It’s important to know what happens to your employee stock options upon terminating your relationship with your employer. The answer to what happens can get complicated. Depending on why your employment status changes from employee to a former employee and what type(s) of employee stock option(s) you have, the rules surrounding what you can and can’t do with your equity compensation will vary.
Often, we’ll see a 90 day post-termination exercise window on employee stock options. This means that your options will need to be exercised within this time or they will be forfeited. You’ll want to keep in mind, however, that if the expiration date of the option preceeds the 90 day post-termination window, that will be the date you’ll need to exercise by in order to capture the benefit.
90 days is not always the case, and the best strategy is to check your plan document for the specific rules regarding your plan. But in the meantime, here is a primer of things to know now. Learn more