You'll also probably face restrictions on the stock, placed by the company to
encourage you to stay. For example, they may claim the right to repurchase the stock at
the exercise price if you leave before a certain time has elapsed.
Negotiation point: It's advantageous to have an early exercise term. Center
your negotiations on why you're worth an early exercise term and how that will be an
incentive to work toward increasing the stock's value.
"Executives should use the same strategies they would use to negotiate more
compensation up-front, pointing out that early exercise is also beneficial to the
company because you're not asking them to come up with the cash," Mayfield says.
Stock options are an innovative and perhaps, but not always, lucrative way to make
that new career change worth your while. They are also extraordinarily complex,
however, and should be handled with care to make sure you end up on top. Before you
make the leap, it's advisable to run the agreement by your attorney or accountant,
Mayfield says. Better to find out now if the best option is actually no option at all.
