271B.6-270 Restrictions on transfer or registration of shares or other securities. (1) The articles of incorporation, bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction shall not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction. (2) A restriction on the transfer or registration of transfer of shares shall be valid and enforceable against the holder, or a transferee of the holder if the restriction is authorized by this section, and the holder or transferee has actual knowledge of the restriction or its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by KRS 271B.6- 260(2). Unless so noted or contained, a restriction is not enforceable against a person without knowledge of the restriction. (3) A restriction on the transfer or registration of transfer of shares shall be authorized: (a) To maintain the corporation's status when it is dependent on the number or identity of its shareholders; (b) To preserve exemptions under federal or state securities law; (c) In connection with shares issued by the corporation to its officers, directors, employees, or equity-based compensation under the Internal Revenue Code; or independent contractors, including as (d) For any other reasonable purpose. (4) A restriction on the transfer or registration of transfer of shares may without limitation: (a) Obligate the shareholder first to offer the corporation or other persons, separately, consecutively, or simultaneously, an opportunity to acquire the restricted shares; (b) Obligate the corporation or other persons, separately, consecutively, or simultaneously, to acquire or transfer the restricted shares; (c) Obligate a shareholder to transfer the restricted shares to the corporation or other persons for an agreed price or a price based on a valuation formula, including an obligation to transfer the shares for an amount equal to the original consideration paid for the shares; (d) Require the corporation, the holders of any class of its shares, or another person to approve the transfer of the restricted shares, if the requirement is not manifestly unreasonable; or (e) Prohibit the transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable. (5) For purposes of this section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares. Effective: July 15, 2010 History: Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 61, effective July 15, 2010. -- Amended 2007 Ky. Acts ch. 137, sec. 61, effective June 26, 2007. -- Amended 2002 Ky. Acts ch. 102, sec. 13, effective July 15, 2002. -- Created 1988 Ky. Acts ch. 23, sec. 44, effective January 1, 1989. Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, "The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section."