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Subject:   Expired Stock Options
Date:   Thu, 2 Sep 2004
From:   Janet

Hello,

When I left my company, I got a letter saying I had three months after my termination date to exercise my options. I terminated 4/30/04. That meant my options were good until 7/31/04. I put in an order to exercise my options on Friday, 7/30 at 6pm. My options canceled the next day.

Should my company reinstate my options because I tried to exercise within the three month period? Don't companies give until the next business day if the three-month date falls on a weekend?

Thank you.

Answer

Date:   Fri, 10 Sep 2004

Hello Janet,

There is no requirement that the employer give a grace period when you exercise your options. For incentive stock options, the Internal Revenue Code provides that, in order to qualify as an incentive stock option, the person must have been an employee on the date three months before the date of such exercise. There is no grace period stated in the code.

I'm afraid you're out of luck. I think there's also a reasonable person requirement that you should file during normal business hours, and 6pm is after business hours. So, next time, don't wait until the last minute.

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.