Do terminated employees have three months to exercise their options?

September 10, 2001

Subject:   Section 422
Date:   Tue, 28 Aug 2001
From:   Peter


Does Section 422 of the IRC require that terminated employees have 3 months to exercise their vested options? Can a company Option Plan require a terminated employee to exercise their options in less than 90 days and still have the option plan comply with section 422?



Date:   Fri, 7 Sep 2001

Hello Peter,

Section 422 does not state that the option has to continue in effect three months after termination to qualify as an ISO. That is the maximum allowed.

Good luck!

Mike Gray

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