BUSINESS CORPORATION ACT PART 4.
BUSINESS CORPORATION ACT
PART 4.
Art. 4.01. RIGHT TO AMEND ARTICLES OF INCORPORATION. A. A
corporation may amend its articles of incorporation, from time to
time, in any and as many respects as may be desired, so long as its
articles of incorporation as amended contain only such provisions
as might be lawfully contained in original articles of
incorporation at the time of making such amendment, and, if a change
in shares or the rights of shareholders, or an exchange,
reclassification, subdivision, combination, or cancellation of
shares or rights of shareholders is to be made, such provisions as
may be necessary to effect such change, exchange, reclassification,
subdivision, combination, or cancellation.
B. A shareholder of the corporation does not have a vested
property right resulting from any provision in the articles of
incorporation, including provisions relating to management,
control, capital structure, dividend entitlement, or purpose or
duration of the corporation.
C. Repealed by Acts 1975, 64th Leg., p. 322, ch. 134, Sec. 22,
eff. Sept. 1, 1975.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1973, 63rd Leg., p. 1504, ch. 545, Sec. 29, eff. Aug. 27, 1973;
Acts 1975, 64th Leg., p. 316, ch. 134, Sec. 14, 22, eff. Sept. 1,
1975; Acts 1981, 67th Leg., p. 3115, ch. 818, Sec. 6, eff. Aug. 31,
1981; Acts 1991, 72nd Leg., ch. 901, Sec. 20, eff. Aug. 26, 1991.
Sec. A amended by Acts 2003, 78th Leg., ch. 238, Sec. 21, eff. Sept.
1, 2003.
Art. 4.02. PROCEDURE TO AMEND ARTICLES OF INCORPORATION. A.
The articles of incorporation may be amended in the following
manner:
(1) The board of directors shall adopt a resolution setting
forth the proposed amendment and, unless the amendment is
undertaken under authority granted to the board of directors in the
articles of incorporation in accordance with Article 2.13 of this
Act, if shares have been issued, directing that it be submitted to a
vote at a meeting of shareholders, which may be either an annual or
a special meeting. If no shares have been issued, the amendment
shall be adopted by resolution of the board of directors and the
provisions for adoption by shareholders shall not apply. The
resolution may incorporate the proposed amendment in restated
articles of incorporation which contain a statement that except for
the designated amendment the restated articles of incorporation
correctly set forth without change the corresponding provisions of
the articles of incorporation as heretofore amended, and that the
restated articles of incorporation together with the designated
amendment supersede the original articles of incorporation and all
amendments thereto.
(2) Written or printed notice setting forth the proposed
amendment or a summary of the changes to be effected thereby shall
be given to each shareholder of record entitled to vote thereon
within the time and in the manner provided in this Act for the
giving of notice of meetings of shareholders. If the meeting be an
annual meeting, the proposed amendment or such summary may be
included in the notice of such annual meeting.
(3) At such meeting a vote of the shareholders entitled to
vote thereon shall be taken on the proposed amendment. The proposed
amendment shall be adopted upon receiving the affirmative vote of
the holders of at least two-thirds of the outstanding shares
entitled to vote thereon, unless any class or series of shares is
entitled to vote thereon as a class, in which event the proposed
amendment shall be adopted upon receiving the affirmative vote of
the holders of at least two-thirds of the shares within each class
or series of outstanding shares entitled to vote thereon as a class
and of at least two-thirds of the total outstanding shares entitled
to vote thereon.
(4) The resolution authorizing a proposed amendment to the
articles of incorporation may provide that at any time before the
filing of the amendment with the secretary of state is effective,
notwithstanding authorization of the proposed amendment by the
shareholders of the corporation, the board of directors may abandon
the proposed amendment without further action by the shareholders.
B. Any number of amendments may be submitted to the
shareholders, and voted upon by them, at one meeting.
C. Repealed by Acts 1973, 63rd Leg., p. 1507, ch. 545, Sec.
32, eff. Aug. 27, 1973.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1967, 60th Leg., p. 1719, ch. 657, Sec. 7, eff. June 17, 1967;
Acts 1973, 63rd Leg., p. 1505, ch. 545, Sec. 30, 32, eff. Aug. 27,
1973; Acts 1991, 72nd Leg., ch. 901, Sec. 21, eff. Aug. 26, 1991.
