I've read some other posts on here about other ESPPs and it sounds like some people are participating so they can buy shares, sell to take of the income from the 15% discount they got on their shares, and immediately turn around and invest that money into their mutual fund. I looked into my company's program today and their document says the following:
11. LIMITATIONS ON TRANSFER OF COMMON STOCK
A Participant who disposes (whether by sale, exchange, gift or otherwise) of any of the
Shares acquired pursuant to the Plan within two years after the Offering Date for such Shares or
within one year after the issuance of Shares shall notify the Company in writing of such
disposition within 30 days after such disposition. Notwithstanding anything in the Plan to the
contrary, if any Participant who disposes (whether by sale, exchange, gift or otherwise) of any
Share purchased under the Plan during the first two years following the Offering Date for such
Shares, the Company may, in its sole discretion, prohibit such Participant from eligibility to
make further purchases under the Plan, or to have payroll deductions made for such purpose, for
a period of up to one year after such disposition.
If I'm reading that correctly, it's saying that if I do what others on this forum have done and immediately sell and put in mutual fund, then the company could just bar me from participating. Is that right?
Sorry if dumb question, but I just want to be sure this option is off limits.