Some companies also have fine print in their equity agreement that employee equity holders must get the board's approval for any sales of the company's equity prior to the stock being listed on a public exchange. Employees / former employees are thereby locked into being equity owners until the company in question goes public or is acquired.
If you leave the company, you have to exercise the options (typically within 30-60 days), and pay not only the strike price but the AMT on the difference between the strike price and the latest per-share valuation (i.e., the paper value of the options). So if you have options at a strike price of $50k that are now worth $5mm, you're in for well over $1mm of taxes payable -- now -- in cash.
My understanding is that this practice is legally dubious and has been challenged, but IANAL.
If you leave the company, you have to exercise the options (typically within 30-60 days), and pay not only the strike price but the AMT on the difference between the strike price and the latest per-share valuation (i.e., the paper value of the options). So if you have options at a strike price of $50k that are now worth $5mm, you're in for well over $1mm of taxes payable -- now -- in cash.
My understanding is that this practice is legally dubious and has been challenged, but IANAL.