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I am searching for the definition of a "restricted stock".


Restricted stock is stock that has restrictions on selling. Typically it is stock issued to employees through stock options prior to the company going public.
"Generally refers to stock purchased in a private placement directly from an issuer before the company is public. It may also have been acquired through a merger or acquisition.

Restricted stock cannot be sold without registration under the Securities Act of 1933 or through a special exemption."

Rule 144 covers Sale of this stock.
"Form 144
Also known as Rule 144, this is a form which must be filed with the SEC when an executive officer, director or affiliate of a company places an order to sell that company's stock.

There are five basic requirements to sell under 144:
-The form must be filed properly.
-Adequate current public information must be available. For example, required reports such as the 10K and 10Q forms must have been filed with the SEC.
-Volume limitations have to be met. One limitation is the sale must not be greater than 1% of outstanding shares.
-The transaction must be made by a stockbroker in accordance with certain procedures and rules.
-If the securities are restricted they cannot be sold until one year after the date the affiliate paid the entire purchase price."

Fool On,

Keith O'Malley
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