Do I need to sign a lock-up agreement for an IPO?
June 20, 2005
Subject: Pre-IPO market lock up question
Date: Tue, 31 May 2005
I have exercised all of my stock options from my previous employer, which is planning to go public soon. The underwriters are requiring all of the company’s equity holders to sign a lock up agreement lasting 180 days after the closing of the IPO. Since I am no longer an employee, why should I sign the lock up agreement?
Date: June 10, 2005
If your refusal to sign the lock up agreement results in the company not being able to make its public offering, you won’t have a market to sell your stock. If you aren’t willing to wait the 180-day period, ask if the company is willing to negotiate to redeem your shares or if another employee is willing to make a private purchase of the shares.