shares that cannot be traded in the public markets.
Shares acquired in a private placement are considered restricted shares and may not be sold in a public offering absent registration, or after an appropriate holding period has expired. Non-affiliates must wait one year after purchasing the shares, after which time they may sell less than 1% of their outstanding shares each quarter. For affiliates, there is a two-year holding period.
Shares of stock usually obtained in a private placement or owned by an insider where their resale has certain restrictions.
Shares of a company's stock that cannot be sold to the public without either registration, or pursuant to Rule 144. These shares are usually either held by insiders including officers, directors or principal shareholders, or by investors who acquired the shares through a private-placement. With some exceptions, the restriction is for one year.
Shares of stock held by private investors that have not been registered for sale to the public.
Sale of restricted shares is limited, either because of who owns them (such as an insider), or because of the way they were acquired (such as in a private placement). The restriction may be imposed by the securities laws or by an agreement. When shares are used as incentive compensation to employees, they are often subject to a restriction that they can only be sold back to the company until a certain date or event.
Shares that have limited voting rights or in some cases, no voting rights. These shares participate in a company's earnings and assets in liquidation as common shares do and are sometimes referred to as restricted common shares. Restricted shares may not command the same market price as voting common shares of the same company since they do not have voting rights.