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Early retirement may be treated less favorably. A 2007 survey by the National Association of Stock Plan Professionals (www.naspp.com) found that more companies accelerate unvested options for normal retirement than for early retirement (19% compared with 8%).
The post-termination exercise periods also vary among companies, according to the NASPP survey. For early retirement, 44% of companies give three months, while 16% let you exercise the option for the remainder of its term. For normal retirement, 33% provide three months, and 23% of companies allow exercise during the remainder of the option term. Alert: Review your stock plan documents for their definitions of early retirement, retirement, and similar terms. Do not assume that the definitions of such terms will be identical across all of your company benefit plans (e.g., health, 401(k), pension, etc.). For example, do not assume that just because you can elect to receive your pension benefits early that you are also, at the same age, eligible for retirement provisions in your stock options. In addition, understand what impact working as an employee or a consultant for a competitor during retirement would have on your outstanding stock options. |
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