                                 CODE OF VIRGINIA

CONVERSION INTO NONPROFESSIONAL CORPORATION; DISPOSITION OF SHARES OF DECEASED
OR DISQUALIFIED SHAREHOLDERS (§ 13.1-552)

A. A corporation under this chapter shall have perpetual existence until its
corporate existence is terminated in accordance with other provisions of this
title.

B. Whenever all shareholders of a corporation licensed under this chapter cease
at any one time and for any reason to be licensed, certified or registered in
the particular field of endeavor for which the corporation was organized, or by
the vote of the holders of at least two-thirds of its outstanding capital stock,
the corporation thereupon shall be treated as converted into, and shall operate
henceforth solely as, a corporation under applicable provisions of this title,
exclusive of this chapter, but may be reconverted upon removal of the disability
or by the vote of the holders of at least two-thirds of its outstanding capital
stock.

C. Within one year following the date of death of a shareholder, or his
disqualification as hereinbefore provided, all of the shares of such
shareholders shall be transferred to, and acquired by, the corporation or
persons qualified to own the shares, if the provisions of subsection B are
inapplicable. If no other provision to accomplish this transfer and acquisition
is in effect and carried out within this period, the corporation thereafter
shall purchase and redeem all of the decedent shareholder&#8217;s shares of
stock at book value, determined as of the end of the month immediately preceding
death or disqualification. The book value shall be determined from the books and
records of the corporation in accordance with the generally accepted accounting
principles on the accrual method of accounting. No subsequent adjustment of this
book value, whether by the corporation itself, by federal income tax audit made
and agreed to, or by a court decision which has become final, shall alter the
redemption price. Nothing contained in this section shall prevent the parties
involved from making any other arrangement or provision in the corporate
articles, bylaws, or by contract to transfer the shares of a (i) deceased or
disqualified shareholder or (ii) disqualified charitable remainder trust to the
corporation or to persons qualified to own the shares, whether made before or
after (i) the death or disqualification of the shareholder or (ii) the
disqualification of a charitable remainder trust, provided that within the
one-year period herein specified all the stock involved shall have been so
transferred.

HISTORY: 1970, c. 77; 1999, c. 100; 2002, c. 77.