78R3779 ATP-D
By: Janek S.B. No. 1544
A BILL TO BE ENTITLED
AN ACT
relating to business corporations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section A, Article 1.02, Texas Business
Corporation Act, is amended by adding Subsection (30) to read as
follows:
(30) "Electronic transmission" means a form of
communication that:
(a) does not directly involve the physical
transmission of paper;
(b) creates a record that may be retained,
retrieved, and reviewed by the recipient; and
(c) may be directly reproduced in paper form by
the recipient through an automated process.
SECTION 2. Section A, Article 2.02, Texas Business
Corporation Act, is amended to read as follows:
A. Subject to the provisions of Sections B and C of this
Article, each corporation shall have power:
(1) To have perpetual succession by its corporate name
unless a limited period of duration is stated in its articles of
incorporation. Notwithstanding the articles of incorporation, the
period of duration for any corporation incorporated before
September 6, 1955, is perpetual if all fees and franchise taxes have
been paid as provided by law.
(2) To sue and be sued, complain and defend, in its
corporate name.
(3) To have a corporate seal which may be altered at
pleasure, and to use the same by causing it, or a facsimile thereof,
to be impressed on, affixed to, or in any manner reproduced upon,
instruments of any nature required to be executed by its proper
officers.
(4) To purchase, receive, lease, or otherwise acquire,
own, hold, improve, use and otherwise deal in and with, real or
personal property, or any interest therein, wherever situated, as
the purposes of the corporation shall require.
(5) To sell, convey, mortgage, pledge, lease,
exchange, transfer and otherwise dispose of all or any part of its
property and assets.
(6) To lend money to, and otherwise assist, its
employees, officers, and directors if such a loan or assistance
reasonably may be expected to benefit, directly or indirectly, the
lending or assisting corporation.
(7) To purchase, receive, subscribe for, or otherwise
acquire, own, hold, vote, use, employ, mortgage, lend, pledge, sell
or otherwise dispose of, and otherwise use and deal in and with,
shares or other interests in, or obligations of, other domestic or
foreign corporations, associations, partnerships, or individuals,
or direct or indirect obligations of the United States or of any
other government, state, territory, government district, or
municipality, or of any instrumentality thereof.
(8) To purchase or otherwise acquire its own bonds,
debentures, or other evidences of its indebtedness or obligations;
to purchase or otherwise acquire its own unredeemable shares and
hold those acquired shares as treasury shares or cancel or
otherwise dispose of those acquired shares; and to redeem or
purchase shares made redeemable by the provisions of its articles
of incorporation.
(9) To make contracts and incur liabilities, borrow
money at such rates of interest as the corporation may determine,
issue its notes, bonds, and other obligations, and secure any of its
obligations by mortgage or pledge of all or any of its property,
franchises, and income.
(10) To lend money for its corporate purposes, invest
and reinvest its funds, and take and hold real and personal property
as security for the payment of funds so loaned or invested.
(11) To conduct its business, carry on its operations,
and have offices and exercise the powers granted by this Act, within
or without this State.
(12) To elect or appoint officers and agents of the
corporation for such period of time as the corporation may
determine, and define their duties and fix their compensation.
(13) To make and alter bylaws, not inconsistent with
its articles of incorporation or with the laws of this State, for
the administration and regulation of the affairs of the
corporation.
(14) To make donations for the public welfare or for
charitable, scientific, or educational purposes.
(15) To transact any lawful business which the board
of directors shall find will be in aid of government policy.
(16) To indemnify directors, officers, employees, and
agents of the corporation and to purchase and maintain liability
insurance for those persons.
(17) To pay pensions and establish pension plans,
pension trusts, profit sharing plans, stock bonus plans, and other
incentive plans for any or all of, or any class or classes of, its
directors, officers, or employees.
(18) To be an organizer, partner, member, associate,
or manager of any partnership, joint venture, or other enterprise,
and to the extent permitted by [in] any other jurisdiction to be an
incorporator of any other corporation of any type or kind.
(19) To cease its corporate activities and terminate
its existence by voluntary dissolution.
(20) To renounce, in its articles of incorporation or
by action of its board of directors, an interest or expectancy of
the corporation in, or an interest or expectancy of the corporation
in being offered an opportunity to participate in, specified
business opportunities or specified classes or categories of
business opportunities that are presented to the corporation or one
or more of its officers, directors, or shareholders.
(21) Whether included in the foregoing or not, to have
and exercise all powers necessary or appropriate to effect any or
all of the purposes for which the corporation is organized.
SECTION 3. Sections F, K, and O, Article 2.02-1, Texas
Business Corporation Act, are amended to read as follows:
F. A determination of indemnification under Section B of
this article must be made:
(1) by a majority vote of the [a quorum consisting of]
directors who at the time of the vote are not named defendants or
respondents in the proceeding, regardless of whether the directors
not named defendants or respondents constitute a quorum;
(2) [if such a quorum cannot be obtained,] by a
majority vote of a committee of the board of directors, if:
(a) the committee is designated [to act in the
matter] by a majority vote of the [all directors, consisting solely
of two or more] directors who at the time of the vote are not named
defendants or respondents in the proceeding, regardless of whether
the directors not named defendants or respondents constitute a
quorum; and
(b) the committee consists solely of one or more
of the directors not named as defendants or respondents in the
proceeding;
(3) by special legal counsel selected by the board of
directors or a committee of the board by vote as set forth in
Subsection (1) or (2) of this section[, or, if such a quorum cannot
be obtained and such a committee cannot be established, by a
majority vote of all directors]; or
(4) by the shareholders in a vote that excludes the
shares held by directors who are named defendants or respondents in
the proceeding.
K. Reasonable expenses incurred by a present director who
was, is, or is threatened to be made a named defendant or respondent
in a proceeding may be paid or reimbursed by the corporation, in
advance of the final disposition of the proceeding and without the
determination specified in Section F of this article or the
authorization or determination specified in Section G of this
article, after the corporation receives a written affirmation by
the director of his good faith belief that he has met the standard
of conduct necessary for indemnification under this article and a
written undertaking by or on behalf of the director to repay the
amount paid or reimbursed if it is ultimately determined that he has
not met that standard or if it is ultimately determined that
indemnification of the director against expenses incurred by him in
connection with that proceeding is prohibited by Section E of this
article. Notwithstanding any authorization or determination
specified in this article, reasonable expenses incurred by a former
director or officer, or a present or former employee or agent of the
corporation, who was, is, or is threatened to be made a named
defendant or respondent in a proceeding may be paid or reimbursed by
the corporation, in advance of the final disposition of the
proceeding, on any terms the corporation considers appropriate. A
provision contained in the articles of incorporation, the bylaws, a
resolution of shareholders or directors, or an agreement that makes
mandatory the payment or reimbursement permitted under this section
shall be deemed to constitute authorization of that payment or
reimbursement.
O. An officer of the corporation shall be indemnified as,
and to the same extent, provided by Sections H, I, and J of this
article for a director and is entitled to seek indemnification
under those sections to the same extent as a director. A
corporation may indemnify and advance expenses to an officer,
employee, or agent of the corporation to the same extent that it may
indemnify and advance expenses to directors under this article. A
determination of indemnification for an employee or agent of the
corporation is not required to be made in accordance with Section F
of this article.
