                                 CODE OF VIRGINIA

SHAREHOLDER AGREEMENTS (§ 13.1-671.1)

A. An agreement among the shareholders of a corporation that complies with this
section is effective among the shareholders and the corporation, even though it
is inconsistent with one or more other provisions of this chapter in that it:

   1. Eliminates the board of directors or, subject to the requirements of
   subsection D of &#xA7; 13.1-647 and subsection A of &#xA7; 13.1-693, one or
   more officers or restricts the discretion or powers of the board of directors;

   2. Governs the authorization or making of distributions, regardless of whether
   they are in proportion to ownership of shares, subject to the limitations in
   &#xA7; 13.1-653;

   3. Establishes who shall be directors or officers of the corporation, or their
   terms of office or manner of selection or removal;

   4. Governs, in general or in regard to specific matters, the exercise or
   division of voting power by or between the shareholders and directors or by or
   among any of them, including use of weighted voting rights or director
   proxies;

   5. Establishes the terms and conditions of any agreement for the transfer or
   use of property or the provision of services between the corporation and any
   shareholder, director, officer or employee of the corporation or among any of
   them;

   6. Transfers to one or more shareholders or other persons all or part of the
   authority to exercise the corporate powers or to manage the business and
   affairs of the corporation, including the resolution of any issue about which
   there exists a deadlock among directors or shareholders;

   7. Requires dissolution of the corporation at the request of one or more of
   the shareholders or upon the occurrence of a specified event or contingency;
   or

   8. Otherwise governs the exercise of the corporate powers or the management of
   the business and affairs of the corporation or the relationship among the
   shareholders, the directors and the corporation, or among any of them, and is
   not contrary to public policy.

B. An agreement authorized by this section shall be:

   1. As set forth (i) in the articles of incorporation or bylaws and approved by
   all persons who are shareholders at the time of the agreement or (ii) in a
   written agreement that is signed by all persons who are shareholders at the
   time of the agreement and is made known to the corporation; and

   2. Subject to amendment only by all persons who are shareholders at the time
   of the amendment, unless the agreement provides otherwise.

C. The existence of an agreement authorized by this section shall be noted
conspicuously on the front or back of each certificate for outstanding shares or
on the information statement required by subsection B of &#xA7; 13.1-648. If at
the time of the agreement the corporation has shares outstanding represented by
certificates, the corporation shall recall the outstanding certificates and
issue substitute certificates that comply with this subsection. The failure to
note the existence of the agreement on the certificate or information statement
shall not affect the validity of the agreement or any action taken pursuant to
it. Any purchaser of shares who, at the time of purchase, did not have knowledge
of the existence of the agreement shall be entitled to rescission of the
purchase. A purchaser shall be deemed to have knowledge of the existence of the
agreement if its existence is noted on the certificate or information statement
for the shares in compliance with this subsection and, if the shares are not
represented by a certificate, the information statement is delivered to the
purchaser at or before the time of purchase of the shares. An action to enforce
the right of rescission authorized by this subsection must be commenced within
the earlier of 90 days after discovery of the existence of the agreement or two
years after the time of purchase of the shares.

D. An agreement authorized by this section shall cease to be effective when the
corporation becomes a public corporation. If the agreement ceases to be
effective for any reason, the board of directors may, if the agreement is
contained or referred to in the corporation&#8217;s articles of incorporation or
bylaws, adopt an amendment of the articles of incorporation or bylaws, without
shareholder action, to delete the agreement and any references to it.

E. An agreement authorized by this section that limits the discretion or powers
of the board of directors shall relieve the directors of, and impose upon the
person or persons in whom such discretion or powers are vested, liability for
acts or omissions imposed by law on directors to the extent that the discretion
or powers of the directors are limited by the agreement.

F. The existence or performance of an agreement authorized by this section shall
not be a ground for imposing personal liability on any shareholder for the acts
or debts of the corporation even if the agreement or its performance treats the
corporation as if it were a partnership or results in failure to observe the
corporate formalities otherwise applicable to the matters governed by the
agreement.

G. Incorporators or subscribers for shares may act as shareholders with respect
to an agreement authorized by this section if no shares have been issued when
the agreement is made.

H. No action taken pursuant to this section shall change any requirement to file
articles or other documents with the Commission or affect the rights of any
creditors or other third parties.

I. Limits, if any, on the duration of an agreement authorized by this section
shall be as set forth in the agreement, except that the duration of an agreement
that became effective prior to July 1, 2015, remains 10 years unless the
agreement provided otherwise or is subsequently amended to provide otherwise.

J. An agreement among shareholders of a corporation that is consistent with the
other provisions of this chapter that does not comply with the provisions of
this section shall nonetheless be effective among the shareholders and the
corporation.

HISTORY: 1990, c. 337; 1997, c. 226; 2005, c. 765; 2015, c. 611; 2019, c. 734.