a company I recently left ran up against this same 500 shareholder rule. To get back down comfortably below 500, they performed a substantial reverse split, which caused many former employees to be taken down below 1 share. Apparently at that level, the company can cash them out as you can't hold only a fraction of 1 share.

Once those former employees were rounded into nothingness, they performed a forward split to restore everything to their previous levels.

I thought that was a rather clever workaround.