SECTION 4. Section A, Article 2.09, Texas Business
Corporation Act, is amended to read as follows:
A. Each corporation shall have and continuously maintain in
this State:
(1) A registered office which may be, but need not be,
the same as its place of business.
(2) A registered agent, which agent may be either an
individual resident in this State [whose business office is
identical with such registered office,] or a domestic corporation,
or other entity organized under the laws of this state or [a foreign
corporation] authorized to transact business in this State that
[which] has a business office identical with each such registered
office that is generally open during normal business hours to
accept service of process and otherwise perform the functions of a
registered agent.
SECTION 5. Article 2.13, Texas Business Corporation Act, is
amended by adding a new Section E and redesignating and amending
existing Sections E and F as Sections F and G to read as follows:
E. If the articles of incorporation expressly authorize the
board of directors to establish series of unissued shares of a class
and if no shares of a series established by resolution of the board
of directors have been issued, the board of directors may amend the
designations, preferences, limitations, and relative rights,
including voting rights, of the series, unless otherwise provided
in the articles of incorporation. To amend the designations,
preferences, limitations, and relative rights of a series, the
board of directors shall adopt a resolution amending the
designations, preferences, limitations, and relative rights of the
series. Before the issuance of any shares of the series, the
corporation shall file with the secretary of state a statement
setting forth:
(1) The name of the corporation.
(2) That no shares of the series have been issued.
(3) If the designation of the series is being changed,
a statement of the original designation and the new designation.
(4) A copy of the resolution amending the
designations, preferences, limitations, or relative rights of the
series.
(5) The date of adoption of the resolution.
(6) That the resolution was adopted by all necessary
action on the part of the corporation.
F. A [E. Such] statement filed in accordance with Section D
or E of this article shall be executed on behalf of the corporation
by an officer. The original and a copy of the statement shall be
delivered to the Secretary of State. If the Secretary of State
finds that such statement conforms to law, he shall, when the
appropriate filing fee is paid as prescribed 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) Return the copy to the corporation or its
representative.
G [F]. Upon the filing of a [such] statement described in
Section D or E of this article by the Secretary of State, the
resolution establishing and designating the series and fixing and
determining the preferences, limitations, and relative rights
thereof, the resolution fixing the new number of shares of each
series in which the number of shares is increased or decreased, [or]
the resolution eliminating a series and all references to such
series from the articles of incorporation, or the resolution
amending the preferences, limitations, and relative rights of the
series, as appropriate, shall become an amendment of the articles
of incorporation. The filing of the statement or the filing of a
restated certificate of incorporation under Article 4.07 of this
Act does not prohibit the board of directors from subsequently
adopting a resolution as authorized by this article. An amendment
of the articles of incorporation effected pursuant to this Article
2.13 is not subject to the procedure to amend the articles of
incorporation contained in Article 4.02 of this Act.
SECTION 6. Article 2.14, Texas Business Corporation Act, is
amended by amending Sections C and D and adding Section E to read as
follows:
C. Acceptance of a subscription [In the case of an existing
corporation, acceptance] shall be effected by a resolution of
acceptance by the board of directors or by a written memorandum of
acceptance executed by one authorized by the board of directors and
delivered to the subscriber or his assignee.
D. Subscriptions for shares, whether made before or after
the organization of a corporation, shall be paid in full at such
time, or in such installments and at such times, as shall be
determined by the board of directors unless the payment terms are
specified by the subscription. Unless otherwise specified by the
subscription, a [Any] call made by the board of directors for
payment on subscriptions shall be uniform as to all shares of the
same class or as to all shares of the same series, as the case may
be, as far as practicable. In case of default in the payment of any
installment or call when such payment is due, the corporation may
proceed to collect the amount due in the same manner as any debt due
the corporation or declare the subscription forfeited if[. The
bylaws may prescribe other penalties for failure to pay
installments or calls that may become due, but no penalty working a
forfeiture of a subscription, or of the amounts paid thereon, shall
be declared against any subscriber unless] the amount due remains
[thereon shall remain] unpaid for a period of twenty (20) days after
written demand has been made therefor to the subscriber. If mailed,
such written demand shall be deemed to be made when deposited in the
United States mail in a sealed envelope addressed to the subscriber
at his last post office address known to the corporation, with
postage thereon prepaid. [If the demand remains unsatisfied for a
period of twenty (20) days, and if the corporation is solvent, the
corporation may declare the subscription to be forfeited.] The
effect of such declaration of forfeiture shall be to terminate all
the rights and obligations of the subscriber as such, but the
corporation may retain any amount previously paid on the
subscription.
E. Before acquiring shares in a corporation, a person may
commit to act in a specified manner with respect to the shares after
the acquisition, including with respect to the voting of the shares
or the retention or disposition of the shares. To be binding, the
commitment must be in writing and be signed by the person acquiring
the shares. A written commitment entered into under this section is
a contract between the shareholder and the corporation.
SECTION 7. Article 2.14-1, Texas Business Corporation Act,
is amended to read as follows:
Art. 2.14-1. STOCK RIGHTS, OPTIONS, AND CONVERTIBLE
INDEBTEDNESS. A. Subject to any limitations in its articles of
incorporation, a corporation may create and issue, whether or not
in connection with the issuance and sale of any of its shares or
other securities, (1) rights or options entitling the holders
thereof to purchase or receive from the corporation any of its
shares of any class, classes or series or other securities and (2)
indebtedness convertible into any of its shares of any class,
classes or series or other securities.
B. The terms of rights or options may:
(1) prohibit or limit the exercise, transfer, or
receipt of the rights or options by certain persons or classes of
persons, including:
(a) a person who beneficially owns or offers to
acquire a specified number or percentage of the outstanding common
shares, voting power, or other securities of the corporation; or
(b) a transferee of a person described by
Paragraph (a) of this subsection; or
(2) invalidate the rights or options held by a person
or transferee described by Subsection (1) of this section.
C. Such rights, options or indebtedness shall be evidenced
in such manner as the board of directors shall approve and, subject
to the provisions of the articles of incorporation, shall set
forth:
(1) [(a)] in the case of rights or options, the terms
upon which, the time or times within which, and any [the]
consideration, including a formula by which the consideration may
be determined, [if any,] for which[,] such shares may be purchased
or received from the corporation upon the exercise of any such right
or option;[,] or
(2) [(b)] in the case of convertible indebtedness, the
terms and conditions upon which, the time or times within which, and
the conversion ratio or ratios at which, such indebtedness may be
converted into such shares.
D. In the absence of fraud in the transaction, the judgment
of the board of directors as to the adequacy of the consideration
received for such rights, options, or indebtedness shall be
conclusive; provided that rights or options may be issued by a
corporation to its shareholders, employees, or directors without
consideration if, in the judgment of the board of directors, the
issuance of those rights or options is in the interests of the
corporation. The consideration to be received for any shares
having a par value, other than treasury shares, to be issued upon
the exercise of such rights or options shall not be less than the
par value thereof. No privilege of conversion shall be conferred
upon, or altered in respect to, any indebtedness that would result
in receipt by the corporation of less than the minimum
consideration required to be received upon issuance of the shares.
