What is “restricted stock”?

What is “restricted stock”?

“Restricted stock” can be classified in two different ways:

  1. It is stock that a Shareholder or a prior owner purchased directly from the issuing company without registration under the Securities Act of 1933; or
  2. Stock that the Shareholder or a prior owner purchased (or received as a gift or pledge) directly from a control person (also referred to as an “Affiliate”) of the company in a private placement or non-public transaction.
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