Restricted Corporate Stock
Restricted stock refers to shares in a corporation that are usually issued to executives, directors, and/or corporate affiliates that is non-transferable except in compliance with certain restrictions. The restrictions are designed to eliminate premature selling that might adversely affect the company. Sale or transfer of shares are usually limited to a defined number of shares over a specified period of time. Restricted stock may also vest over a period of time conditioned on the person continuing in his or her role for a defined period of time. Restricted stock is also commonly called letter stock and section 1244 stock. Restricted stock should not be issued except under the supervision of an experienced attorney.