The consideration for shares issued upon the exercise of
convertible indebtedness shall be that provided in Section E of
Article 2.15 of this Act. The consideration for shares issued upon
the exercise of rights or options shall be that provided in Section
F of Article 2.15 of this Act.
E. Except as provided by Section F of this article, the
authority to grant, amend, redeem, extend, or replace the rights or
options on behalf of a corporation is vested exclusively in the
board of directors of the corporation. A bylaw may not require the
board to grant, amend, redeem, extend, or replace the rights or
options.
F. The terms of the rights or options or the agreement or
plan under which the rights or options are issued may provide that
the board of directors may by resolution authorize one or more
officers of the corporation to:
(1) designate officers and employees of the
corporation or of any of its subsidiaries to receive rights or
options created by the corporation; or
(2) determine the number of the rights or options to be
received by the officers and employees.
G. A resolution adopted under Section F of this article
authorizing an officer of the corporation to designate recipients
of rights or options shall specify the total number of rights or
options the officer may award. The board of directors may not
authorize an officer to designate himself or herself as a recipient
of any rights or options.
SECTION 8. Article 2.22, Texas Business Corporation Act, is
amended by amending Sections B and D and adding Section H to read as
follows:
B. A restriction on the transfer or registration of transfer
of a security, or on the amount of the corporation's securities that
may be owned by any person or group of persons, may be imposed by the
articles of incorporation, or by-laws, or a written agreement among
any number of the holders of such securities, or a written agreement
among any number of the holders and the corporation provided a
counterpart of such agreement shall be placed on file by the
corporation at its principal place of business or its registered
office and shall be subject to the same right of examination by a
shareholder of the corporation, in person or by agent, attorney or
accountant, as are the books and records of the corporation. No
restriction so imposed shall be valid with respect to any security
issued prior to the adoption of the restriction unless the holder of
the security voted in favor of the restriction or is a party to the
agreement imposing it.
D. In particular and without limiting the general power
granted in Sections B and C of this Article to impose reasonable
restrictions, a restriction on the transfer or registration of
transfer of securities of a corporation shall be valid if it
reasonably:
(1) Obligates the holders of the restricted securities
to offer to the corporation or to any other holders of securities of
the corporation or to any other person or to any combination of the
foregoing, a prior opportunity, to be exercised within a reasonable
time, to acquire the restricted securities; or
(2) Obligates the corporation to the extent permitted
by this Act or any holder of securities of the corporation or any
other person, or any combination of the foregoing, to purchase the
securities which are the subject of an agreement respecting the
purchase and sale of the restricted securities; or
(3) Requires the corporation or the holders of any
class of securities of the corporation to consent to any proposed
transfer of the restricted securities or to approve the proposed
transferee of the restricted securities for the purpose of
preventing violations of federal or state laws; or
(4) Prohibits the transfer of the restricted
securities to designated persons or classes of persons, and such
designation is not manifestly unreasonable; or
(5) Maintains the status of the corporation as an
electing small business corporation under Subchapter S of the
United States Internal Revenue Code, maintains any other tax
advantage to the corporation, or maintains the status of the
corporation as a close corporation under Part Twelve of this Act; or
(6) Obligates the holder of the restricted securities
to sell or transfer an amount of restricted securities to the
corporation, to any other holders of securities of the corporation,
or to any other person or combination of persons; or
(7) Causes the automatic sale or transfer of an amount
of restricted securities to the corporation, to any other holders
of securities of the corporation, or to any other person or
combination of persons.
H. A restriction on the transfer or the registration of a
transfer of the securities of a corporation, the amount of
securities of a corporation, or the amount of securities of a
corporation that may be owned by a person or group of persons for
any of the following purposes is conclusively presumed to be for a
reasonable purpose:
(1) maintaining a local, state, federal, or foreign
tax advantage to the corporation or its stockholders, including:
(a) maintaining the corporation's status as an
electing small business corporation under Subchapter S of the
Internal Revenue Code of 1986;
(b) maintaining or preserving any tax attribute,
including net operating losses; or
(c) qualifying or maintaining the qualification
of the corporation as a real estate investment trust under the
Internal Revenue Code of 1986 or regulations adopted under the
Internal Revenue Code of 1986; or
(2) maintaining a statutory or regulatory advantage or
complying with a statutory or regulatory requirement under
applicable local, state, federal, or foreign law.
SECTION 9. Article 2.22-1, Texas Business Corporation Act,
is amended to read as follows:
Art. 2.22-1. SHAREHOLDERS' PREEMPTIVE RIGHTS. A. Except
as provided by Section F of this article, the [The] shareholders of
a corporation shall not have a preemptive right to acquire
additional, unissued, or treasury shares of the corporation, or
securities of the corporation convertible into or carrying a right
to subscribe to or acquire shares, except to the extent provided
[limited or denied by this Article or] by the articles of
incorporation or by agreement.
B. The articles of incorporation may provide that the
shareholders of a corporation shall have a preemptive right by
including a statement that the corporation "elects to have a
preemptive right" or a similar statement. Section C of this article
applies to the shareholders' preemptive right except as otherwise
provided by the articles of incorporation.
C. (1) If the shareholders of a corporation have a
preemptive right under this article, the shareholders have a
preemptive right to acquire proportional amounts of the
corporation's additional unissued or treasury shares, or
securities of the corporation convertible into or carrying a right
to subscribe to or acquire shares on the decision of the
corporation's board of directors to issue the shares.
(2) Unless otherwise provided in the articles of
incorporation, no [(1) No] preemptive right shall exist with
respect to:
(a) [to acquire any] shares issued or granted to
a director, officer, agent, or employee of the corporation or a
subsidiary or affiliate of the corporation [to employees pursuant
to approval by the affirmative vote of the holders of a majority of
the shares entitled to vote thereon or when authorized by and
consistent with a plan theretofore approved by such a vote of
shareholders]; [or]
(b) shares issued or granted to satisfy
conversion or option rights created to provide compensation to a
director, officer, agent, or employee of the corporation or a
subsidiary or affiliate of the corporation;
(c) shares authorized in the corporation's
articles of incorporation that are issued not later than the 180th
day after the effective date of the corporation's formation; or
(d) [to acquire any] shares sold, issued, or
granted by the corporation for consideration other than money
[otherwise than for cash].
(3) [(2)] Holders of shares of any class or series
without general voting rights but that is preferred [or limited] as
to distributions [dividends or assets] shall not be entitled to any
preemptive right.
(4) [(3)] Holders of shares of any class or series
with general voting rights that is not preferred [or limited] as to
distributions [dividends or assets] shall not be entitled to any
preemptive right to shares of any class or series that is preferred
[or limited] as to distributions [dividends or assets] or to any
obligations, unless the shares with preferential rights or
obligations are convertible into [shares of such class or series
that is not preferred or limited] or carry [carrying] a right to
subscribe to or acquire shares without preferential rights [of such
class or series].
[(4) Holders of shares without voting power shall have
no preemptive right to shares with voting power.]
