full answer thread can be found here: http://www.quora.com/Employee-
Dan’s Answer
As long as your stock options remain outstanding (usually a product of you staying employed) then you will have an opportunity to exercise your options at the $2 price.
The timing of when you can exercise is generally controlled by several factors.
1) The vesting schedule. Generally, fully vested stock options can be exercised by their holder. Once the company is publicly traded (and as long as you are not in the post-IPO lock up, you should also be able to sell these shares at the current market price, whatever that is (hopefully for you your company skyrockets to far higher than $20)
2) Exercise Prior to vest/Early Exercise provisions. Some plans allow individuals to exercise unvested stock options. In this case you would be able to exercise (buy) your shares at the $2 price, but you would not be able to sell them until they are vested. This may or may not provide a tax advantage for you.
3) Blackout periods. Once you are at a publicly traded company you may be subject to interim periods where you are not allowed to do transactions. These are usually called “blackouts”. The company will usually announce or even schedule these long in advance and you will not be able to exercise or sell during these times. (I put together an easy to use reference on insider trading. Insider Trading Pyramid 2011 – 10b5-1, Section 16, Rule 144 and more
So, CONGRATULATIONS. I often do pre-IPO/post-IPO education sessions on equity compensation at companies. Please feel free to let your company know they can reach out to me. I am very passionate about the fact that stock options and similar compensation has far higher value when people understand it.
Good luck