© Copyright Envision Corporation. 2002. All rights reserved.

Protected by the copyright laws of the United States & Canada and by international treaties. IT IS
ILLEGAL AND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER
PARTY, THIS PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN A COURT OF LAW.

LEGENDS FOR STOCK CERTIFICATES

©

C
o
p 1. SECURITIES ACT LEGEND
y
r In typical start-up companies where the shares are issued under the private placement exemption from
the registration requirements of the Securities Act of 1933, the following legend (or a variation thereof)
i should be placed on the front of the stock certificate or on the back with a notice on the front referring to
g the legend:
h
t THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED OR PLEDGED IN
E THE ABSENCE OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN
n OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY STATING
v THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
i PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. COPIES OF THE
s AGREEMENT, IF ANY, COVERING THE PURCHASE OF THESE SHARES AND
RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
i REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
o SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF
n THE CORPORATION.

C
o 2. INTRASTATE OFFERING LEGEND
r If the securities have been issued in a transaction exempted from the federal registration requirements
p pursuant to the intrastate offering exemptions from the Securities Act of 1933, then the following legend
o should be placed on the stock certificate:
r
a FOR A PERIOD OF NINE MONTHS FROM THE DATE OF THE LAST SALE OF
SECURITIES BY THE ISSUER IN CONNECTION WITH THE OFFERING WHREBY
t THESE SHARES WERE PUCHASED, ALL RESALES OF THESE SECURITIES, BY
i ANY PERSON, SHALL BE MADE ONLY TO BONA FIDE PERMANENT RESIDENTS OF
o THE STATE OF [name of state].
n
.
3. STATE SECURITIES LEGEND
2 State securities laws may require the imposition of additional legends. For example, in California, if
0 securities are qualified with the Department of Corporations, the following legend is sometimes required
0 by the Department of Corporations on the certificate:
2
. IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SECURITIES,
OR ANY INTEREST THEREIN OR TO RECEIVE ANY CONSIDERATION THEREFOR,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF
A CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE
l COMMISSIONER’S RULES.
l

r
i

Legends for Stock Certificates Page 1 of 2

© Copyright Envision Corporation. 2002. All rights reserved. Protected by the copyright laws of the United States & Canada and by international treaties. IT IS
ILLEGAL AND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER
PARTY, THIS PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN A COURT OF LAW.

4. RESTRICTIONS ON TRANSFER
If the company and the shareholders have entered into an agreement imposing restrictions on transfer of
the shares or placing rights of first refusal on sale of the shares, a form of the following legend is
appropriate. Restrictions on transfer may not be valid as against a purchaser without actual knowledge of
the restriction unless the restriction is conspicuously noted on the certificate.

THE SHARE, TRANSFER, OR HYPOTHECATION OF THE SHARES REPRESENTED

BY THIS CERTIFICATE IS RESTRICTED BY THE PROVISIONS OF AN AGREEMENT
AMONG THE ISSUER OF THESE SHARES AND ITS SHAREHOLDERS, A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER.

5. EMPLOYEE RESTRICTED STOCK

If the shares are issued pursuant to an Employee Restricted Stock Purchase Agreement that provides for
vesting of the shares dependent upon continued employment with the company, or if the company or
other shareholders have certain repurchase rights in connection with the shares, a variation of the
following provision will be appropriate:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO

REPURCHASE PROVISIONS IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT BETWEEN THE ISSUER AND THE SHAREHOLDER, A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER.

6. PREFERRED STOCK
If the stock to be issued is preferred stock, consider the following legend:

THE RIGHTS, PREFERENCES, PRIVELEGES AND RESTRICTIONS GRANTED TO

OR IMPOSED UPON EACH CLASS OR SERIES OF SHARES OF THE CORPORATION
ARE CONTAINED IN THE CORPORATION’S ARTICLES OF INCORPORATION, A
COPY OF WHICH IS OBTAINABLE FROM THE SECRETARY OF THE CORPORATION
UPON REQUEST AND WITHOUT CHARGE.

7. OTHER LEGENDS
It may also be required by law or be otherwise appropriate that the share certificate reflect rights or
liabilities attendant to the shares such as assessment rights, preemptive rights, special qualifications of
persons who may be shareholders, restrictions on or assignment of voting rights, or rights of co-sale and
the like.

Legends for Stock Certificates Page 2 of 2