Sec. A amended by Acts 2003, 78th Leg., ch. 238, Sec. 22, eff. Sept.
1, 2003.
Art. 4.03. CLASS VOTING ON AMENDMENTS. A. The holders of the
outstanding shares of a class shall be entitled to vote as a class
upon a proposed amendment, and the holders of the outstanding
shares of a series shall be entitled to vote as a class upon a
proposed amendment, whether or not entitled to vote thereon by the
provisions of the articles of incorporation, if the amendment would
accomplish any of the following, unless the amendment is undertaken
pursuant to authority granted to the board of directors in the
articles of incorporation in accordance with Article 2.13 of this
Act:
(1) Increase or decrease the aggregate number of authorized
shares of such class or series.
(2) Increase or decrease the par value of the shares of such
class, including changing shares having a par value into shares
without par value, or shares without par value into shares with par
value.
(3) Effect an exchange, reclassification, or cancellation of
all or part of the shares of such class or series.
(4) Effect an exchange, or create a right of exchange, of all
or any part of the shares of another class into the shares of such
class or series.
(5) Change the designations, preferences, limitations, or
relative rights of the shares of such class or series.
(6) Change the shares of such class or series, whether with or
without par value, into the same or a different number of shares,
either with or without par value, of the same class or series or
another class or series.
(7) Create a new class or series of shares having rights and
preferences equal, prior, or superior to the shares of such class or
series, or increase the rights and preferences of any class or
series having rights and preferences equal, prior, or superior to
the shares of such class or series, or increase the rights and
preferences of any class or series having rights or preferences
later or inferior to the shares of such class or series in such a
manner as to become equal, prior, or superior to the shares of such
class or series.
(8) Divide the shares of such class into series and fix and
determine the designation of such series and the variations in the
relative rights and preferences between the shares of such series.
(9) Limit or deny the existing preemptive rights of the
shares of such class or series.
(10) Cancel or otherwise affect dividends on the shares of
such class or series which had accrued but had not been declared.
(11) Include in or delete from the articles of incorporation
any provisions required or permitted to be included in the articles
of incorporation of a close corporation in conformance with Part
Twelve of this Act.
B. Unless otherwise provided in a corporation's articles of
incorporation, if the holders of the outstanding shares of a class
that is divided into series are entitled to vote as a class on a
proposed amendment and the amendment would affect all series of
such class (other than any series of which no shares are outstanding
or any series that is not affected by the amendment) equally, than
the holders of the separate series shall not be entitled to separate
class votes.
C. Unless otherwise provided in a corporation's articles of
incorporation, the approval of a proposed amendment to the
corporation's articles of incorporation that would solely effect
changes in the designations, preferences, limitations, and
relative rights, including voting rights, of one or more series of
shares of the corporation that have been established pursuant to
the authority granted the board of directors in the articles of
incorporation in accordance with Article 2.13 of this Act shall not
require the approval of the holders of the outstanding shares of any
class or series other than such series if the preferences,
limitations and relative rights of such series after giving effect
to such amendment and of any series that may be established as a
result of a reclassification of such series are, in each case,
within those permitted to be fixed and determined by the board of
directors with respect to the establishment of any new series of
shares pursuant to the authority granted the board of directors in
the articles of incorporation in accordance with Article 2.13 of
this Act.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1958. Amended by
Acts 1967, 60th Leg., p. 1758, ch. 663, Sec. 1, eff. June 17, 1967;
Acts 1973, 63rd Leg., p. 1506, ch. 545, Sec. 31, 32, eff. Aug. 27,
1973; Acts 1975, 64th Leg., p. 318, ch. 134, Sec. 15, eff. Sept. 1,
1975; Acts 1981, 67th Leg., p. 3117, ch. 818, Sec. 7, eff. Aug. 31,
1981; Acts 1985, 69th Leg., ch. 128, Sec. 12, eff. May 20, 1985;
Acts 1991, 72nd Leg., ch. 901, Sec. 22, eff. Aug. 26, 1991; Acts
1997, 75th Leg., ch. 375, Sec. 22, eff. Sept. 1, 1997.
