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Subject:   Non-Qualified Stock Option Agreement
Date:   Tue, 24 Sep 2002
From:   Kim

Hi,

I was given a grant agreement in September 1999 for 1000 share of my employer's stock. I stopped working for the company in October 2001, and just found out in January of 2002 they decided the stocks would be worth nothing, but the current employees that remained there that I worked with have received a cash settlement of some sort for these same stock options that we were all granted at the same time in 1999. My question is why wasn't I informed in any way if I was granted these options back in 1999 that this was done in January of this year, and am I due any compensation?

Kim

Answer

Hello Kim,

I am not an attorney. I suggest that you consult with one.

It doesn't appear the company was obligated to pay a cash settlement to continuing employees, so it doesn't appear you are entitled to compensation. This was apparently an optional "bonus" to reward continuing employees.

I don't know why the company didn't communicate with you about this, except the offer only applied to continuing employees.

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.