“Holding Period” is the time that a Stockholder must hold its shares of Capital Stock to comply with certain tax, regulatory, contractual or other requirements. Examples of Holding Periods are:
- Certain Assets (including stocks, bonds, etc.) must be held for longer than one year to qualify for Capital Gains tax treatment upon their sale;
- Qualified Small Business Stock must be held for at least five years to qualify for certain tax favorable treatment upon its sale;
- Restricted Stock must be held for certain Vesting periods before the holder is free from the applicable restrictions; and
- Shares of Capital Stock subject to a Lock-Up must be held for the duration of the Lock-Up Holding Period before the Stockholder can sell the shares of Capital Stock.