employee stock program at work.....

[Nine, Frau!]

I was wondering if someone might have any thoughts on a situation I have. My company has an employee stock purchase program where workers can buy stock at a discount. Our stock got really low and the time to buy in the program arrived. Instead of letting employees buy a fixed number of shares, they kicked everyone out and refunded the money. They also revised the plan so no one could buy more than 5000 shares, which implies we could have bought that many shares when it was very low. Anyway, the stock is back up now and there are lots of people at work stewing about not being able to buy during that offering period. I bought some outside of the program on my own when it was low, but lots of my coworkers did not. So what do you think? Is there anything we the employees could do or say about getting kicked out of the stock program when the shares were super low?

[recycled sixtie]

I had a friend who bought company stock and the company went broke and of course he lost both his job and his investment. I too bought co. stock years back.
We had no choice as they deducted it from pay. A few years later the stock became worthless.

From my experience it has not been good . The way your co. is being run it does not sound employee friendly. The conditions of purchase are restricted. If it was me I would be buying only a small amount. However that is just my 5 cents worth.

Don't forget you are working for the co. as well as investing in it. So if it goes belly up you lose twice. Diversification of your assets and talents is key.

[mreid]

No, it is a non-qualified plan and as long as everyone was treated the same, you have no recourse other than to complain or quit. It is a pretty crappy thing to do, though.

[LWJ]

I am NOT EVEN CLOSE to being an expert here. So bear with me. My thought is this: the employer has, or may have (depending on the type of purchase plan) a fiduciary duty to the participants. That is - they can not act against your best interest - which they did.

Did I mention not being an expert? If this is some sort of ESOP, I believe that the Fiduciary role applies.

If so, you could consult an attorney that focuses on these issues.

Best of luck. This is a crap situation.

Larry

[Nine, Frau!]

Hey thanks for the replies. It seems its just another case of the man sticking it to the little guys. I might mention it when I end up quitting, but that is not on the horizon.

[Noah930]

I can't comment on the legality of what they did (no idea), but it certainly sounds like a shtty thing to do to the employees. Particularly the part where they temporarily closed the program and refunded money, only to reopen the plan once the stock price had risen. Certainly feels fishy to my uneducated gut. Barring some good explanation, I suppose that reflects mgmt's valuation of their employees.

[beepbeep]

BTDT. 13 years ago, we could purchase options to buy stock at certain date (usually few years into future) for fixed price. Have lot's of friends that did the same. Never heard anyone actually re-couping costs. My options become worthless when company tanked. Luckily, I got them free. But some colleagues borrowed money to buy them.

Unless it's a "wealth building" exercise to selected few, I would stay away. Especially if it's "to all employees". Nobody gives away free lunch to employees. There is no such thing.

[widebody911]

My company used to have a program where they would take a certain percentage out of your check, and one a quarter would use it buy stock at a 15% discount. I don't know how the purchase price was determined, because it always seemed to be on the high side. Some people made a good chunk of change by selling out when the stock was doing well.

They discontinued the program a few years ago, but recently brought it back, but without the 15% discount. I don't know of anyone who is participating in the new program.

[aigel]

ESPP it is called in short. Generally I would imagine it being a bonus program, meaning it is not part of your base salary, also meaning that it can be gone if times are tough. I would imagine that the stock being very low in price was also the time the company was doing very poorly. So, are you sure they skipped an ESPP period because they did not want to sell the stock at a low price or because they did not have the funds to give a 15% discount.

I don't see an advantage in not having your people buy stock when it is low in price. AAMOF wouldn't it be desirable for people to buy stock when it is struggling, to support it? I really think the 15% coming out of their pocket wasn't there, because they had to make ends meet.

I wouldn't be so negative and get upset if a perk goes away during rough times. I'd be happy to have an ESPP. You should read more about it and ask your controller / bean counter about how to take advantage of the program. To me it has always been an immediate x% bonus on my contribution. I would always sell it immediately, which generally gives you the x%.

G

[biosurfer1]

You just never know how these things will work out. My mom worked for a company for a couple years that offered a 15% discount on their stock to employees, up to a max of something like $50 a paycheck, so she did every pay check and never paid attention. When she left, they gave her the actual paper certificates and she asked me to handle it since she didnt know what to do with them. I went to Scottrade to open an account and deposit them. I logged on a couple days later and found out that mom had about 5500 shares...not bad. She told me she paid an average of about $.50 per share over the 3 years and now the stock was over $3.50!

She celebrated by selling and taking the family to Costa Rica for a vacation. Not bad at all and she knew it could have easily gone the other way.

[gr8fl4porsche]

My Mom worked for Target as an Admin Assistant for about 30 years. Always took advantage of the stock offerings. Retired with 7 figures worth of stock and it's still climbing.

So it really depends on what company you work for in regards to these issues.

[RWebb]

might be fun to see if mgmt. grabbed a bunch of shares during that time period...

[dan88911]

Hey sounds like a smart move on your part. Buying some on your own.
Be careful you may want to limit your exposure remember Enron.
And remember the company doesn't give a rat's a** about you beyond what you can produce.

[Nine, Frau!]

Thanks again for the comments on this.

[BK911]

I dont know the law either, but i would rather have a benefit reduced, suspended or eliminated than loose my job. Could have been worse!!