Exercising the option

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The act of buying or selling the underlying asset via the option contract.

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422(a)(2) states that the employee must have been an employee beginning on the date that the option was granted and up to three months prior to exercising the option.

Sec. 409A and stock options: a cause for concern? by Wood, Susan / The Tax Adviser

We are pleased the Navy has shown its confidence in our ability to perform this requirement by exercising the option for message system support in Guam," commented Al Lane, President of RRC.

PAR Technology subsidiary awarded additional contract by U.S Navy; ... by EDP Weekly's IT Monitor

Citigroup and some other companies allow an executive to turn in shares to satisfy the cost of exercising the option and paying the tax bill.

Monstrous Pay by CRYSTAL, GRAEF / Los Angeles Business Journal

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