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Subject:   NQSO Question
Date:   Tue, 20 Jan 2004
From:   Bernard

Michael Gray,

My wife owns an NQSO for 7000 shares of a public company that are not yet vested. If that company is acquired by a private company, what happens to the non-vested shares in that NQSO?

Thank you for answering our question

Bernard

Answer

Date:   Mon, 02 Feb 2004

Hello Bernard,

In most cases they will be replaced with equivalent options for shares of the acquiring company. Of course, she won't be able to sell those shares on the stock market. I suggest that your wife direct the question to the management of her company.

Good luck!

Mike Gray

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.