                                 CODE OF VIRGINIA

SHAREHOLDERS&#8217; PREEMPTIVE RIGHTS (§ 13.1-651)

A. Unless limited or denied in the articles of incorporation and subject to the
limitations in subsection C, 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&#8217;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, do not have
a preemptive right to acquire the corporation&#8217;s unissued shares.

C. Except to the extent that the articles of incorporation expressly provide
otherwise, when there are preemptive rights, the following apply:

   1. The shareholders of the corporation 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&#8217;s unissued shares upon the decision of the
   board of directors to issue them.

   2. A shareholder may waive the shareholder&#8217;s preemptive right. A waiver
   evidenced by a writing is irrevocable even though it is not supported by
   consideration.

   3. There is no preemptive right with respect to:
   				a. Shares issued as compensation to officers, employees, or agents of the
   corporation, its subsidiaries, or affiliates;
   				b. Shares issued to satisfy conversion or option rights created to provide
   compensation to directors, officers, employees, or agents of the corporation,
   its subsidiaries, or affiliates;
   				c. Shares that are issued within six months from the effective date of the
   certificate of incorporation; or
   				d. Shares issued for consideration other than for cash.

   4. Holders of shares of any class with preferential rights to distributions
   have no preemptive rights with respect to shares of any other class.

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

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

   7. 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&#8217; preemptive rights.

D. For purposes of this section, &#8220;shares&#8221; includes any warrants,
rights, or options to acquire any shares or any security or other obligation of
the corporation convertible into or carrying a right to subscribe for or acquire
any such shares or 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; 2019, c. 734.