Employee Stock Purchase Program

[Guest Yah Mon]

I'm looking for assistance with an issue. This Company my friend works for has an employee stock purchase program setup that has it's stock purchase every 6 months.

Recently, just days before the first 6 month period ended, everyone (approx 100 employees) in the ESPP was told there were no shares available for purchase and the money that has been getting deducted from their bi-monthly paychecks was refunded with the June 30th paycheck.

The stock price has dropped to its lowest level in the past 6 months and has more than doubled in price since.

Is the refunding of their money (with no interest either) legal or allowed to be done ??? It was mentioned approximately 90 days ago by the company that there may be a problem with the program, but no details.

Looking for any assistance, guidance or referrals anyone can provide. Thanks in advance...

[Kirk Maldonado]

What does the plan say?

[Guest svatty]

Kirk is right ...

Most likely if it is a well written plan your friend is totally out of luck. The ESPP's I see typically provide that if the plan runs out of shares then either a prorata purchase is done (i.e., only 1000 shares left ... the employees all share in that amount to purchase) or the funds are returned WITHOUT interest.

Tell your friend to check his prospectus or the plan document. The plan document should be available on EDGAR with a little effort searching on the SEC website ...