Art. 4.04. ARTICLES OF AMENDMENT. A. The articles of
amendment shall be executed on behalf of the corporation by an
officer. If no shares have been issued, however, and the articles
of amendment are adopted by the board of directors, the articles of
amendment may be executed on behalf of the corporation by a majority
of the directors.
B. The articles of amendment shall set forth:
(1) The name of the corporation.
(2) If the amendment alters any provision of the
original or amended articles of incorporation, an identification by
reference or description of the altered provision and a statement
of its text as it is amended to read. If the amendment is an
addition to the original or amended articles of incorporation, a
statement of that fact and the full text of each provision added.
(3) A statement that the amendment has been approved
in the manner required by this Act and the constituent documents of
the corporation.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1967, 60th Leg., p. 1719, ch. 657, Sec. 8, eff. June 17, 1967;
Acts 1973, 63rd Leg., p. 1507, ch. 545, Sec. 33, 34, eff. Aug. 27,
1973; Acts 1979, 66th Leg., p. 224, ch. 120, Sec. 29, eff. May 9,
1979; Acts 1981, 67th Leg., p. 839, ch. 297, Sec. 15, eff. Aug. 31,
1981; Acts 1985, 69th Leg., ch. 128, Sec. 13, eff. May 20, 1985;
Acts 1991, 72nd Leg., ch. 901, Sec. 23, eff. Aug. 26, 1991.
Sec. B amended by Acts 2003, 78th Leg., ch. 238, Sec. 23, eff. Sept.
1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 67, Sec. 8, eff. September 1, 2005.
Art. 4.05. FILING OF ARTICLES OF AMENDMENT. A. The original
and a copy of the articles of amendment shall be delivered to the
Secretary of State. If the Secretary of State finds that the
articles of amendment conform to law, he shall, when the
appropriate filing fee is paid as required by law:
(1) Endorse on the original and the copy the word "Filed" and
the month, day, and year of the filing thereof.
(2) File the original in his office.
(3) Issue a certificate of amendment to which he shall affix
the copy.
B. The certificate of amendment, together with the copy of
the articles of amendment affixed thereto by the Secretary of
State, shall be delivered to the corporation or its representative.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1979, 66th Leg., p. 225, ch. 120, Sec. 30, eff. May 9, 1979;
Acts 1981, 67th Leg., p. 840, ch. 297, Sec. 16, eff. Aug. 31, 1981.
Art. 4.06. EFFECT OF CERTIFICATE OF AMENDMENT. A. Upon the
issuance of the certificate of amendment by the Secretary of State,
the amendment shall become effective and the articles of
incorporation shall be deemed to be amended accordingly.
B. No amendment shall affect any existing cause of action in
favor of or against such corporation, or any pending suit to which
such corporation shall be a party, or the existing rights of persons
other than shareholders; and, in the event the corporate name shall
be changed by amendment, no suit brought by or against such
corporation under its former name shall abate for that reason.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955.
Art. 4.07. RESTATED ARTICLES OF INCORPORATION. A. A
corporation may, by following the procedure to amend the articles
of incorporation provided by this Act (except that no shareholder
approval shall be required where no amendment is made), authorize,
execute, and file restated articles of incorporation which may
restate either:
(1) The entire text of the articles of incorporation as
amended or supplemented by all certificates of amendment previously
issued by the Secretary of State; or
(2) The entire text of the articles of incorporation as
amended or supplemented by all certificates of amendment previously
issued by the Secretary of State, and as further amended by such
restated articles of incorporation.
B. If the restated articles of incorporation restate the
entire articles of incorporation as amended and supplemented by all
certificates of amendments previously issued by the Secretary of
State, without making any further amendment thereof, the
introductory paragraph shall contain a statement that the
instrument accurately copies the articles of incorporation and all
amendments thereto that are in effect to date and that the
instrument contains no change in any provision thereof; provided
that the number of directors then constituting the board of
directors and the names and addresses of the persons then serving as
directors may be inserted in lieu of similar information concerning
the initial board of directors, and the name and address of each
incorporator may be omitted.
