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Date:   Mon, 19 Dec 2005
From:   Denny

Mike,

I was granted stock options upon joining my current company. One year later they are changing my position within the company. The CEO is now telling me they have to lower the amount of options provided to me when I joined. Can they do this? I see nothing in my option paperwork that says they can lower the amount at will.

DR

Answer

Date:   Mon, 09 Jan 2006

Hello Denny,

An option grant is a contract that can't be easily changed without the consent of both parties. There may be some additional information in your situation that you haven't told me, so I suggest that you get a lawyer and ask for a better explanation for this adjustment.

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.