What is Post-Termination Exercise Period (PTEP)?
The limited window after you leave a job to exercise your vested options - miss it and they are gone.
Post-Termination Exercise Period (PTEP): definition
Vested options are not automatically kept forever when you leave - the plan sets a window to exercise them, historically 90 days. Miss it and the vested options expire, forfeited back to the pool. The 90-day period is often a hardship because exercising can cost significant money and, for ISOs, trigger tax. Some companies now offer extended windows (years instead of days) to be more employee-friendly, though extending beyond 90 days converts ISOs to NSOs for tax purposes.
- A deadline after leaving to exercise vested options - often 90 days
- Unexercised vested options are forfeited when the window closes
- Exercising can require real cash and, for ISOs, may trigger AMT
- Extended windows are more employee-friendly but change ISO tax status
How Fintra handles it
Fintra equity management records each grant post-termination exercise window and, when someone leaves, tracks the deadline so vested options are not silently forfeited for lack of a reminder. The cap table reflects exercises and expirations accurately, with any change reviewed by a named human - while the personal exercise-and-tax decision stays with the individual and their advisor.
- Exercise window recorded per grant and tracked on departure
- Deadlines surfaced so vested options are not forfeited unknowingly
- Exercises and expirations reflected accurately on the cap table
Worked example
Frequently asked questions
How long is the post-termination exercise period?
Traditionally 90 days after leaving, though it varies by plan and grant. Some companies now offer extended windows of several years to be more employee-friendly. The exact period is set in the option agreement, so departing employees should check it carefully.
What happens if you miss the exercise window?
Vested options you do not exercise within the window are forfeited - they return to the option pool and you lose them, even though they were vested. This is why tracking the deadline after leaving is important, and why Fintra surfaces it rather than letting it lapse silently.
Why is the 90-day window a problem for employees?
Because exercising often requires paying a meaningful amount of cash for the shares and, for incentive stock options, can trigger alternative minimum tax - all within 90 days of losing a paycheck. Many employees cannot afford to exercise in time, forfeiting valuable options.
How does an extended exercise window affect ISOs?
Extending the exercise period beyond 90 days after termination causes incentive stock options (ISOs) to lose their ISO tax status and be treated as non-qualified stock options (NSOs). Companies offering long windows accept this trade-off; employees should understand the tax impact.
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