Definitions for "restricted stock"
Related Terms:
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Stock which is acquired though an employee stock option plan or other private...
Stock that is conditionally given by an employer to compensate an executive. In some instances, the executive is only granted full ownership of the stock if the executive continues to work for the company for a certain period of time.----------[ Back
Restricted stock is stock purchased from the issuer or from a person in a controlled relationship to the issuer in a nonpublic or private transaction. The right to sell restricted stock is limited by provisions in the Securities and Exchange Act.
A stock with trading restrictions, normally at least one year.
Stock which may not be sold for a certain period of time. It is usually owned by corporate Insiders. The holder of restricted stock must notify the SEC prior to selling it by filing a Form 144.
Units of stock with restrictions on when they can be sold. Usually issued as partial compensation for employees and directors. The restriction usually lifts in 3 to 5 years when the stock vests.
A restricted stock award is an outright grant of shares of stock by a company to an individual, usually an employee, without any payment by the recipient or for only a nominal payment. Generally, the shares of stock are subject to a contractual provision under which the granting company has the right (but not the obligation) to repurchase or reacquire the shares from the recipient upon the occurrence of a specified event (such as termination of employment). This right of repurchase or reacquisition expires after a specified period of time, either all at once or in increments. The expiration of this right is referred to as "vesting." During the period that the shares of stock may be repurchased or reacquired, the recipient is prohibited from selling or otherwise transferring the shares. This is why the shares are called "restricted" stock. (Note that "restricted stock" is different from "restricted securities" under Rule 144. See Rule 144: Selling Restricted and Control Securities.)
Stock that must be traded in compliance with special SEC regulations concerning its purchase and resale. These restrictions generally result from affiliate ownership, M&A activity, and underwriting activity.
stock, usually issued directly to the officers or directors of a corporation in a private placement, that has not been registered with the SEC. Resale of restricted securities in the public markets must be made through registration, which, in certain specific cases, may be obtained through compliance with Rule 144
Stock that is not owned outright, in that the employee could be asked to forfeit the stock. There are also restrictions on whom the stock can be transferred to until the restrictions are lifted. Once the restrictions are lifted, the owner of the stock is taxed on the stock's value above what he or she paid for it at the ordinary income tax rate.
Restricted Stock Award Restricted surplus
Stock you get for services you perform that is nontransferable and is subject to a substantial risk of forfeiture.
This is stock given to an employee or which is sold to an employee at a discount. The employee is typically prevented from selling or otherwise disposing of the stock for a specified period. The employee owns any dividends deriving there from; but if he or she should leave the company before the period of restriction, then he or she forfeits the stock.
Stock which was not registered under the Securities Act of 1933. Stock purchased through a company's stock option plan or a private placement will be unregistered. The purchaser will sign a letter agreeing that the purchase is for investment and not a short-swing profit. The holding period for restricted stock is two years. Sale of restricted stock is covered by Rule 144. See: Rule 144, Letter Stock, Short Swing Profit.
Insider holdings that are under some other kind of sales restriction. Restricted stock must be traded in compliance with special SEC regulations.
Stock that is not registered under the Securities Exchange Act of 1933. Restricted stock is either purchased through a company's stock option plan, or a private placement. The investor is required to sign a letter agreeing that the purchase is for investment and not short term profit. The investor is required to hold the stock for two years before it can be sold. Sale of restricted stock is governed by SEC Rule 144. See: Letter Security; Rule 144; Securities Exchange Act of 1933
Restricted stock, also known as letter stock or restricted securities, refers to stock of a company that is not fully transferable until certain conditions have been met. Upon satisfaction of those conditions, the stock becomes transferable by the person holding the award. Typically the conditions are a period of time.