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Extending equity exercise window

Hi, we’re thinking about extending our stock option exercise period to beyond 90 days for employees who have reached a certain tenure (4 years maybe). I’ve heard of companies doing this broad based and up to 10 years, like Pinterest.

Can anyone share if you do anything like this? If so, is it broad based for the whole company or just for employees of a certain tenure? If so, how long do you extend the option exercise window to?

Hi Allie - Are you a thinking about this for a public or private company? Also - I assume you are referring to employees who have left (i.e. they normally have 90 days to exercise options after leaving then the options expire). Is that correct?

Hi, for a private company and yes, this would be for when employees leave. Right now we have a 90 day exercise window and we’re thinking about extending it.

I could write pages however (given I have two young kids to put to bed) I’ll keep my response brief. I would definitely look at extending the options exercise period mainly if you are a private company.

Considering your staff, shares are not liquid (for private companies) so, as an employee, you are forced to exercise when leaving and it can be financially difficult (you will pay the exercise price and receives shares that cannot be sold). By allowing a longer exercise period you provide more flexibility for employees who wish to be alumni investing for the longer term.

From the companies point of view alumni can still be very valuable even when they leave. They will talk with future employees and customers and give a view of your business. If they are holding options they will generally talk a lot more positively.

So all in all I’d say extending makes a lot of sense. Good luck!!