(5) The preemptive right shall be only an opportunity
to acquire shares or other securities under such uniform terms and
conditions as the board of directors may fix for the purpose of
providing a fair and reasonable opportunity for the exercise of
such right.
(6) For a one-year period beginning on the date on
which the shares are offered to shareholders, shares subject to
preemptive rights that are not acquired by a shareholder may be
issued to a person for consideration set by the corporation's board
of directors that is not lower than the consideration set for the
exercise of preemptive rights. An offer at a lower consideration or
after the expiration of the period prescribed by this subsection is
subject to the shareholders' preemptive rights.
D [C]. An action may not be brought against the corporation,
its directors, officers, or agents, any holder of shares or
securities of the corporation, or any owner of any beneficial
interest in shares or securities of the corporation on account of
any violation of any preemptive right of a shareholder to acquire
any shares of the corporation, or any securities of the corporation
convertible into or carrying a right to subscribe to or acquire
shares, unless such action is brought within the earlier of:
(1) One year after the date on which written notice is
given to each shareholder whose preemptive right was violated by
the issuance, sale, or other distribution of those shares or
securities, which notice shall be mailed to the shareholder at the
address of the shareholder as it appears on the share transfer
records of the corporation and shall inform the shareholder that
the issuance, sale, or other distribution of those shares or
securities was in violation of the preemptive right of the
shareholder; and
(2) Four years after the date on which the corporation
issued, sold, or otherwise distributed those shares or securities
or August 28, 1989 [the effective date of this provision],
whichever is later.
E [D]. In the event of a transfer or other disposition of
shares by any shareholder of a corporation whose preemptive right
to acquire shares of the corporation, or securities of the
corporation convertible into or carrying a right to subscribe to or
acquire shares, shall have been violated, the transferee or
successor of the shareholder shall not acquire the preemptive
right, or any right or claim based on that violation, unless the
shareholder shall have assigned the preemptive right to the
transferee or successor.
F. Subject to the articles of incorporation, shareholders
of a corporation incorporated before September 1, 2003, have a
preemptive right to acquire additional unissued or treasury shares
of the corporation, or securities of the corporation convertible
into or carrying a right to subscribe to or acquire shares, to the
extent provided by Sections C, D, and E of this article. After
September 1, 2003, a corporation may limit or deny the preemptive
right of the shareholders of the corporation by amending the
corporation's articles of incorporation.
G. A shareholder may waive a preemptive right granted to the
shareholder. A written waiver of a preemptive right is irrevocable
regardless of whether the waiver is supported by consideration.
SECTION 10. Sections A and B, Article 2.24, Texas Business
Corporation Act, are amended to read as follows:
A. Meetings of shareholders may be held at such place within
or without this State as may be stated in or fixed in accordance
with the bylaws. If no other place is so stated or fixed, the board
of directors of the corporation is not authorized to designate a
place, or the board of directors chooses not to designate a place,
meetings shall be held at the registered office of the corporation.
(1) If, under the articles of incorporation or the
bylaws, the board of directors is authorized to determine the place
of a meeting of shareholders, the board of directors may, in its
discretion, determine that the meeting may be held solely by means
of remote communication as provided by Subsection (2) of this
section.
(2) If authorized by the board of directors, and
subject to any guidelines and procedures adopted by the board of
directors, shareholders not physically present at a meeting of
shareholders, by means of remote communication:
(a) may participate in a meeting of shareholders;
and
(b) may be considered present in person and may
vote at a meeting of shareholders held at a designated place or held
solely by means of remote communication if:
(i) the corporation implements reasonable
measures to verify that each person considered present and
permitted to vote at the meeting by means of remote communication is
a shareholder;
(ii) the corporation implements reasonable
measures to provide the shareholders at the meeting by means of
remote communication a reasonable opportunity to participate in the
meeting and to vote on matters submitted to the shareholders,
including an opportunity to read or hear the proceedings of a
meeting substantially concurrently with the proceedings; and
(iii) the corporation maintains a record of
any shareholder vote or other action taken at the meeting by means
of remote communication.
B. An annual meeting of the shareholders shall be held at
such time as may be stated in or fixed in accordance with the
bylaws. If the annual meeting is not held within any 13-month
period and written consent of shareholders has not been executed
instead of the meeting, any court of competent jurisdiction in the
county in which the principal office of the corporation is located
may, on the application of any shareholder, summarily order a
meeting to be held unless the meeting is not required to be held
under Section D of this article. Failure to hold the annual meeting
at the designated time shall not work a dissolution of the
corporation.
SECTION 11. Article 2.25, Texas Business Corporation Act,
is amended by amending Section A and adding Section C to read as
follows:
A. Written or printed notice stating the place, day and hour
of the meeting, the means of any remote communications by which
shareholders may be considered present and may vote at the meeting,
and, in case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten (10)
days nor more than sixty (60) days before the date of the meeting,
either personally or by mail, by or at the direction of the
president, the secretary, or the officer or person calling the
meeting, to each shareholder entitled to vote at such meeting. 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 share transfer records of the
corporation, with postage thereon prepaid.
C. The exception in Section B of this article to the
requirement that notice be given does not apply to a notice returned
as undeliverable if the notice was given by electronic
transmission.
SECTION 12. Sections A and C, Article 2.27, Texas Business
Corporation Act, are amended to read as follows:
A. The officer or agent having charge of the share transfer
records for shares of a corporation shall make, at least ten (10)
days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting or any adjournment
thereof, arranged in alphabetical order, with the address of and
the number of shares held by each, which list, for a period of ten
(10) days prior to such meeting, shall be kept on file at the
registered office or principal place of business of the corporation
and shall be subject to inspection by any shareholder at any time
during usual business hours. Alternatively, the list of the
shareholders may be kept on a reasonably accessible electronic
network, if the information required to gain access to the list is
provided with the notice of the meeting. This article does not
require the corporation to include any electronic contact
information of any shareholder on the list. If the corporation
elects to make the list available on an electronic network, the
corporation shall take reasonable steps to ensure that the
information is available only to shareholders of the corporation.
Such list shall also be produced and kept open at the time and place
of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting. If the meeting is
held by means of remote communication, the list must be open to the
examination of any shareholder for the duration of the meeting on a
reasonably accessible electronic network, and the information
required to access the list must be provided to shareholders with
the notice of the meeting. The original share transfer records
shall be prima-facie evidence as to who are the shareholders
entitled to examine such list or transfer records or to vote at any
meeting of shareholders.
C. An officer or agent having charge of the share transfer
records who shall fail to prepare the list of shareholders or keep
the same accessible to shareholders electronically or physically on
file at the principal place of business for a period of ten (10)
days, or produce and keep it accessible [open] for inspection
during [at] the meeting, as provided in this Article, shall be
liable to any shareholder suffering damages [damage] on account of
such failure, to the extent of such damage. In the event that such
officer or agent does not receive notice of the date of the [a]
meeting [of shareholders sufficiently in advance of the date of
such meeting] reasonably to enable him to comply with the duties
prescribed by this Article, the corporation, [but] not such officer
or agent, shall be liable to any shareholder suffering damage on
account of such failure, to the extent of such damage.
