13.1-707 - Amendment of articles of incorporation by directors and shareholders. - Virginia Statutes

§ 13.1-707. Amendment of articles of incorporation by directors andshareholders.

A. Except where shareholder approval of an amendment of the articles ofincorporation is not required by this chapter, an amendment to the articlesof incorporation shall be adopted in the following manner:

1. The proposed amendment shall be adopted by the board of directors.

2. After adopting the proposed amendment the board of directors shall submitthe amendment to the shareholders for their approval. The board of directorsshall also transmit to the shareholders a recommendation that theshareholders approve the amendment, unless the board of directors makes adetermination that because of conflicts of interest or other specialcircumstances it should not make such a recommendation, in which case theboard of directors shall transmit to the shareholders the basis for thatdetermination; and

3. The shareholders entitled to vote on the amendment shall approve theamendment as provided in subsection D.

B. The board of directors may condition its submission of the proposedamendment on any basis.

C. The corporation shall notify each shareholder, whether or not entitled tovote, of the proposed shareholders' meeting in accordance with § 13.1-658.The notice of meeting shall also state that the purpose, or one of thepurposes, of the meeting is to consider the proposed amendment and contain orbe accompanied by a copy of the amendment.

D. Unless this chapter or the board of directors, acting pursuant tosubsection B, requires a greater vote, the amendment to be adopted shall beapproved by each voting group entitled to vote on the amendment by more thantwo-thirds of all the votes entitled to be cast by that voting group. Thearticles of incorporation may provide for a greater or lesser vote than thatprovided for in this subsection or a vote by separate voting groups so longas the vote provided for is not less than a majority of all the votes cast onthe amendment by each voting group entitled to vote on the amendment at ameeting at which a quorum of the voting group exists.

E. When an exchange, reclassification or change of shares is effected byamendment of the articles of incorporation, and a material difference inright results, or the par value of the shares is changed or the corporatename is changed, the action of the shareholders authorizing the amendment mayprescribe a time after which the holders of the old shares shall no longer beentitled to receive distributions or to vote or to exercise any other rightsas shareholders until certificates representing the old shares aresurrendered in exchange for certificates representing the new shares. Butupon such surrender all distributions not paid because of this provisionshall be paid without interest.

(Code 1950, §§ 13-37, 13.1-19, 13.1-56; 1956, c. 428; 1972, c. 580; 1975, c.500; 1985, c. 522; 2005, c. 765.)