First-category restricted stock — a type of equity incentive plan/instrument

Restricted stock refers to the Company’s own shares granted to incentive recipients under an equity incentive plan, subject to restrictions on certain rights—including transfer. Prior to lifting such restrictions, the restricted stock may not be transferred, pledged as security, or used to settle debts. Under a first-category restricted stock plan, the Company grants a specified number of shares to incentive recipients on the grant date; recipients must purchase these shares at the stipulated grant price. Once the unlocking conditions and lock-up requirements are satisfied, the shares may be freely sold (subject to additional restrictions applicable to directors and senior executives). For first-category restricted stock, payment is due upon grant—recipients must pay the full purchase price for all awarded shares upfront. This entails a certain capital cost for the recipients. However, for Main Board-listed companies in China, second-category restricted stock is not permitted as an incentive tool; thus, if a discount grant is desired, only first-category restricted stock may be used. Matrix of First-Category Restricted Stock: Operational Process for First-Category Restricted Stock: If any inaccuracies exist, we welcome your corrections and feedback.

Trading rules for restricted securities—Introduction to Securities Act of 1933 Rule 144

However, after the company listed on the NASDAQ in the United States, the listed company refused to assist this shareholder in selling his restricted shares, citing as justification that the shareholder must first repay tens of millions of RMB in loans owed to the company before such assistance would be provided. The shareholder, however, maintained that he owed no such loan to the company. As negotiations reached an impasse, the shareholder’s equity stake in the NASDAQ-listed company remained unrealized. Key challenges in this case: Enforcement within China faces significant difficulties. First, there is the issue of jurisdiction—can U.S. securities law be applied to resolve such disputes under Chinese law? Second, even if jurisdiction is established, enforcement of any resulting judgment in the United States remains unfeasible (as of the time of writing, China has not yet ratified the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters). After thorough research, the author proposes the solution outlined herein: utilizing the exemption provided under Rule 144 of the U.S. Securities Act of 1933 to resolve the restricted share sale issue. Discussion I. Introduction to Restricted Securities Trading in the United States Restricted securities in the U.S. typically bear a restrictive legend explicitly stating that they may not be traded on public markets unless exempted under relevant SEC regulations. Rule 144 under the Securities Act of 1933 (hereinafter “Rule 144”) is the most commonly invoked exemption for restricted securities. Under Rule 144, in addition to satisfying a holding period of either six months or one year, the restrictive legend on the stock certificate must be removed before the shares may be sold. Only the transfer agent has the authority to remove such a legend—and doing so requires an opinion letter. In most cases, shareholders may contact the listed company directly to request removal of the legend, or—if they have a broker—ask the broker to facilitate the process. Regardless, an opinion letter is invariably required. Transfer Agent: A transfer agent is a company engaged by a specific issuer to maintain records of individuals’ or entities’ ownership of that issuer’s publicly traded securities. It issues and cancels certificates evidencing stock ownership, serves as an intermediary in stock transactions, handles matters related to lost or stolen certificates, and is also responsible for removing restrictive legends. II. Securities Act of 1933 Rule 144 Rule 144 was incorporated into the Securities Act of 1933 by the U.S. Securities and Exchange Commission (SEC) in 1972. The purpose of Rule 144 is to provide clearer standards for determining who qualifies as an underwriter, and to prescribe rules governing how and when restricted securities may be sold. It offers guidance to issuers, broker-dealers, shareholders, and transfer agents regarding the trading of restricted securities. Specific provisions include rules for calculating the holding period, filing requirements for each release of restricted shares, and other limitations. Rule 144 applies to securities acquired through private placements, employee equity incentive plans, mergers and acquisitions, and other non-public transactions—as well as securities acquired by affiliates (e.g., directors, major shareholders, and others capable of influencing corporate management and policy).

Avient Corp Files Form 144 Notice of Intent to Sell Restricted Stock

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Avient Corp submitted a Form 144 on November 12, 2026, declaring an intent to sell restricted shares. The filing outlines the basic announcement without providing specific transaction details.

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Avient Corp Files Form 144 Notice of Intent to Sell Restricted Stock

Avient Corp Files Form 144 Notice of Intent to Sell Restricted Stock

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