The big Skype-Microsoft deal is exposing some pretty snarky behavior of the folks who engineered the sale of the telephony outfit to the software giant of the past.

Some of the execs who’ve left Skype also left behind the right to exercise the stock options they were vested with when they worked for the company.

Former Skype product manager Yee Lee found this out the hard way. His blog posting about his experience as a former exec at the company makes interesting reading.

Bottom line: Private equity deals don’t operate like other kinds of merger and acquisition operations. Reading the fine print — where you could find out that the stock options you thought were vested by your employment can vanish when you leave the company — is crucial.

Lee learned this lesson and is trying to pass along the knowledge to others. To quote his essay on the topic:

“The most important lesson I learned from Skype was that compensation and stock policies in PE-owned firms can be very heavily tilted in the owners’ favor and against the employees.  Skype employees have 5-year vesting of stock options, for example, not the usual 4-year schedule that most Valley firms have.  Even worse, Skype’s stock option agreement had special clauses that the Board had slipped in that gives them the right to “repurchase” any vested shares for anyone who leaves the company voluntarily or is terminated with cause — effectively taking “vested” shares and making them worthless.”

Nice, eh? Well, nice for the company. Not so nice for the former employee.

His warning to other high tech start-up workers: Lawyer up from the start. Make sure a good attorney reads any documents before you sign them.

Tags: Microsoft, private equity, Skype, stock options, Yee Lee