Exercise Expiration Periods
When an option holder terminates his or her service with a company, they are given a period of time to exercise their options (an "exercise period") before the allocated shares return to the option pool.
The termination definitions below vary from plan to plan. If you are an option holder, refer to your plan documents for the termination definitions that apply to you. Not all plans specify every termination type below.
In a voluntary termination, an employee resigns from his or her job. Resignations occur for a variety of reasons that include: a new job, a spouse's acceptance of a new job in a distant location, or returning to school.
In an involuntary termination, an employer fires the employee or removes the employee from his or her job. An involuntary termination is usually the result of an employer's dissatisfaction with an employee or an economic downturn.
Termination with cause
Termination with cause can occur in such situations as: violation of the company code of conduct or ethics policy, failure to follow company policy, violence or threatened violence, extreme insubordination, or harassment. The reason for termination is typically stated in the termination letter.
Following the death of an option holder, the option holder's beneficiary or estate will be granted a period of time to exercise the option grant.
When an option holder's service status is terminated due to disability (as defined by the Plan), he or she is granted a period of time to exercise his or her options.
When an option holder retires, he or she is granted a period of time to exercise his or her options.