KRS 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 an d

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 independent contractors, including as equity -based

compensation under the Internal Revenue Code; or

(d) For any other reasonable purpose.

(4) A restriction on the transfer or registration of transfer o f 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, sep arately, 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.