What are the different types of PTE periods?
When an optionholder terminates his or her service with a company, they are given a finite period of time to decided whether or not to exercise any vested options (a post-termination exercise period, or PTEP) before the allocated shares return to the pool.
This interval varies depending on the termination type, and termination definitions vary from plan to plan. For a generalized list, check out the table below. Not all plans specify each listed type.
If you're an optionholder, refer to your plan documents for the termination definitions that apply to you.
Voluntary termination | In a voluntary termination, an employee resigns from his or her job. Resignations occur for a variety of reasons that include:
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Involuntary termination | 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:
The reason for termination is typically stated in the termination letter. |
Death | 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. |
Disability | 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. |
Retirement | When an option holder retires, he or she is granted a period of time to exercise his or her options. |