A restriction on transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge of the restriction unless:
(1)
the security is certificated and the restriction is noted conspicuously on the security certificate; or
Security: except as otherwise provided in Section 70A-8-102, means an obligation of an issuer or a share, participation, or other interest in an issuer or in property or an enterprise of an issuer that:
(i)
is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;
(ii)
is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests, or obligations; and
(iii)
(A)
is, or is of a type, dealt in or traded on securities exchanges or securities markets; or
(B)
is a medium for investment and by its terms expressly provides that it is a security governed by this chapter. See Utah Code 70A-8-101
Security certificate: means a certificate representing a security. See Utah Code 70A-8-101
(2)
the security is uncertificated and the registered owner has been notified of the restriction.
Repealed and Re-enacted by Chapter 204, 1996 General Session
