2006 Code of Virginia § 13.1-708 - Voting on amendments by voting groups

13.1-708. Voting on amendments by voting groups.

A. Except as otherwise provided in the articles of incorporation, if acorporation has more than one class of shares outstanding, the outstandingshares of a class are entitled to vote as a separate voting group on aproposed amendment of the articles of incorporation if shareholder voting isotherwise required by this chapter and if the amendment would:

1. Increase or decrease the aggregate number of authorized shares of theclass, provided that the vote of the class as a separate voting group is notrequired to increase or decrease the number of authorized shares of the class(but not below the number of shares thereof then outstanding and the numberof shares required to be reserved for issuance), if so provided in thearticles of incorporation as in effect prior to the issuance of any shares ofthe class or in any amendment thereto that was approved by the required voteof the shares of such class;

2. Effect an exchange or reclassification of all or part of the shares of theclass into shares of another class;

3. Effect an exchange or reclassification, or create the right of exchange,of all or part of the shares of another class into shares of the class;

4. Change the rights, preferences, or limitations of all or part of theshares of the class, but such class shall not be entitled to vote as aseparate voting group on an amendment increasing the number of authorizedshares of a subordinate class solely because both such classes vote on someor all matters as a single voting group;

5. Change the shares of all or part of the class into a different number ofshares of the same class;

6. Create a new class of shares or change a class of shares with subordinateand inferior rights into a class of shares, having rights or preferences withrespect to distributions or to dissolution that are prior or superior to theshares of the class, or increase the rights, preferences, or number ofauthorized shares of any class that after giving effect to the amendment,have rights or preferences with respect to distributions or to dissolutionthat are prior or superior to the shares of the class;

7. In the case of a class of shares with preferential rights, divide theshares into a series, designate the series, and determine, or, unlessauthority was conferred at the time the class was created, authorize theboard of directors to determine, variations in the rights, preferences andlimitations among the shares of the respective series;

8. Limit or deny an existing preemptive right of all or part of the shares ofthe class; or

9. Cancel or otherwise affect rights to distributions that have accumulatedbut not yet been declared on all or part of the shares of the class.

B. If a proposed amendment would affect a series of a class of shares in oneor more of the ways described in subsection A, the holders of shares of thatseries are entitled to vote as a separate voting group on the proposedamendment.

C. If a proposed amendment that entitles two or more classes or series ofshares to vote as separate voting groups under this section would affectthose two or more classes or series in the same or a substantially similarway, the holders of shares of all the classes or series so affected shallvote together as a single voting group on the proposed amendment, unless thearticles of incorporation provide for different voting rights for shares ofthe different classes or series.

D. A class or series of shares is entitled to the voting rights granted bythis section although the articles of incorporation provide that the sharesare nonvoting shares; provided, however, that, except as otherwise providedin the articles of incorporation, shares that are convertible into shares ofanother class or series shall not have any right, prior to conversion, tovote on any matter because it affects the class or series into which suchshares are convertible.

(Code 1950, 13.1-57; 1956, c. 428; 1975, c. 500; 1985, c. 522; 1996, c.238; 1997, c. 400; 2005, c. 765.)