C. If the restated articles of incorporation restate the
entire articles of incorporation as amended and supplemented by all
certificates of amendments previously issued by the Secretary of
State, and as further amended by such restated articles of
incorporation, the instrument containing such articles shall:
(1) Set forth, for any amendment made by such restated
articles of incorporation, a statement that each such amendment has
been effected in conformity with the provisions of this Act, and
shall further set forth the statements required by this Act to be
contained in articles of amendment.
(2) Contains a statement that the instrument accurately
copies the articles of incorporation and all amendments thereto
that are in effect to date and as further amended by such restated
articles of incorporation and that the instrument contains no other
change in any provision thereof; provided that the number of
directors then constituting the board of directors and the names
and addresses of the persons then serving as directors may be
inserted in lieu of similar information concerning the initial
board of directors, and the names and addresses of each
incorporator may be omitted.
(3) Restate the text of the entire articles of incorporation
as amended and supplemented by all certificates of amendment
previously issued by the Secretary of State and as further amended
by the restated articles of incorporation.
D. Such restated articles of incorporation shall be executed
on behalf of the corporation by an officer. If no shares have been
issued, however, and the restated articles of incorporation are
adopted by the board of directors, the restated articles of
incorporation may be executed on behalf of the corporation by a
majority of the directors. The original and a copy of the restated
articles of incorporation shall be delivered to the Secretary of
State. If the Secretary of State finds that the restated articles
of incorporation conform to law, he shall, when the appropriate
filing fee is paid as required by law:
(1) Endorse on the original and the copy the word "Filed," and
the month, day, and year of the filing thereof.
(2) File the original in his office.
(3) Issue a restated certificate of incorporation to which he
shall affix the copy.
E. The restated certificate of incorporation, together with
the copy of the restated articles of incorporation affixed thereto
by the Secretary of State, shall be delivered to the corporation or
its representative.
F. Upon the issuance of the restated certificate of
incorporation by the Secretary of State, the original articles of
incorporation and all amendments thereto shall be superseded and
the restated articles of incorporation shall be deemed to be the
articles of incorporation of the corporation.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1957, 55th Leg., p. 111, ch. 54, Sec. 7; Acts 1973, 63rd Leg.,
p. 1507, ch. 545, Sec. 35, eff. Aug. 27, 1973; Acts 1979, 66th Leg.,
p. 225, ch. 120, Sec. 31, eff. May 9, 1979; Acts 1981, 67th Leg., p.
840, ch. 297, Sec. 17, eff. Aug. 31, 1981; Acts 1985, 69th Leg., ch.
128, Sec. 14, eff. May 20, 1985; Acts 1987, 70th Leg., ch. 93, Sec.
20, eff. Aug. 31, 1987.
Art. 4.08. PROCEDURE FOR REDEMPTION. A. A corporation may at
any time, subject to Article 2.38 of this Act and to the provisions
of its articles of incorporation, proceed, by resolution of its
board of directors, to redeem any or all outstanding shares subject
to redemption. If less than all such shares are to be redeemed, the
shares to be redeemed shall be selected for redemption in
accordance with the provisions in the articles of incorporation,
or, in the absence of such provisions therein, may be selected
ratably or by lot in such manner as may be prescribed by resolution
of the board of directors. Such redemption shall be effected by
call and written or printed notice in the following manner:
(1) The notice of redemption of such shares shall set forth:
(a) The class or series of shares or part of any class or
series of shares to be redeemed.
(b) The date fixed for redemption.
(c) The redemptive price.
(d) The place at which the shareholders may obtain payment of
the redemptive price and, in the case of holders of certificated
shares, upon surrender of their respective share certificates.
(2) The notice shall be given to each holder of redeemable
shares being called, either personally or by mail, not less than
twenty (20) nor more than sixty (60) days before the date fixed for
redemption. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail addressed to the
shareholder at his address as it appears on the stock transfer book
of the corporation, with postage thereon prepaid.
