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Subject:   Stock Option rights question
Date:   Fri, 15 Sep 2006
From:   Henry

Hello Mr. Gray,

I recently terminated employment from a company where I worked for more than five years. I received stock options which are fully vested. The stock is not publicly traded.

Can I sell the stock back to the company or to another employee?

The options will lapse mid-October.

Any info would be greatly appreciated.

Sincerely, Henry

Answer

Date:   Thu, 05 Oct 2006

Hello Henry,

Since the stock isn't publicly traded, your only choices are to sell the shares to the company or in a private sale, probably to an employee.

You can't "force" such a transaction.

Many people find they can't sell the stock and have to let the options lapse.

If you find a buyer other than the company, you will need legal help to set up the transaction. You will also need to know how the company will report the transaction to determine the tax consequences.

Good luck!

Mike Gray

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

For more information about non-qualified stock options, request our free report, Non-Qualified 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.