13.1-717 - Share exchange.
§ 13.1-717. Share exchange.
A. Through a share exchange:
1. A domestic corporation may acquire all of the shares of one or moreclasses or series of shares of another domestic or foreign corporation, orall of the eligible interests of one or more classes or series of eligibleinterests of a domestic or foreign eligible entity, as well as rights toacquire any such shares or eligible interests, in exchange for shares orother securities, eligible interests, obligations, rights to acquire shares,other securities or eligible interests, cash, other property or anycombination of the foregoing, pursuant to a plan of share exchange; or
2. All of the shares of one or more classes or series of shares of a domesticcorporation, as well as rights to acquire any such shares or eligibleinterests, may be acquired by another domestic or foreign corporation orother eligible entity, in exchange for shares or other securities, eligibleinterests, obligations, rights to acquire shares, other securities oreligible interests, cash, other property or any combination of the foregoing,pursuant to a plan of share exchange.
B. A foreign corporation or eligible entity may be a party to a shareexchange only if the share exchange is permitted by the laws under which thecorporation or eligible entity is organized or by which it is governed.
C. If the organic law of a domestic eligible entity does not provideprocedures for the approval of a share exchange, a plan of share exchange maybe adopted and approved, and the share exchange effectuated, in accordancewith the procedures, if any, for a merger.
D. The plan of share exchange shall include:
1. The name of each domestic or foreign corporation or eligible entity whoseshares or eligible interests will be acquired and the name of the domestic orforeign corporation or other eligible entity that will acquire those sharesor eligible interests;
2. The terms and conditions of the share exchange;
3. The manner and basis of exchanging shares of a domestic or foreigncorporation or eligible interests in an eligible entity whose shares oreligible interests will be acquired under the share exchange into shares orother securities, eligible interests, obligations, rights to acquire shares,other securities or eligible interests, cash, other property or anycombination of the foregoing;
4. The manner and basis for exchanging any rights to acquire shares of adomestic or foreign corporation or eligible interests in an eligible entitywhose shares or eligible interests will be acquired under the share exchangeinto shares or other securities, eligible interests, obligations, rights toacquire shares, other securities or eligible interests, cash, other propertyor any combination of the foregoing; and
5. Any other provisions required by the laws under which any party to theshare exchange is organized or by the articles of incorporation or organicdocument of any such party.
E. Terms of a plan of share exchange may be made dependent on factsobjectively ascertainable outside the plan in accordance with subsection L of§ 13.1-604.
F. The plan of share exchange may also include a provision that the plan maybe amended prior to the effective date of the certificate of share exchange,but if the shareholders of a domestic corporation that is a party to theshare exchange are required or permitted to vote on the plan, the plan mustprovide that subsequent to approval of the plan by such shareholders the planmay not be amended to change:
1. The amount or kind of shares or other securities, eligible interests,obligations, rights to acquire shares, other securities or eligibleinterests, cash, or other property or any combination of the foregoing to beissued by the corporation or to be received under the plan by theshareholders of or owners of eligible interests in any party to the shareexchange; or
2. Any of the other terms or conditions of the plan if the change wouldadversely affect such shareholders in any material respect.
G. This section does not limit the power of a domestic corporation to acquireshares of another domestic or foreign corporation or eligible interests in aneligible entity in a transaction other than a share exchange.
(Code 1950, § 13.1-69.1; 1975, c. 500; 1980, c. 90; 1985, c. 522; 2005, c.765.)