B. A corporation may, on or prior to the date fixed for
redemption of redeemable shares, deposit with any bank or trust
company in this State, or any bank or trust company in the United
States duly appointed and acting as transfer agent for such
corporation, as a trust fund, a sum sufficient to redeem shares
called for redemption, with irrevocable instructions and authority
to such bank or trust company to give or complete the notice of
redemption thereof and to pay, on or after the date fixed for such
redemption, to the respective holders of shares, as evidenced by a
list of holders of such shares certified by an officer of the
corporation, the redemptive price upon the surrender of their
respective share certificates. From and after the date fixed for
redemption, such shares shall be deemed to be redeemed and
dividends thereon shall cease to accrue. Such deposit shall be
deemed to constitute full payment of such shares to their holders.
From and after the date such deposit is made and such instructions
are given, such shares shall no longer be deemed to be outstanding,
and the holders thereof shall cease to be shareholders with respect
to such shares, and shall have no rights with respect thereto except
the right to receive from the bank or trust company payment of the
redemptive price of such shares without interest and, in the case of
holders of certificated shares, upon the surrender of their
respective certificates therefor, and any right to convert such
shares which may exist. In case the holders of such shares shall
not, within six (6) years after such deposit, claim the amount
deposited for redemption thereof, such bank or trust company shall
upon demand pay over to the corporation the balance of such amount
so deposited to be held in trust and such bank or trust company
shall thereupon be relieved of all responsibility to the holders
thereof.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1983, 68th Leg., p. 2567, ch. 442, Sec. 6, eff. Sept. 1, 1983;
Acts 1987, 70th Leg., ch. 93, Sec. 21, eff. Aug. 31, 1987; Acts
1989, 71st Leg., ch. 801, Sec. 24, eff. Aug. 28, 1989.
Art. 4.10. REDUCTION OF STATED CAPITAL BY REDEMPTION OR
PURCHASE OF REDEEMABLE SHARES. A. When redeemable shares of a
corporation are redeemed or purchased by the corporation, the
redemption or purchase shall effect a cancellation of such shares.
Thereupon such shares shall be restored to the status of authorized
but unissued shares, unless the articles of incorporation provide
that such shares when redeemed or purchased shall not be reissued,
in which case the number of shares of the class so cancelled which
the corporation is authorized to issue shall be reduced by the
number of shares so cancelled. If the shares so redeemed and
purchased constitute all the outstanding shares of any particular
class of shares and if the articles of incorporation provide that
the shares of such class when redeemed and repurchased shall not be
reissued, the corporation may not issue any additional shares of
the class of shares.
B. Repealed by Acts 2003, 78th Leg., ch. 238, Sec. 44(3).
C. Repealed by Acts 2003, 78th Leg., ch. 238, Sec. 44(3).
D. The cancellation of shares under this article shall effect
a reduction of the stated capital of the corporation by an amount
equal to that part of the stated capital which was, at the time of
the cancellation, represented by the shares so cancelled.
E. Nothing contained in this Article shall be construed to
forbid a cancellation of shares or a reduction of stated capital in
any other manner permitted by law.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1979, 66th Leg., p. 226, ch. 120, Sec. 32, eff. May 9, 1979;
Acts 1981, 67th Leg., p. 840, ch. 297, Sec. 18, eff. Aug. 31, 1981;
Acts 1985, 69th Leg., ch. 128, Sec. 15, eff. May 20, 1985.
Sec. A amended by Acts 2003, 78th Leg., ch. 238, Sec. 24, eff. Sept.
1, 2003; Sec. B repealed by Acts 2003, 78th Leg., ch. 238, Sec.
44(3), eff. Sept. 1, 2003; Sec. C repealed by Acts 2003, 78th Leg.,
ch. 238, Sec. 44(3), eff. Sept. 1, 2003; Sec. D amended by Acts
2003, 78th Leg., ch. 238, Sec. 24, eff. Sept. 1, 2003.
Art. 4.11. CANCELLATION OF TREASURY SHARES. A. A corporation
may, at any time, by resolution of its board of directors, cancel
all or any part of its treasury shares.
B. Repealed by Acts 2003, 78th Leg., ch. 238, Sec. 44(4).
C. Repealed by Acts 2003, 78th Leg., ch. 238, Sec. 44(4).
D. Upon the cancellation of the treasury shares, the stated
capital of the corporation shall be deemed to be reduced by that
part of the stated capital which was, at the time of such
cancellation, represented by the shares so cancelled, and the
shares so cancelled shall be restored to the status of authorized
but unissued shares.
