All stock options have a stated exercise period, which is the period of time within which the option must be exercised. If the option is not exercised within this period, the option expires. In most option plans for employees, an employee's option exercise period can be cut short if employment terminates. In some cases, option plans provide that all options just automatically expire when the employee terminates employment. The normal way for an employee to actually exercise his or her option after it becomes vested is to pay the exercise price to the employer by check.
Some plans allow employees to pay the exercise price in forms other than cash.
For example, companies can loan the exercise amount to the employee or the employee may be permitted to pay the exercise price by delivering previously-acquired shares of employer stock. In many ways, the option programs of privately-held companies are the same as those of public companies. The obvious difference is that when an employee of a private company exercises an option and buys the stock, he or she does not have a ready market for the stock. Some private companies will agree to buy the stock from the employee, particularly if the employee is terminating employment. We don't guarantee that it's current, useful, or even vaguely accurate.