§ 13.1-651

Shareholders’ preemptive rights

A. Unless limited or denied in the articles of incorporation and subject to the limitations in subsections D through G, the shareholders of a corporation incorporated on or before December 31, 2005, have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation’s unissued shares upon the decision of the board of directors to issue them.

B. Unless otherwise provided for in the articles of incorporation, the shareholders of a corporation incorporated after December 31, 2005, have no preemptive right to acquire the corporation’s unissued shares upon the decision of the board of directors to issue them.

C. Except to the extent that the articles of incorporation expressly provide otherwise, a shareholder may waive the shareholder’s preemptive right. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.

D. Unless expressly conferred in the articles of incorporation, there is no preemptive right with respect to:

1. Shares issued to officers or employees of the corporation or of its subsidiaries 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 distributions or assets have no preemptive rights with respect to shares of any class.

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

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

H. Except to the extent that the articles of incorporation expressly provide otherwise, shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the shareholders’ preemptive rights.

I. For purposes of this section, “shares” includes any warrants, rights or options to acquire any such shares or any security or other obligation of the corporation convertible into any such shares or into warrants, rights or options to acquire any such shares.

History

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

Download

  • Plain Text
  • JSON
  • XML

Comments