E. Nothing contained in this Article shall be construed to
forbid a cancellation of shares or a reduction of stated capital in
any other manner permitted by law.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1979, 66th Leg., p. 226, ch. 120, Sec. 33, eff. May 9, 1979;
Acts 1981, 67th Leg., p. 840, ch. 297, Sec. 19, eff. Aug. 31, 1981;
Acts 1985, 69th Leg., ch. 128, Sec. 16, eff. May 20, 1985; Acts
1989, 71st Leg., ch. 801, Sec. 25, eff. Aug. 28, 1989.
Sec. A amended by Acts 2003, 78th Leg., ch. 238, Sec. 25, eff. Sept.
1, 2003; Sec. B repealed by Acts 2003, 78th Leg., ch. 238, Sec.
44(4), eff. Sept. 1, 2003; Sec. C repealed by Acts 2003, 78th Leg.,
ch. 238, Sec. 44(4), eff. Sept. 1, 2003; Sec. D amended by Acts
2003, 78th Leg., ch. 238, Sec. 25, eff. Sept. 1, 2003.
Art. 4.12. REDUCTION OF STATED CAPITAL WITHOUT AMENDMENT OF
ARTICLES AND WITHOUT CANCELLATION OF SHARES. A. If all or part of
the stated capital of a corporation is represented by shares
without par value, the stated capital of the corporation may be
reduced in the following manner:
(1) The board of directors shall adopt a resolution setting
forth the amount of the proposed reduction and the manner in which
the reduction shall be effected, and directing that the question of
such reduction be submitted to a vote at a meeting of shareholders,
which may be either an annual or a special meeting.
(2) Written or printed notice, stating that the purpose or
one of the purposes of such meeting is to consider the question of
reducing the stated capital of the corporation in the amount and
manner proposed by the board of directors, shall be given to each
shareholder of record entitled to vote thereon within the time and
in the manner provided in this Act for the giving of notice of
meetings of shareholders.
(3) At the meeting for which such notice has been given, the
affirmative vote of the holders of at least a majority of the shares
entitled to vote on the question shall be required for approval of
the resolution proposing the reduction of stated capital.
B. Repealed by Acts 2003, 78th Leg., ch. 238, Sec. 44(5).
C. Repealed by Acts 2003, 78th Leg., ch. 238, Sec. 44(5).
D. Upon the approval of such resolution by the shareholders,
the stated capital of the corporation shall be reduced as therein
set forth.
E. No reduction of stated capital shall be made under the
provisions of this Article which would reduce the amount of the
aggregate stated capital of the corporation to an amount equal to or
less than the aggregate preferential amounts payable upon all
issued shares having a preferential right in the assets of the
corporation in the event of voluntary liquidation, plus the
aggregate par value of all issued shares having a par value but no
preferential right in the assets of the corporation in the event of
voluntary liquidation.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1975, 64th Leg., p. 319, ch. 134, Sec. 17, eff. Sept. 1, 1975;
Acts 1979, 66th Leg., p. 227, ch. 120, Sec. 34, eff. May 9, 1979;
Acts 1981, 67th Leg., p. 841, ch. 297, Sec. 20, eff. Aug. 31, 1981;
Acts 1985, 69th Leg., ch. 128, Sec. 17, eff. May 20, 1985.
Sec. B repealed by Acts 2003, 78th Leg., ch. 238, Sec. 44(5), eff.
Sept. 1, 2003; Sec. C repealed by Acts 2003, 78th Leg., ch. 238,
Sec. 44(5), eff. Sept. 1, 2003; Sec. D amended by Acts 2003, 78th
Leg., ch. 238, Sec. 26, eff. Sept. 1, 2003.
Art. 4.13. SPECIAL PROVISIONS RELATING TO SURPLUS AND
RESERVES. A corporation may, by resolution of its board of
directors, create a reserve or reserves out of its surplus or
designate or allocate any part or all of surplus in any manner for
any proper purpose or purposes, and may increase, decrease, or
abolish any such reserve, designation, or allocation in the same
manner.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1987, 70th Leg., ch. 93, Sec. 22, eff. Aug. 31, 1987.
