Is there a grace period for exercising options after termination?
September 13, 2004
Subject: Expired Stock Options
Date: Thu, 2 Sep 2004
When I left my company, I got a letter saying I had three months after my termination date to exercise my options. I terminated 4/30/04. That meant my options were good until 7/31/04. I put in an order to exercise my options on Friday, 7/30 at 6pm. My options canceled the next day.
Should my company reinstate my options because I tried to exercise within the three month period? Don’t companies give until the next business day if the three-month date falls on a weekend?
Date: Fri, 10 Sep 2004
There is no requirement that the employer give a grace period when you exercise your options. For incentive stock options, the Internal Revenue Code provides that, in order to qualify as an incentive stock option, the person must have been an employee on the date three months before the date of such exercise. There is no grace period stated in the code.
I’m afraid you’re out of luck. I think there’s also a reasonable person requirement that you should file during normal business hours, and 6pm is after business hours. So, next time, don’t wait until the last minute.