As an employee, you definitely wanted to be at the company when it was purchased since 48 million was earmarked for the soon to be google employees.

It sucks if you're someone who had left the company recently (especially if you paid money to secure your options)... there is something rather backhanded about this kind of dealing. Arrington alluded to it during YC's angel conf, but from an investor's perspective. In this case it can affect employees as well.

I suppose this is the nature of private companies. The controlling parties can really do whatever they want, including diluting you out of the picture or (in this case) laundering value into employee retention plans.