2006 Code of Virginia § 13.1-651 - Shareholders\' preemptive rights

13.1-651. Shareholders' preemptive rights.

A. Unless limited or denied in the articles of incorporation and subject tothe limitations in subsections D through G, the shareholders of a corporationincorporated on or before December 31, 2005, have a preemptive right, grantedon uniform terms and conditions prescribed by the board of directors toprovide a fair and reasonable opportunity to exercise the right, to acquireproportional amounts of the corporation's unissued shares upon the decisionof the board of directors to issue them.

B. Unless otherwise provided for in the articles of incorporation, theshareholders of a corporation incorporated after December 31, 2005, have nopreemptive right to acquire the corporation's unissued shares upon thedecision of the board of directors to issue them.

C. Except to the extent that the articles of incorporation expressly provideotherwise, a shareholder may waive the shareholder's preemptive right. Awaiver evidenced by a writing is irrevocable even though it is not supportedby consideration.

D. Unless expressly conferred in the articles of incorporation, there is nopreemptive right with respect to:

1. Shares issued to officers or employees of the corporation or of itssubsidiaries pursuant to a plan approved by the shareholders; or

2. Shares sold other than for money.

E. Holders of shares of any class with preferential rights to distributionsor assets have no preemptive rights with respect to shares of any class.

F. Holders of shares of any class without preferential rights todistributions or assets have no preemptive rights with respect to shares ofany class with preferential rights to distributions or assets unless theshares with preferential rights are convertible into, or carry a right tosubscribe for or acquire, shares without preferential rights.

G. Holders of shares without general voting rights and without preferentialrights to distributions or assets have no preemptive rights with respect toshares of any class with general voting rights but without preferentialrights to distributions or assets.

H. Except to the extent that the articles of incorporation expressly provideotherwise, shares subject to preemptive rights that are not acquired byshareholders may be issued to any person for a period of one year after beingoffered to shareholders at a consideration set by the board of directors thatis not lower than the consideration set for the exercise of preemptiverights. An offer at a lower consideration or after the expiration of one yearis subject to the shareholders' preemptive rights.

I. For purposes of this section, "shares" includes any warrants, rights oroptions to acquire any such shares or any security or other obligation of thecorporation convertible into any such shares or into warrants, rights oroptions to acquire any such shares.

(Code 1950, 13.1-23; 1956, c. 428; 1975, c. 500; 1985, c. 522; 2005, c.765.)