Art. 4.14. REORGANIZATION UNDER A FEDERAL STATUTE; AMENDMENT
OF ARTICLES, MERGER, SHARE EXCHANGE, CONVERSION, AND DISSOLUTION
PURSUANT TO FEDERAL REORGANIZATION PROCEEDINGS. A. Authorization.
Notwithstanding any other provision of this Act to the contrary, a
trustee appointed for a corporation being reorganized under a
federal statute, the designated officers of the corporation, or any
other individual or individuals designated by the court to act on
behalf of the corporation may do any of the following without action
by or notice to its board of directors or shareholders in order to
carry out a plan of reorganization ordered or decreed by a court of
competent jurisdiction under the federal statute:
(1) amend or restate its articles of incorporation if the
articles after amendment or restatement contain only provisions
required or permitted in articles;
(2) merge or engage in a share exchange with one or more
domestic or foreign corporations or other entities pursuant to a
plan of merger or exchange having such terms and provisions as
required or permitted by Articles 5.01 and 5.02 of this Act;
(3) change the location of its registered office, change its
registered agent, and remove or appoint any agent to receive
service of process;
(4) alter, amend, or repeal its bylaws;
(5) constitute or reconstitute and classify or reclassify its
board of directors, and name, constitute, or appoint directors and
officers in place of or in addition to all or some of the officers or
directors then in place;
(6) sell, lease, exchange or otherwise dispose of all, or
substantially all, of its property and assets;
(7) authorize and fix the terms, manner, and conditions of
the issuance of bonds, debentures, or other obligations, whether or
not convertible into shares of any class or bearing warrants or
other evidences of optional rights to purchase or subscribe for any
shares of any class;
(8) dissolve; or
(9) effect a conversion.
Actions taken under Subsection (4) or (5) of this section are
effective on entry of the order or decree approving the plan of
reorganization or on another effective date as may be specified,
without further action of the corporation, as and to the extent set
forth in the plan of reorganization or the order or decree approving
the plan of reorganization.
B. Authority to Sign Documents. A trustee appointed for a
corporation being reorganized under a federal statute, the
designated officers of the corporation, or any other individual or
individuals designated by the court may sign on behalf of a
corporation that is being reorganized:
(1) articles of amendment or restated articles of
incorporation setting forth:
(a) the name of the corporation;
(b) the text of each amendment or the restatement approved by
the court;
(c) the date of the court's order or decree approving the
articles of amendment or restatement;
(d) the court, file name, and case number of the
reorganization case in which the order or decree was entered; and
(e) a statement that the court had jurisdiction of the case
under federal statute; or
(2) articles of merger or exchange setting forth:
(a) the name of the corporation;
(b) the text of the part of the plan of reorganization that
contains the plan of merger or exchange approved by the court, which
shall include the information required by Article 5.04A or 5.16B of
this Act, as applicable, but need not include the resolution of the
board of directors referred to in Article 5.16B(3) of this Act;
(c) the date of the court's order or decree approving the plan
of merger or consolidation;
(d) the court, file name, and case number of the
reorganization case in which the order or decree was entered; and
(e) a statement that the court had jurisdiction of the case
under federal statute; or
(3) articles of dissolution setting forth:
(a) the name of the corporation;
(b) the information required by Articles 6.06A(1)(2) and (3)
of this Act;
(c) the date of the court's order or decree approving the
articles of dissolution;
(d) that the debts, obligations and liabilities of the
corporation have been paid or discharged as provided in the plan of
reorganization and that the remaining property and assets of the
corporation have been distributed as provided in the plan of
reorganization;
(e) the court, file name, and case number of the
reorganization case in which the order or decree was entered; and
(f) a statement that the court had jurisdiction of the case
under federal statute; or
(4) a statement of change of registered office or registered
agent, or both, setting forth:
(a) the name of the corporation;
(b) the information required by Article 2.10A of this Act, as
applicable, but not the information included in the statement
referred to in Article 2.10A(7) of this Act;
(c) the date of the court's order or decree approving the
statement of change of registered office or registered agent, or
both;
(d) the court, file name, and case number of the
reorganization case in which the order or decree was entered; and
(e) a statement that the court had jurisdiction of the case
under federal statute; or
(5) articles of conversion setting forth:
(a) the name of the corporation;
(b) the text of the part of the plan of reorganization that
contains the plan of conversion approved by the court, which shall
include the information required by Article 5.18 of this Act;
(c) the date of the court's order or decree approving the plan
of conversion;
(d) the court, file name, and case number of the
reorganization case in which the order or decree was entered; and
(e) a statement that the court had jurisdiction of the case
under federal statute.
