From a company's point of view, wouldn't that really suck, having all of these outstanding shares in limbo? I'd imagine at least part of the 90-day thing is just so that the company knows the status of those shares. For an employee, the company is holding those out as a carrot for you: someday those shares might pay off, if you work hard. For a former employee, he/she gets 90 days to decide whether to pony up the cash for the company (who gets money in exchange for the shares), or they get the stock back to give to other employees.
Having to keep track of "large" (unsure of how to quantify that) percentages of the company that might be purchased at a later date seems like a liability that the company wouldn't want to have to track, especially as a startup with other things to focus on. They're useless to the company, the only upside is for the employee.
Is it really more difficult to keep track of than regular shares? It's easy to decide if the stock might be purchased: if the IPO/acquisition is priced above strike price, then they obviously will be bought, and otherwise will not.
It is indeed not useful to the company, and a great upside for the employee. Out of all suggestions in the article, this is probably the most employee-friendly. But that's not a bad thing if it helps recruit good employees, or otherwise seems like a fair thing to do.
The usual 90-day limit makes employee vesting almost meaningless. They either wait for an acquisition (and get all their options accelerated), or leave before that (and lose all of them). Few employees have enough spare cash to buy out their shares.
that's not the only option. The company could remain privately owned - in which case you want to have below 100 shareholders so that you can remain a C corp
Having to keep track of "large" (unsure of how to quantify that) percentages of the company that might be purchased at a later date seems like a liability that the company wouldn't want to have to track, especially as a startup with other things to focus on. They're useless to the company, the only upside is for the employee.