SECTION 13. Sections C and D, Article 2.29, Texas Business
Corporation Act, are amended to read as follows:
C. Any shareholder may vote either in person or by proxy
executed in writing by the shareholder. A telegram, telex,
cablegram, or other form of electronic [similar] transmission,
including telephone transmission, by the shareholder, or a
photographic, photostatic, facsimile, or similar reproduction of a
writing executed by the shareholder, shall be treated as an
execution in writing for purposes of this Section. Any electronic
transmission must contain or be accompanied by information from
which it can be determined that the transmission was authorized by
the shareholder. No proxy shall be valid after eleven (11) months
from the date of its execution unless otherwise provided in the
proxy. A proxy shall be revocable unless the proxy form
conspicuously states that the proxy is irrevocable and the proxy is
coupled with an interest. Proxies coupled with an interest include
the appointment as proxy of:
(1) a pledgee;
(2) a person who purchased or agreed to purchase, or
owns or holds an option to purchase, the shares;
(3) a creditor of the corporation who extended it
credit under terms requiring the appointment;
(4) an employee of the corporation whose employment
contract requires the appointment; or
(5) a party to a voting agreement created under
Section B, Article 2.30, of this Act.
An irrevocable proxy, if noted conspicuously on the
certificate representing the shares that are subject to the
irrevocable proxy or, in the case of uncertificated shares, if
notation of the irrevocable proxy is contained in the notice sent
pursuant to Section D of Article 2.19 of this Act with respect to
the shares that are subject to the irrevocable proxy, shall be
specifically enforceable against the holder of those shares or any
successor or transferee of the holder. Unless noted conspicuously
on the certificate representing the shares that are subject to the
irrevocable proxy or, in the case of uncertificated shares, unless
notation of the irrevocable proxy is contained in the notice sent
pursuant to Section D of Article 2.19 of this Act with respect to
the shares that are subject to the irrevocable proxy, an
irrevocable proxy, even though otherwise enforceable, is
ineffective against a transferee for value without actual knowledge
of the existence of the irrevocable proxy at the time of the
transfer or against any subsequent transferee (whether or not for
value), but such an irrevocable proxy shall be specifically
enforceable against any other person who is not a transferee for
value from and after the time that the person acquires actual
knowledge of the existence of the irrevocable proxy.
D. (1) At each election for directors every shareholder
entitled to vote at such election shall have the right (a) to vote
the number of shares owned by him for as many persons as there are
directors to be elected and for whose election he has a right to
vote or (b) only if [unless] expressly permitted [prohibited] by
the articles of incorporation (in general or with respect to a
specified class or series of shares or group of classes or series of
shares) and subject to subsection (2) of this Section D, to cumulate
his votes by giving one candidate as many votes as the number of
such directors multiplied by his shares shall equal, or by
distributing such votes on the same principle among any number of
such candidates.
(2) Cumulative voting shall not be allowed in an
election of directors unless the articles of incorporation
expressly grant that right, and a shareholder who intends to
cumulate his votes as herein authorized shall have given written
notice of such intention to the secretary of the corporation on or
before the day preceding the election at which such shareholder
intends to cumulate his votes. All shareholders entitled to vote
cumulatively may cumulate their votes if any shareholder gives the
written notice provided for herein.
(3) Except as provided by the articles of
incorporation, a shareholder of a corporation incorporated before
September 1, 2003, has the right to cumulatively vote the number of
shares the shareholder owns in the election of directors to the
extent permitted by this article. A corporation may limit or deny a
shareholder's right to cumulatively vote any time after September
1, 2003, by amending its articles of incorporation.
SECTION 14. Article 2.32, Texas Business Corporation Act,
is amended to read as follows:
Art. 2.32. NUMBER AND ELECTION OF DIRECTORS. A. The board
of directors of a corporation shall consist of one or more members.
The number of directors shall be fixed by, or in the manner provided
in, the articles of incorporation or the bylaws, except as to the
number constituting the initial board of directors, which number
shall be fixed by the articles of incorporation. The number of
directors may be increased or decreased from time to time by
amendment to, or in the manner provided in, the articles of
incorporation or the bylaws, but no decrease shall have the effect
of shortening the term of any incumbent director. In the absence of
a bylaw or a provision of the articles of incorporation fixing the
number of directors or providing for the manner in which the number
of directors shall be fixed, the number of directors shall be the
same as the number constituting the initial board of directors as
fixed by the articles of incorporation. The names and addresses of
the members of the initial board of directors shall be stated in the
articles of incorporation. Unless otherwise provided by the
articles of incorporation or the bylaws, a director may resign at
any time by giving notice in writing or by electronic transmission
to the corporation. Absent resignation or removal [removed] in
accordance with the provisions of the bylaws or the articles of
incorporation, such persons shall hold office until the first
annual meeting of shareholders, and until their successors shall
have been elected and qualified. At the first annual meeting of
shareholders and at each annual meeting thereafter, the holders of
shares entitled to vote in the election of directors shall elect
directors to hold office until the next succeeding annual meeting,
except in case of the classification of directors as permitted by
this Act.
B. The articles of incorporation may provide that the
holders of any class or series of shares or any group of classes or
series of shares shall be entitled to elect one or more directors,
who shall hold office for such terms as shall be stated in the
articles of incorporation. The articles of incorporation may
provide that any directors elected by the holders of any such class
or series of shares or any such group shall be entitled to more or
less than one vote on all or any specified matters, in which case
every reference in this Act (or in the articles of incorporation or
bylaws, unless expressly stated otherwise therein) to a specified
portion of the directors shall mean such portion of the votes
entitled to be cast by the directors to which such reference is
applicable. Absent resignation or removal [Unless removed] in
accordance with provisions of the bylaws or the articles of
incorporation, each director shall hold office for the term for
which he is elected and until his successor shall have been elected
and qualified.
C. Except as otherwise provided in this Article, the bylaws,
or the articles of incorporation, [may provide that] at any meeting
of shareholders called expressly for that purpose, any director or
the entire board of directors may be removed, with or without cause,
by a vote of the holders of a [specified portion, but not less than
a] majority[,] of the shares then entitled to vote at an election of
the director or directors [, subject to any further restrictions on
removal that may be contained in the bylaws]. Whenever the holders
of any class or series of shares or any such group are entitled to
elect one or more directors by the provisions of the articles of
incorporation, only the holders of shares of that class or series or
group shall be entitled to vote for or against the removal of any
director elected by the holders of shares of that class or series or
group. In the case of a corporation having cumulative voting, if
less than the entire board is to be removed, no one of the directors
may be removed if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of
the entire board of directors, or if there be classes of directors,
at an election of the class of directors of which he is a part. In
the case of a corporation whose directors have been classified as
permitted by this Act, unless the articles of incorporation
otherwise provide, a director may not be removed except for cause.
D. Notwithstanding Section B of this Article, a director of
a corporation registered under the Investment Company Act, absent
resignation or removal [unless removed] in accordance with the
provisions of the articles of incorporation or bylaws, holds office
for the term for which the director is elected and until the
director's successor has been elected and qualified.
