New York Legend on Stock Certificate with Reference to Separate Document Restricting Transfer of Shares refers to a specific type of notation or statement found on stock certificates issued by New York-based companies. This legend highlights the existence of a separate document that imposes restrictions on the transfer or sale of the shares represented by the certificate. This document, known as a Restrictive Share Transfer Agreement or a Stock Restriction Agreement, outlines certain conditions, limitations, or requirements that prevent or regulate the shares' transfer. The New York Legend serves as a visible reminder to shareholders, potential buyers, and other parties that the shares described on the stock certificate are subject to the terms and provisions specified in the separate document. This legend is typically located on the face of the stock certificate and often reads: "THE SHARES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS AND CONDITIONS CONTAINED IN A SEPARATE DOCUMENT RESTRICTING TRANSFER OF SHARES." It is important to note that there can be different variations or types of New York Legends on Stock Certificates, depending on the specific nature of the restrictions outlined in the separate document. Some common types include: 1. Lock-up Agreement Legend: This type of New York Legend reflects a lock-up period during which the shareholder is prohibited from selling or transferring the shares. Lock-up periods usually coincide with significant corporate events such as initial public offerings (IPOs), mergers, acquisitions, or other strategic transactions. 2. Voting Rights Restriction Legend: This New York Legend denotes a restriction on the voting rights associated with the shares. It might specify that certain shares carry limited or specific voting rights, or that the shareholder must adhere to specific guidelines when exercising their voting rights. 3. Transferability Restriction Legend: This type of New York Legend indicates limitations on the transferability of the shares. It may state that the shares can only be transferred under certain circumstances, such as with the prior consent of the company's board of directors or when certain conditions are met. 4. Buyback Clause Legend: This New York Legend pertains to a provision that grants the company the right to repurchase the shares from the shareholder at a specified price or under predefined conditions. It serves as a reminder that the company holds the option to buy back the shares in certain situations. Overall, the presence of a New York Legend on a Stock Certificate serves to inform shareholders, potential buyers, and relevant parties about the need to consult and comply with the restrictions outlined in the separate document. It is crucial for individuals involved in stock transfers to carefully review and understand the terms and conditions laid out to ensure compliance with the restrictive provisions.
New York Legend on Stock Certificate with Reference to Separate Document Restricting Transfer of Shares
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FAQ
In general, restricted securities are acquired in a nonpublic transaction (private placement). Such securities are unregistered, can only be resold under certain conditions and usually bear a legend to that effect.
The purpose of the restrictive legend or notation is to protect the issuing company from loosing its private placement exemption for the initial sale of the securities and to notify the investor that the restricted securities cannot be resold into the public securities market without satisfying certain requirements.
Restricted stock refers to unregistered shares of ownership in a corporation that are issued to corporate affiliates, such as executives and directors. Restricted stock is non-transferable and must be traded in compliance with special Securities and Exchange Commission (SEC) regulations.
Only a transfer agent can complete the task of removing a restrictive stock legend. The transfer agent will require an opinion letter from the issuer's counsel or from his or her own lawyer plus 144 papers completed by a broker?stating that the restricted legend can be removed.
A company whose shares are restricted in transfer is called a privately held company. Restriction on transfer of shares means that shares cannot be transferred without the approval of the board of directors or the general meeting of shareholders.
In order to have the legend on a stock certificate removed, investors should contact the company's shareholder relations department to find out the details of the removal process. Following that, the company will send a confirmation authorizing its transfer agent to remove the legend.
