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Date:   Thu, 02 Feb 2006
From:   Mike

Hi,

I left a privately-held corporation where I had almost 5,000 vested options that expired 3 months after the end of my employment. Almost exactly 3 months after I left, the company announced that it was being purchased by a larger company of about $1 per share more than my option price. Employees with vested options were bought out at a price about $2 higher than my option price.

I have asked three times what the date of the sale was, and received no response. If the sale was before my expiration date, I'm guessing I would be entitled to the price of my options at that time.

Is the date of sale supposed to be public information? Where can I find it? If the sale was before my expiration date, do I have a legal basis for a claim, and would it be worth the cost?

Thank you for any help you can provide,
Mike

Answer

Date:   Wed, 08 Feb 2006

Hello Mike,

First, I don't have enough information to answer your question about whether it would be worth the cost of filing a lawsuit, because I don't know how much you might be entitled to.

Private companies aren't subject to many public information requirements. You might try hiring a private investigator to find out the date of sale.

This is a legal matter that I'm not qualified to respond to, so I suggest that you consult with an attorney who understands stock options.

Good luck!

Mike Gray

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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.