Section 10-2B-6.27

Restriction on transfer of shares and other securities.

(a) 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 corporation. A restriction does 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.

(b) A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder including an executor, administrator, trustee, guardian, conservator or other fiduciary entrusted with like responsibility for the person or estate of the holder, provided the restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by Section 10-2B-6.26(b). Even if not so noted, a restriction is enforceable against a person with actual knowledge of the restriction.

(c) A restriction on the transfer or registration of transfer of shares is authorized:

(1) To maintain the corporation's status when it is dependent on the number or identity of its shareholders; or

(2) To preserve exemptions under federal or state securities law; or

(3) For any other reasonable purpose.

(d) A restriction on the transfer or registration of transfer of shares may include, but shall not be limited to, a restriction that:

(1) Obligates the shareholder first to offer the corporation or other persons (separately, consecutively, or simultaneously) an opportunity to acquire the restricted shares;

(2) Obligates the corporation or other persons (separately, consecutively, or simultaneously) to acquire the restricted shares;

(3) Requires 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;

(4) Prohibits the transfer or registration of the restricted shares to or in the name of designated persons or classes of persons, if the prohibition is not manifestly unreasonable; or

(5) Requires the corporation to refuse to transfer the shares.

(e) For purposes of this section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.

(Acts 1994, No. 94-245, p. 343, §1; Acts 1996, No. 96-742, p. 1241, §6.)