                                 CODE OF VIRGINIA

ACTION ON PLAN OF CONVERSION (§ 13.1-722.11)

A. In the case of a conversion of a domestic corporation to a domestic or
foreign eligible entity, the plan of conversion shall be adopted in the
following manner:

   1. The plan of conversion shall first be adopted by the board of directors.

   2. After adopting the plan of conversion, the board of directors shall submit
   the plan to the shareholders for their approval. In submitting the plan of
   conversion to the shareholders for their approval, the board of directors
   shall recommend that the shareholders approve the plan unless the board of
   directors makes a determination that because of conflicts of interest or other
   special circumstances it should not make such a recommendation, in which case
   the board of directors shall inform the shareholders of the basis for that
   determination.

   3. The board of directors may set conditions for approval of the plan of
   conversion by the shareholders or the effectiveness of the plan of conversion.

   4. If the approval of the shareholders is to be sought at a shareholders
   meeting, the corporation shall notify each shareholder, regardless of whether
   entitled to vote, of the meeting of shareholders at which the plan of
   conversion is to be submitted for approval. The notice shall state that the
   purpose, or one of the purposes, of the meeting is to consider the plan of
   conversion and shall contain or be accompanied by a copy or summary of the
   plan. The notice must include or be accompanied by a copy of the organic rules
   of the converted entity, which are to be in writing as they will be in effect
   immediately after the conversion.

   5. Unless the articles of incorporation or the board of directors acting
   pursuant to subdivision 3, requires a greater vote, approval of the plan of
   conversion requires (i) the approval of the shareholders at a meeting at which
   a quorum exists consisting of more than two thirds of the votes entitled to be
   cast on the plan and (ii) the approval of each class or series of shares
   voting as a separate voting group at a meeting at which a quorum of the voting
   group exists consisting of more than two thirds of the votes entitled to be
   cast on the plan by that voting group. The articles of incorporation may
   provide for a greater or lesser vote than that provided in this subsection or
   a vote by separate voting groups so long as the vote provided for is not less
   than a majority of all votes cast on the plan by each voting group entitled to
   vote on the plan at a meeting at which a quorum of the voting group exists.

B. In the case of a conversion of a domestic eligible entity to a domestic
corporation, the plan of conversion shall be adopted in accordance with
subsection B of &#xA7; 13.1-722.9.

C. If as a result of the conversion one or more shareholders of the converting
domestic corporation would become subject to interest holder liability, approval
of the plan of conversion shall require the signing in connection with the
transaction, by each such shareholder, of a separate written consent to become
subject to such interest holder liability.

HISTORY: 2001, c. 545; 2002, c. 1; 2012, c. 130; 2016, c. 288; 2019, c. 734;
2020, c. 1226.