                                 CODE OF VIRGINIA

MEMBER OR DIRECTOR AGREEMENTS (§ 13.1-852.1)

A. An agreement among the members or the directors of a corporation that
complies with this section is effective among the members or directors 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 A of &#xA7; 13.1-872, one or more officers, or restricts the
   discretion or powers of the board of directors or any one or more officers;

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

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

   4. 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
   member, director, officer or employee of the corporation, or among any of
   them;

   5. Transfers to one or more members, directors 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 members;

   6. Requires dissolution of the corporation at the request of one or more of
   the members, or directors, in the case of a corporation that has no members or
   in which the members have no voting rights, or upon the occurrence of a
   specified event or contingency; or

   7. Otherwise governs the exercise of the corporate powers or the management of
   the business and affairs of the corporation or the relationship among the
   members, 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. a. Set forth in the articles of incorporation or bylaws and approved by all
   persons who are members or, if there are no members or the corporation&#8217;s
   members do not have voting rights, by all persons who are directors at the
   time of the agreement; or
   				b. Set forth in a written agreement that is signed by all persons who are
   members or, if there are no members or the corporation&#8217;s members do not
   have voting rights, by all persons who are directors at the time of the
   agreement;

   2. Subject to amendment only by all persons who are members or, if the
   corporation&#8217;s members do not have voting rights, by all persons who are
   directors at the time of the amendment, unless the agreement provides
   otherwise; and

   3. Valid for an unlimited duration, if the agreement is set forth in the
   articles of incorporation or bylaws, unless the agreement shall be otherwise
   amended by the members or the directors, as the case may be; or if the
   agreement is set forth in a written agreement, 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.

C. The existence of an agreement authorized by this section shall be noted
conspicuously on the front or back of each certificate evidencing membership, if
any. The failure to note the existence of the agreement on the certificate shall
not affect the validity of the agreement or any action taken pursuant to it.

D. An agreement authorized by this section shall cease to be effective when the
corporation has more than 300 members of record. 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 to the articles of incorporation or bylaws, without
member 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 member 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 a failure to observe the
corporate formalities otherwise applicable to the matters governed by the
agreement.

G. Incorporators or subscribers for membership interests may act as members or
directors with respect to an agreement authorized by this section if no members
have been elected or appointed or, in the case of a corporation that has no
members, no directors are elected or holding office when the agreement was 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. An agreement among the members or the directors 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 members,
the directors, and the corporation.

HISTORY: 1991, c. 132; 1997, c. 217; 2007, c. 925; 2015, c. 611.