I worked for a startup and as an employee, was “granted” 34,000 “Options” and “vested” in 8,000 “Options (ISO)”. The company has not gone public yet but likely will in the next 3-5 years. I just left the company and the exit paperwork says “Upon termination, you have three months to exercise your Options before they expire.” I have no idea what this means. What happens if I exercise them? What happens if I don’t? What does it even mean to exercise them? Please help.
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An option is a contract. You make an agreement with someone for…wait for…the “option” to buy or sell a stock at a given price. But generally you are also not *required* to. To exercise a stock option simply means you’re going through with the agreement. An alternative is just to let the option expire which means you’re not going through with it by the expiration date.
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