CHAPTER 109

An Act to amend and reenact § 13.1-77, as amended, of the Code of
Virginia, relating to sale, mortgage or other disposition of assets of
stock corporations.
Be it enacted by the General Assembly of Virginia:
1. That § 138.1-77, as amended, of the Code of Virginia be amended and
reenacted as follows:

§ 13.1-77. Sale, mortgage or other disposition of assets.—The sale,
lease, exchange, mortgage, pledge or other disposition of all, or substan-
tially all, the property and assets of a corporation, when made in the
usual and regular course of the business of the corporation, may be made
upon such terms and conditions and for such consideration, which may
consist in whole or in part of money or property, real or personal, in-
cluding shares of any other corporation, domestic or foreign, as shall
be authorized by its board of directors; and in such case no authorization
or consent of the stockholders shall be required.

Unless otherwise provided in the articles of incorporation, a mort-
gage or pledge of all or any part of the property and assets, with or
without the good will, of a corporation, though not made in the usual
and regular course of its business, may be made to borrow money upon
such terms and conditions as shall be authorized by its board of directors
and no authorization or consent of stockholders shall be required.

A sale, lease or exchange, or a mortgage or pledge for a consideration
other than money, of all, or substantially all, the property and assets,
with or without the good will, of a corporation, if not made in the usual
and regular course of its business, may be made upon such terms and
conditions and for such consideration, which may consist in whole or in
part of money or property, real or personal, including shares of any
other corporation, domestic or foreign, as may be authorized in the fol-
lowing manner:

(a) The board of directors shall adopt a resolution recommending
such sale, lease, exchange, mortgage, pledge or other disposition and
directing the submission thereof to a vote at a meeting of stockholders,
which may be either an annual or a special meeting.

(b) Notice shall be given to each stockholder of record in the
manner provided in this Act for the giving of notice of meetings of
stockholders not less than twenty-five nor more than fifty days before
the date of the meeting, and shall state that the purpose, or one of the
purposes, of such meeting is to consider the proposed sale, lease, exchange,
mortgage, pledge or other disposition.

(c) At such meeting the stockholders may authorize such sale, lease,
exchange, mortgage, pledge or other disposition and may fix, or may
authorize the board of directors to fix, any or all of the terms and con-
ditions thereof and the consideration to be received by the corporation
therefor. The holder of each outstanding share of the corporation shall
be entitled to vote thereon. whether or not entitled to vote thereon by
the provisions of the articles of incorporation. Such authorization shall
require the affirmative vote of the holders of more than two-thirds of
the outstanding shares of the corporation, unless any class of shares is
entitled by the articles of incorporation to vote as a class thereon, in
which event such authorization shall require the affirmative vote of the
holders of that proportion of the outstanding shares of each class of
shares entitled to vote as a class thereon which is specified in the articles
of incorporation and of the holders of more than two-thirds of the total
outstanding shares.

(d) After such authorization by a vote of stockholders. the board of
directors nevertheless, in its discretion, may abandon such sale, lease,
exchange, mortgage, pledge or other disposition of assets, subiect to the
richts of third parties under any contracts relating thereto, without fur-
ther action or approval by stockholders.

Notwithstanding any other provision of this section, no corporation
organized to conduct the business of a railroad or other public service or
a banking business or a building and loan association, an industrial loan
association or a credit union may sell, lease or exchange its properties for
the conduct of such business in this State except to a corporation of
State organized for the same purpose or in the case of a banking business,
to a corporation of the United States.

Any transaction authorized and consummated pursuant to this sec-
tion shall not be considered to be a merger or a consolidation within the
terms of any other section of this act, and the rights of stockholders of
all corporations involved in the transaction shall be governed by § 138.1-78
and in no event by § 18.1-75.