Definitions for "Lock-up Agreement"
investors, management and employees often agree not to sell their shares for a specific time period after an IPO, usually 6 to 12 months. By avoiding large sales of its stock, the company has time to build interest among potential buyers of its shares.
Agreement between an underwriter and certain stockholders of a company requiring the stockholders to refrain from selling their shares in the public market for a specified period after a public offering. In the USA this period is customary 180 days after an IPO and 90 days after subsequent offerings, but may range from as little as 30 days to as much as one year.
A legally binding contract between the underwriters and insiders of the company prohibits them from selling any shares of stock for a certain specified period of time.