SECTION 15. Section A, Article 2.36, Texas Business
Corporation Act, is amended to read as follows:
A. If the articles of incorporation or the bylaws so
provide, the board of directors[, by resolution adopted by a
majority of the full board of directors,] may designate from among
its members one or more committees, each of which shall be comprised
of one or more of its members, and may designate one or more of its
members as alternate members of any committee, who may, subject to
any limitations imposed by the board of directors, replace absent
or disqualified members at any meeting of that committee. Any such
committee, to the extent provided in the [such] resolution of the
board of directors or in the articles of incorporation or the
bylaws, shall have and may exercise all of the authority of the
board of directors, subject to the limitations set forth in
Sections B and C of this Article.
SECTION 16. Section A, Article 2.41, Texas Business
Corporation Act, is amended to read as follows:
A. In addition to any other liabilities imposed by law upon
directors of a corporation:
(1) Directors of a corporation who vote for or assent
to a distribution by the corporation that is not permitted by
Article 2.38 of this Act shall be jointly and severally liable to
the corporation for the amount by which the distributed amount
exceeds the amount permitted by Article 2.38 of this Act to be
distributed; provided that a director shall have no liability for
the excess amount, or any part of that excess, if on any date after
the date of the vote or assent authorizing the distribution, a
distribution of that excess or that part would have been permitted
by Article 2.38.
(2) [If the corporation shall commence business before
it has received for the issuance of shares consideration of the
value of at least One Thousand Dollars ($1,000), consisting of
money, labor done, or property actually received, the directors who
assent thereto shall be jointly and severally liable to the
corporation for such part of the required consideration as shall
not have been received before commencing business, but such
liability shall be terminated when the corporation has actually
received the required consideration for the issuance of shares.
[(3)] An action may not be brought against a director
for liability imposed by this section after two years after the date
on which the act alleged to give rise to the liability occurred.
SECTION 17. Section A, Article 2.44, Texas Business
Corporation Act, is amended to read as follows:
A. Each corporation shall keep books and records of account
and shall keep minutes of the proceedings of its shareholders, its
board of directors, and each committee of its board of directors.
Each corporation shall keep at its registered office or principal
place of business, or at the office of its transfer agent or
registrar, a record of the original issuance of shares issued by the
corporation and a record of each transfer of those shares that have
been presented to the corporation for registration of transfer.
Such records shall contain the names and addresses of all past and
current shareholders of the corporation and the number and class or
series of shares issued by the corporation held by each of them.
Any books, records, minutes, and share transfer records may be in
written form or in any other form capable of being converted into
written paper form within a reasonable time. The principal place of
business of a corporation, or the office of its transfer agent or
registrar, may be located outside the State of Texas.
SECTION 18. Section A, Article 3.02, Texas Business
Corporation Act, is amended to read as follows:
A. The articles of incorporation shall set forth:
(1) The name of the corporation;
(2) The period of duration, which may be perpetual;
(3) The purpose or purposes for which the corporation
is organized which may be stated to be, or to include, the
transaction of any or all lawful business for which corporations
may be incorporated under this Act;
(4) The aggregate number of shares which the
corporation shall have authority to issue; if such shares are to
consist of one class only, the par value of each of such shares, or a
statement that all of such shares are without par value; or, if such
shares are to be divided into classes, the number of shares of each
class, and a statement of the par value of the shares of each class
or that such shares are to be without par value;
(5) If the shares are to be divided into classes, the
designation of each class and statement of the preferences,
limitations, and relative rights in respect of the shares of each
class;
(6) If the corporation is to issue the shares of any
class in series, then the designation of each series and a statement
of the variations in the preferences, limitations and relative
rights as between series insofar as the same are to be fixed in the
articles of incorporation, and a statement of any authority to be
vested in the board of directors to establish series and fix and
determine the preferences, limitations and relative rights of each
series;
(7) [A statement that the corporation will not
commence business until it has received for the issuance of shares
consideration of the value of a stated sum which shall be at least
One Thousand Dollars ($1,000.00);
[(8)] Any provision limiting or denying to
shareholders the preemptive right to acquire additional or treasury
shares of the corporation;
(8) [(9)] If a corporation elects to become a close
corporation in conformance with Part Twelve of this Act, any
provision (a) required or permitted by this Act to be stated in the
articles of incorporation of a close corporation, but not in the
articles of incorporation of an ordinary corporation, (b) contained
or permitted to be contained in a shareholders' agreement in
conformance with Part Twelve of this Act which the incorporators
elect to set forth in articles of incorporation, or (c) that makes a
shareholders' agreement in conformance with Part Twelve of this Act
part of the articles of incorporation of a close corporation in the
manner prescribed in Section F, Article 2.22 of this Act, but any
such provision, other than the statement required by Section A,
Article 12.11 of this Act, shall be preceded by a statement that the
provision shall be subject to the corporation remaining a close
corporation in conformance with Part Twelve of this Act;
(9) [(10)] Any provision, not inconsistent with law,
including any provision which under this Act is required or
permitted to be set forth in the bylaws or which is permitted to be
included pursuant to Article 2.30-1 of this Act, providing for the
regulation of the internal affairs of the corporation;
(10) [(11)] The street address of its initial
registered office and the name of its initial registered agent at
such address;
(11) [(12)] Subject to Article 2.30-1 of this Act, the
number of directors constituting the initial board of directors and
the names and addresses of the person or persons who are to serve as
directors until the first annual meeting of shareholders or until
their successors be elected and qualify, or, in the case of a close
corporation that, in conformance with Part Twelve of this Act, is to
be managed in some other manner pursuant to a shareholders'
agreement by the shareholders or by the persons empowered by the
agreement to manage its business and affairs, the names and
addresses of the person or persons who, pursuant to the
shareholders' agreement, will perform the functions of the initial
board of directors provided for by this Act;
(12) [(13)] The name and address of each incorporator,
unless the corporation is being incorporated pursuant to a plan of
conversion or a plan of merger, in which case the articles need not
include such information; and
(13) [(14)] If the corporation is being incorporated
pursuant to a plan of conversion or a plan of merger, a statement to
that effect, and in the case of a plan of conversion, the name,
address, date of formation, and prior form of organization and
jurisdiction of incorporation or organization of the converting
entity.
SECTION 19. Section A, Article 4.01, Texas Business
Corporation Act, is amended to read as follows:
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.
SECTION 20. Section A, Article 4.02, Texas Business
Corporation Act, is amended to read as follows:
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.
SECTION 21. Section B, Article 4.04, Texas Business
Corporation Act, is amended to read as follows:
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) The date of the adoption of the amendment by the
shareholders, or by the board of directors where no shares have been
issued.
(4) A statement that the amendment has been approved
in the manner required by this Act and the constituent documents of
the corporation. [The number of shares outstanding, and the number
of shares entitled to vote on the amendment, and if the shares of
any class or series are entitled to vote thereon as a class, the
designation and number of outstanding shares entitled to vote
thereon of each such class or series.
[(5) The number of shares voted for and against the
amendment, respectively, and, if the shares of any class are
entitled to vote thereon as a class or series, the number of shares
of each such class or series voted for and against the amendment,
respectively, or if no shares have been issued a statement to that
effect.
