I own five shares of stock in the company I'm employed by. They want me to sell my stock to them, and to place myself in the position of employee only. As this is a right to work state, I will likely be fired by the owner. The manager stated to me that the stock would only be valid if I came in and worked at the shop, doing manual labor- painting, and stagehand work, whenever they decide it's necessary. "Sweat equity," he called it. I've never heard of such a thing before. I think that it's possibly illegal. I was hired as a musician, not a painter or laborer. When the stock was issued to me, no conditions were ever placed on my ownership of the shares.
You need to retain a business lawyer. First off, five shares is very low unless you have an agreement that would prevent any form of dilution and they only issued a rather small amount in total. Second, if there is no shareholder agreement or other contract, the shares are yours do sell or whatever, assuming you comply with the securities laws.
Speak with an attorney as this all sounds suspect.
This answer is for informational purposes only and is not legal advice regarding your question and does not establish an attorney-client relationship.
Chances are if you have stock in the company, you have some form of a contract that provides for a tender of the shares back to the company when you leave. One issue that comes to mind is how your shares may be valued. You should at least demand audited financials so a fair price can be negotiated.
As for the conditions on the stock, you either own it outright or you don't. You can't sell something back to them you don't own. If there's any sort of shareholder agreement in place, how the stock "vests" to you should be described. If there isn't an agreement, you will need to seek relief in court.
While 5 shares may be relatively small, the question becomes how many are outstanding? How many issued? Who owns them? You may own more of the company than meets the eye.
The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client relationship.
You need to gather the contract that are the evidence of your ownership. You may own shares, in which case you should have a written contract and a stock certificate. It is possible the shares are subject to “reverse vesting” or what might be listed in the contract as a repurchase right—that basically allows the company to buy from you all or some of the shares based on certain events, such as the termination of your employment. Typically, that kind of right will lapse over time. For example, you contract might say that at the beginning, your company can buy back 75% of your shares, only 50% in your second year and 25% if you leave the company in your third year. The repurchase price may be the original price, the fair market value, or some other negotiated price. There is also sometimes a buy-sell agreement or a shareholders agreement that says that other shareholder can buy your shares if you leave the company, usually for fair value. But your shares would not be subject to those restrictions if you did not sign anything. As you can see, the answer depends heavily on the terms of your contract.
Also, you may not actually own shares, but you may just have the right to purchase shares. This is called a stock option. This is a contract that says you can buy X shares for $Y per share. They are usually granted at the fair market value at the time, and only become worth something if the stock price goes up. Stock options will usually also vest- you have to keep working for the company for a certain amount of time before you can buy the stock. If your employment is terminated, then you have to pay for the stock in order to acquire it, or else your stock option will probably go away within 3 months, or maybe even sooner.
It is impossible to say with the information you have given what your form of ownership might be, and whether there is a right by the company or another party to buy the shares. You should have signed paperwork at the time the shares were given to you. You should look through all of your records and see what you can find. If you have no records, you still might be entitled to the stock. See if you have an offer letter or email where you were promised stock. I would not suggest asking them for the records at this point, though, without talking to a lawyer first. If they know you do not have copies, they might commit fraud by falsifying documents now. You would have to talk to someone who does business litigation about how you could get the stock.
And while in most states it is legal to give stock as a form of compensation for services, in some states it is not legal to pay someone solely in stock. If you are not also being paid cash, you should talk to someone about violations of minimum wage laws. I can't tell you anything specific about NV law as I have never been licensed there.
Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after a direct consultation in which all of the relevant facts are considered before providing a response.
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