expiation of put option period

[LIBERTYKID]

An ESOP gave a participant the right to put shares of stock distributed to the participant to the company in two 60 days periods in the year of distribution and the year after distribution. The participant did not exercise his or her put rights during such period. Am I correct that the law does not give the former participant any other rights to put the shares? How can the former participant liquidate the closely held stock in this situation?

[RLL]

The company or the ESOP may be interested in purchasing the shares, even though there are no put option rights. Also, there may be current employees that would purchase the shares.

[GMK]

I agree with RLL. The put option gives the employee the right to REQUIRE the company or plan to buy the stock during those 60 day periods. It does not prevent a mutually-agreed-to sale at other times.

One caution: Before selling the stock to another employee, check with the company to see if the by-laws restrict the sale or ownership of the stock. Sometimes you must offer the stock to the company or plan first, before you can sell it to another person. And there may be other restrictions on the ownership of the closely held stock.