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Subject:   Stock Options
Date:   Thu, 30 Aug 2001
From:   Anonymous

My company was sold last fall, and I had a number of options. Before departure, my former company let us meet with a CPA to understand our rights with regards to our options. All became exercisable upon termination, but I am unclear as to what period of time I have to exercise. My plan has language of 3 months, but I, and other former employees recall the CPA mentioning up to one year, although only the first 3 month would be ISOs, and exercising in the last 9 months would non qualified. I attempted to exercise recently (now 9 month since separation), and was told sorry, had to do it in the first 3 months.

Do I still have some rights of exercise under some IRS or other rules, or is my plan the final say? Thanks

Answer

Date:   Fri, 7 Sep 2001

You should consult with an attorney to study the plan and the information your company gave you.

Although options no longer qualify as ISOs after three months, sometimes they are converted to NQOs when that time expires.

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.