Change in Employment Status

Upon an employee's termination, the individual typically ceases participating in the ESPP and payroll deductions for that individual in the applicable offering period are refunded. However, if the termination occurs just before the purchase date, some ESPPs provide that the accumulated payroll deductions will be used to purchase shares.

Some ESPPs permit employees who experience certain types of terminations (such as death, disability or retirement) to purchase shares at the end of the offering period in effect when the termination occurs. 
Any plan provision must comply Section 423 of the Internal Revenue Code, which requires participants to be continuously employed through the date that is three months before the purchase date.