C. Procedure for Merger or Share Exchange. When a domestic or
foreign corporation or other entity that is not being reorganized
merges or engages in a share exchange with a corporation that is
being reorganized pursuant to a plan of reorganization:
(1) Articles 5.01, 5.02, 5.03, 5.11, 5.12, and 5.13 of this
Act shall apply to the domestic or foreign corporation or other
entity that is not being reorganized to the same extent they would
apply if it were merging or engaging in a share exchange with a
corporation that is not being reorganized;
(2) Article 5.06 of this Act shall apply to the domestic or
foreign corporation or other entity that is not being reorganized
to the same extent it would apply if that domestic or foreign
corporation or other entity were merging or engaging in a share
exchange with a corporation that is not being reorganized, except
as otherwise provided in the plan of reorganization ordered or
decreed by a court of competent jurisdiction under the federal
statute;
(3) Article 5.16E of this Act shall apply to a subsidiary
corporation that is not being reorganized to the same extent it
would apply if that corporation were merging with a parent
corporation that is not being reorganized;
(4) Upon the receipt of all required authorization for all
action required by this Act for each corporation that is a party to
the plan of merger or exchange that is not being reorganized and all
action by each corporation, foreign corporation, or other entity
that is a party to the plan of merger or exchange required by the
laws under which it is incorporated or organized and its
constituent documents, articles of merger or exchange shall be
signed by each domestic or foreign corporation or other entity that
is a party to the merger or exchange other than the corporation that
is being reorganized as provided in Article 5.04 of this Act and on
behalf of the corporation that is being reorganized by the persons
specified in Section B of this Article;
(5) The articles of merger or exchange shall set forth the
information required in Section B(2) of this Article;
(6) The articles of merger or exchange shall be filed with the
Secretary of State in the manner and with such number of copies as
is provided in Article 5.04B of this Act; and
(7) Upon the issuance of the certificate of merger or share
exchange by the Secretary of State as provided in Article 5.04 of
this Act, the merger or share exchange shall become effective with
the same effect as if it had been adopted by unanimous action of the
directors and shareholders of the corporation being reorganized.
The effectiveness of the merger or share exchange shall be
determined as provided in Article 5.05 of this Act.
D. Dissenters' Rights. Shareholders of a corporation being
reorganized under a federal statute do not have a right to dissent
under Article 5.11, 5.16E, or 5.20 of this Act, except as the plan
of reorganization may provide.
E. When Applicable. This Article shall not apply after the
entry of a final decree in the reorganization case even though the
court may retain jurisdiction of the case for limited purposes
unrelated to consummation of the plan of reorganization.
F. Nonexclusivity. This Article shall not preclude other
changes in a corporation or its securities by a plan of
reorganization ordered or decreed by a court of competent
jurisdiction under federal statute.
Added by Acts 1961, 57th Leg., p. 424, ch. 206, Sec. 3. Amended by
Acts 1979, 66th Leg., p. 227, ch. 120, Sec. 35, eff. May 9, 1979;
Acts 1981, 67th Leg., p. 841, ch. 297, Sec. 21, eff. Aug. 31, 1981;
Acts 1987, 70th Leg., ch. 93, Sec. 23, eff. Aug. 31, 1987; Acts
1991, 72nd Leg., ch. 901, Sec. 24, eff. Aug. 26, 1991; Acts 1993,
73rd Leg., ch. 215, Sec. 2.12, eff. Sept. 1, 1993; Acts 1997, 75th
Leg., ch. 375, Sec. 23, eff. Sept. 1, 1997.