not entitled to any of the value you bring until you actually buy the company. Of course, what is to stop you from starting a competing company? Do you have a non-compete? Another question: why a "stock option"? Why not a straight purchase with payment (and rights granted) over time? There is insufficient space to go into all the potential issues here. You can always give me a call if you want to set up an appointment. Best of luck in any event.

Read more
Answered on 12/31/01, 12:39 pm


Related Questions & Answers

More Business Law questions and answers in Oregon