Post-Termination Exercise Period (PTEP)
The time after leaving a company during which you can still exercise vested options (often 90 days).
Definition
The PTEP is the window of time after you leave a company in which you must exercise your vested stock options or lose them. The default is 90 days for most companies. Some employee-friendly companies extend this to 1, 5, or even 10 years. Note that ISOs exercised more than 90 days after termination automatically convert to NSOs, losing their favorable tax treatment.
Why it matters
This is one of the most important terms in your option agreement. A short PTEP can force you to spend tens or hundreds of thousands of dollars to exercise, or forfeit your equity entirely. Always check the PTEP before accepting an offer.
Example
You leave with 50,000 vested options at a $3 strike. With a 90-day PTEP, you need $150,000 within 3 months. With a 10-year PTEP, you can wait until the company IPOs and do a same-day sale, paying nothing out of pocket.