17-6426.   Restrictions on transfer or ownership ofsecurities.(a) A written restriction on the transfer or registration of transfer of asecurity of a corporation, or on the amount of the corporation's securitiesthat may be owned by any securities holder or a group of securities holders, ifpermitted by this section and noted conspicuously on the certificaterepresenting the security, or, in the case of uncertificated shares, containedin the notice sent pursuant to subsection (f) of K.S.A. 17-6401, and amendmentsthereto, may be enforced against the holder of the restricted security or anysuccessor or transferee of the holder, including an executor, administrator,trustee, guardian or other fiduciary entrusted with like responsibility for theperson or estate of the holder. Unless noted conspicuously on the certificaterepresenting the security, or, in the case of uncertificated shares, containedin the notice sent pursuant to subsection (f) of K.S.A. 17-6401, and amendmentsthereto, restriction, even though permitted by this section, is ineffectiveexcept against a person with actual knowledge of the restriction.

      (b)   A restriction on the transfer or registration of transfer of securitiesof a corporation, or on the amount of the corporation's securities that may beowned by any securities holder or a group of securities holders, may be imposedeither by the articles of incorporation or by the bylaws or by an agreementamong any number of security holders or among such holders and the corporation.No restriction so imposed shall be binding with respect to securities issuedprior to the adoption of the restriction unless the holders of the securitiesare parties to an agreement or voted in favor of the restriction.

      (c)   A restriction on the transfer or registration of transfer of securitiesof a corporation or on the amount of such securities that may be owned by anysecurities holder or group of securities holders is permitted by this sectionif it:

      (1)   Obligates the holder of the restricted securities to offer to thecorporation or to any other holders of securities of the corporation or to anyother person or to any combination of the foregoing, a prior opportunity, to beexercised within a reasonable time, to acquire the restricted securities;

      (2)   obligates the corporation or any holder of securities of the corporationor any other person or any combination of the foregoing, to purchase thesecurities which are the subject of an agreement respecting the purchase andsale of the restricted securities;

      (3)   requires the corporation or the holders of any class or series ofsecurities of the corporation to consent to any proposed transfer of therestricted securities or to approve the proposed transferee of the restrictedsecurities, or to approve the amount of securities of the corporation that maybe owned by any securities holder or group of securities holders;

      (4)   obligates the holder of the restricted securities to sell or transferan amount of restricted securities to the corporation or to any other holdersof securities of the corporation or to any other person or to any combinationof the foregoing, or causes or results in the automatic sale or transfer of anamount of restricted securities to the corporation or to any other holders ofsecurities of the corporation or to any other person or to any combination ofthe foregoing; or

      (5)   prohibits or restricts the transfer of the restricted securities to, orthe ownership of restricted securities by, designated persons or classes ofpersons or groups of persons, and such designation is not manifestlyunreasonable.

      (d)   Any restriction on the transfer or the registration of transfer of thesecurities of a corporation, or on the amount of securities of a corporationthat may be owned by a securities holder or group of securities holders, forany of the following purposes shall be conclusively presumed to be for areasonable purpose: (1) Maintaining any local, state, federal or foreign taxadvantage to the corporation or its stockholders, including without limitation:(A) Maintaining the corporation's status as an electing small businesscorporation under subchapter S of the United States internal revenue code, 26U.S.C. §1371 et seq., (B) maintaining or preserving any taxattribute, including without limitation net operating losses, or (C) qualifyingor maintaining the qualification of the corporation as a real estate investmenttrust pursuant to the United States internal revenue code or regulationsadopted pursuant to the United States internal revenue code, or (2) maintainingany statutory or regulatory advantage or complying with any statutory orregulatory requirements under applicable local, state, federal or foreign law.

      (e)   Any other lawful restriction on transfer or registration of transferof securities, or on the amount of securities that may be owned by any personor group of persons, is permitted by this section.

      History:   L. 1972, ch. 52, § 53;L. 1988, ch. 99, § 21;Revived and amend., L. 1988, ch. 100, § 21;L. 2004, ch. 143, § 25; Jan. 1, 2005.