[(6) If the amendment provides for an exchange,
reclassification or cancellation of issued shares, and if the
manner in which the same shall be effected is not set forth in the
amendment, then a statement of the manner in which the same shall be
effected.
[(7) If the amendment effects a change in the amount of
stated capital, then a statement of the manner in which the same is
effected and a statement, expressed in dollars, of the amount of
stated capital as changed by the amendment.]
SECTION 22. Sections A and D, Article 4.10, Texas Business
Corporation Act, are amended to read as follows:
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[, and a statement of
cancellation shall be filed as provided in this Article].
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 [filing of the statement of cancellation shall
operate as an amendment to the articles of incorporation and shall
reduce 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 [filing
of the statement of cancellation shall operate as an amendment to
the articles of incorporation by eliminating therefrom all
reference to such] class of shares [and shall reduce the classes of
shares which the corporation is authorized to issue accordingly].
D. The [filing of the statement of] 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.
SECTION 23. Sections A and D, Article 4.11, Texas Business
Corporation Act, are amended to read as follows:
A. A corporation may, at any time, by resolution of its
board of directors, cancel all or any part of its treasury shares[,
and in such event a statement of cancellation shall be filed as
provided in this Article].
D. Upon the [filing of such statement of] 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.
SECTION 24. Section D, Article 4.12, Texas Business
Corporation Act, is amended to read as follows:
D. Upon the approval [filing] of such resolution by the
shareholders [statement], the stated capital of the corporation
shall be reduced as therein set forth.
SECTION 25. Section C, Article 5.01, Texas Business
Corporation Act, is amended to read as follows:
C. The plan of merger may set forth:
(1) any amendments to the articles of incorporation of
any surviving corporation;
(2) provisions relating to a share exchange; and
(3) any other provisions relating to the merger,
including a provision requiring that the plan of merger be
submitted to shareholders regardless of whether the board of
directors determines after adopting the resolution or making the
determination required by Section B, Article 5.03 of this Act, that
the plan of merger is not advisable and recommends that the
shareholders reject it.
SECTION 26. Section C, Article 5.02, Texas Business
Corporation Act, is amended to read as follows:
C. The plan of exchange may set forth any other provisions
relating to the exchange and may be contained in and be a part of a
plan of merger, including a provision requiring that the plan of
exchange be submitted to shareholders regardless of whether the
board of directors determines after adopting the resolution or
making the determination required by Section B, Article 5.03 of
this Act, that the plan of exchange is not advisable and recommends
that the shareholders reject it.
SECTION 27. Article 5.03, Texas Business Corporation Act,
is amended by amending Sections A, C, and H and adding Sections H-1
and M to read as follows:
A. Except as provided by Sections G and H of this Article,
after acting on a plan of merger or exchange in the manner
prescribed by Subsection (1) of Section B of this Article, the board
of directors of each domestic corporation that is a party to the
merger, and the board of directors of each domestic corporation
whose shares are to be acquired in the share exchange, shall submit
the plan of merger or exchange for approval by its shareholders.
The terms of the agreement may require that the agreement be
submitted to the stockholders regardless of whether the board of
directors determines after declaring its advisability that the
agreement is no longer advisable and recommends that the
stockholders reject it. Unless the articles of incorporation
otherwise require, no approval by shareholders of a plan of merger
is required under this Article for any corporation that is a party
to the plan of merger unless that corporation is also a party to the
merger.
C. The board of directors may condition its submission to
shareholders of a plan of merger or exchange on any basis. If,
after the adoption of a resolution recommending that the plan of
merger or exchange be approved or after a determination by the board
of directors that a recommendation should not be made, the board of
directors determines that the plan of merger or exchange is not
advisable, the plan of merger or exchange may be submitted to the
shareholders with a recommendation that the shareholders not
approve the plan of merger or exchange.
H. Unless the articles of incorporation otherwise require,
approval by the shareholders of a corporation of a plan of merger
shall not be required and Sections A, B, C, D, E, and F of this
Article do not apply if:
(1) the merger is a merger of the corporation with or
into a direct or indirect wholly owned subsidiary of the
corporation and after the merger the corporation or its successor
is a direct or indirect wholly owned subsidiary of a holding
company;
(2) the corporation and the direct or indirect wholly
owned subsidiary of the corporation are the only parties to the
merger;
(3) each share or a fraction of a share of stock of the
corporation outstanding immediately prior to the effectiveness of
the merger is converted in the merger into a share or fraction of
share of capital stock of the holding company having the same
designations, preferences, limitations, and relative rights as a
share of stock of the corporation being converted in the merger;
(4) the holding company and the corporation are
domestic corporations and the direct or indirect wholly owned
subsidiary that is the other party to the merger is a domestic
corporation or domestic limited liability company;
(5) the articles of incorporation and bylaws of the
holding company immediately following the effective time of the
merger contain provisions identical to the articles of
incorporation and bylaws of the corporation immediately prior to
the effective time of the merger (other than provisions, if any,
regarding the incorporator or incorporators, the corporate name,
the registered office and agent, the initial board of directors,
and the initial subscribers of shares and such provisions contained
in any amendment to the certificate as were necessary to effect a
change, exchange, reclassification, or cancellation of shares, if
such change, exchange, reclassification, or cancellation has
become effective);
(6) the organizational documents [articles of
incorporation] and bylaws of the surviving entity [corporation]
immediately following the effective time of the merger contain
provisions identical to the organizational documents [articles of
incorporation] and bylaws of the corporation immediately prior to
the effective time of the merger (other than provisions, if any,
regarding the incorporator or incorporators, the corporate or
entity name, the registered office and agent, the initial board of
directors, and the initial subscribers of shares, references to
members rather than shareholders, references to interests, units,
or similar property rather than stock or shares, references to
managers, managing members, or other members of the governing body
rather than directors, and such provisions contained in any
amendment to the certificate as were necessary to effect a change,
exchange, reclassification, or cancellation of shares, if such
change, exchange, reclassification, or cancellation has become
effective); provided, however, that:
(a) if the organizational documents [articles of
incorporation] of the surviving entity do not contain the following
provisions, they [corporation] shall be amended in the merger to
contain provisions [a provision] requiring that:
(i) any act or transaction by or involving a
surviving entity [corporation], other than the election or removal
of directors or managers, managing members, or other members of the
governing body of the surviving entity, that requires for its
approval under this Act or its organizational documents [the
corporation's articles of incorporation] the approval of
shareholders or members of the surviving entity [corporation]
shall, by specific reference to this section, require the approval
of the shareholders of the holding company (or any successor by
merger) by the same vote as is required by this Act or by [and] the
organizational documents [articles of incorporation] of the
surviving entity;
(ii) a surviving entity that is not a
corporation obtain the approval of the shareholders of the holding
company for any act or transaction by or involving the surviving
entity, other than the election or removal of directors or
managers, managing members, or other members of the governing body
of the surviving entity, that would require the approval of the
shareholders of the surviving entity if the surviving entity were a
corporation subject to this Act;
(iii) any amendment of the organizational
documents of a surviving entity that is not a corporation, that
would, if adopted by a corporation subject to this Act, be required
to be included in the articles of incorporation of the corporation,
shall also require, by specific reference to this section, the
approval of the shareholders of the holding company, or any
successor by merger, by the same vote as is required by this Act or
by the organizational documents of the surviving entity; and
(iv) the business affairs of a surviving
entity that is not a corporation shall be managed by or under the
direction of a board of directors, board of managers, or other
governing body consisting of individuals who are subject to the
same fiduciary duties applicable to directors of a corporation
subject to this Act, and who are liable for breach of the duties to
the same extent as directors of a corporation subject to this Act
[corporation]; [and]
(b) the organizational documents [articles of
incorporation] of the surviving entity [corporation] may be amended
in the merger to change the classes and series of shares and the
number of shares that the surviving entity [corporation] is
authorized to issue; and
(c) Subsection (6)(a) of this section or a
provision of a surviving entity's organizational documents
required by Subdivision (a) may not be construed as requiring
approval of the shareholders of the holding company to elect or
remove directors, managers, managing members, or other members of
the governing body of the surviving entity.
