One-time partial ESOP payout question

I left my former company a few years ago and, unfortunately, the ESOP plan has been losing value every year since.  I did take a distribution when I turned 55 last year and, in a few years, I'll be able to start collecting payments every year (20%/year for five years).   I just received a letter stating that the ESOP plan was recently amended to allow for a one-time offer to terminated/vested employees (which I am) to receive a distribution from the plan.  The amount they are offering is roughly 40% of the amount I have left in the plan (which is all in stock).  I've reached out to other people who have left this company and they've also received the same letter (with the flat rate same amount).  Since the plan has been going down ever since I've left (probably down about 25-30%) I'm very tempted to take this offer (I have until mid-November to decide) but I'm curious as to why it would be offered in the first place.  I know that there are no more shares to allocated to new employees so this could be a way to buy back shares for them.  Would it also be advantages for the company to buy back shares in they were looking to sell it?  Curious to see what other people think and what they would do in this situation.

There is a good chance you got it. 

Old ESOPs can what is known as the have/have not problem.   There are no new shares to allocate to the new employees so getting the terminated employees to take a distribution is a source.  They might not even be reallocating all the shares in one year but setting it up so the shares are allocated to employees over a number of years.   But ESOP companies tend to not like only long tenured employees having shares and the new employees don't.  It can cause work place friction.  Joe who has worked at the company for a long time keeps talking about how much his stock is worth and how get it is being an owner employee.  Bob keeps seeing he is only get a few shares every year and thinks I will never do as well as Joe why should I care about the ESOP??

While this appears to not be an issue currently many ESOP companies like to get the shares out of the hands of their former employees if the stock price is going up.  Why compensate a former employee with a higher stock price?  Obviously the point is to compensate the current employees.  So getting shares out of the terms and to current employees is good human resources thinking in most cases.   You want to pay people for current work not past work.  

It is a win for you since you want out with the price going down.  So win/win at this point. 

They are most likely limiting you to 40% becasue they don't think they have the cash to fully cash out the terms. 

Hope that helps.  

ESOP Guy - Thanks for the input; much appreciated!