H-1. The term "organizational documents," as used in
Section H(6) of this article, means:
(1) in reference to a corporation, the articles of
incorporation of the corporation; or
(2) in reference to a limited liability company, the
limited liability company agreement of the limited liability
company.
M. To the extent a shareholder of a corporation has standing
to institute or maintain derivative litigation on behalf of the
corporation immediately before a merger, nothing in this article
may be construed to limit or extinguish the shareholder's standing.
SECTION 28. Section A, Article 5.06, Texas Business
Corporation Act, is amended to read as follows:
A. When a merger takes effect:
(1) the separate existence of every domestic
corporation that is a party to the merger, except any surviving or
new domestic corporation, shall cease;
(2) all rights, title and interests to all real estate
and other property owned by each domestic or foreign corporation
and by each other entity that is a party to the merger shall be
allocated to and vested in one or more of the surviving or new
domestic or foreign corporations and other entities as provided in
the plan of merger without reversion or impairment, without further
act or deed, and without any transfer or assignment having
occurred, but subject to any existing liens or other encumbrances
thereon;
(3) all liabilities and obligations of each domestic
or foreign corporation and other entity that is a party to the
merger shall be allocated to one or more of the surviving or new
domestic or foreign corporations and other entities in the manner
set forth in the plan of merger, and each surviving or new domestic
or foreign corporation, and each surviving or new other entity to
which a liability or obligation shall have been allocated pursuant
to the plan of merger, shall be the primary obligor therefor and,
except as otherwise set forth in the plan of merger or as otherwise
provided by law or contract, no other party to the merger, other
than a surviving domestic or foreign corporation or other entity
liable thereon at the time of the merger and no other new domestic
or foreign corporation or other entity created thereby, shall be
liable therefor;
(4) a proceeding pending by or against any domestic or
foreign corporation or by or against any other entity that is a
party to the merger may be continued as if the merger did not occur,
or the surviving or new domestic or foreign corporation or
corporations or the surviving or new other entity or other entities
to which the liability, obligation, asset or right associated with
such proceeding is allocated to and vested in pursuant to the plan
of merger may be substituted in the proceeding;
(5) the articles of incorporation of each surviving
corporation shall be amended to the extent provided in the plan of
merger;
(6) each new domestic corporation, the articles of
incorporation of which are set forth in the plan of merger pursuant
to Article 5.01 of this Act, shall be incorporated as a corporation
under this Act; and each other entity to be incorporated or
organized under the laws of this State, the organizational
documents of which are set forth in the plan of merger[,] shall,
upon an executed copy of the articles of merger being delivered to
or filed with any required governmental entity with which
organizational documents of such other entity are required to be
delivered or filed, and upon meeting such additional requirements,
if any, of law for its incorporation or organization, shall be
incorporated or organized as provided in the plan of merger; and
(7) the shares of each domestic or foreign corporation
and the shares or evidences of ownership in each other entity that
is a party to the merger that are to be converted or exchanged, in
whole or part, into shares, obligations, evidences of ownership,
rights to purchase securities or other securities of one or more of
the surviving or new domestic or foreign corporations or other
entities, into cash or other property, including shares,
obligations, evidences of ownership, rights to purchase securities
or other securities of any other person or entity, or into any
combination of the foregoing, shall be so converted and exchanged
and the former holders of the shares of each domestic corporation
that is a party to the merger shall be entitled only to the rights
provided in the plan [articles] of merger or to their rights under
Article 5.11 of this Act.
SECTION 29. Section B, Article 5.11, Texas Business
Corporation Act, is amended to read as follows:
B. Notwithstanding the provisions of Section A of this
Article, a shareholder shall not have the right to dissent from any
plan of merger in which there is a single surviving or new domestic
or foreign corporation, or from any plan of exchange, if:
(1) the shares, or depository receipts in respect of
the shares, held by the shareholder are part of a class or series,
shares, or depository receipts in respect of the shares, of which
are on the record date fixed to determine the shareholders entitled
to vote on the plan of merger or plan of exchange:
(a) listed on a national securities exchange;
(b) listed on the Nasdaq Stock Market (or
successor quotation system) or designated as a national market
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc., or successor entity; or
(c) held of record by not less than 2,000
holders;
(2) the shareholder is not required by the terms of the
plan of merger or plan of exchange to accept for the shareholder's
shares any consideration that is different than the consideration
(other than cash in lieu of fractional shares that the shareholder
would otherwise be entitled to receive) to be provided to any other
holder of shares of the same class or series of shares held by such
shareholder; and
(3) the shareholder is not required by the terms of the
plan of merger or the plan of exchange to accept for the
shareholder's shares any consideration other than:
(a) shares, or depository receipts in respect of
the shares, of a domestic or foreign corporation that, immediately
after the effective time of the merger or exchange, will be part of
a class or series, shares, or depository receipts in respect of the
shares, of which are:
(i) listed, or authorized for listing upon
official notice of issuance, on a national securities exchange;
(ii) approved for quotation as a national
market security on an interdealer quotation system by the National
Association of Securities Dealers, Inc., or successor entity; or
(iii) held of record by not less than 2,000
holders;
(b) cash in lieu of fractional shares otherwise
entitled to be received; or
(c) any combination of the securities and cash
described in Subdivisions (a) and (b) of this subsection.
SECTION 30. Section A, Article 5.16, Texas Business
Corporation Act, is amended to read as follows:
A. In any case in which at least ninety (90%) per cent of the
outstanding shares of each class and series of shares, membership
interests, or other ownership interests of one or more domestic or
foreign corporations or other entities, other than a corporation
that has in its articles of incorporation the provision required by
Article 5.03(H)(6)(a) of this Act, of which there are outstanding
shares that would be entitled to vote on the merger absent this
section, is owned by another domestic or foreign corporation or
other entity, and at least one of the parent or subsidiary entities
is a domestic corporation and the other or others are domestic
corporations, foreign corporations, or other entities organized
under the laws of a jurisdiction that permit such a merger or whose
organizational documents or other constituent documents not
inconsistent with those laws permit such a merger, the corporation
or other entity [having such share ownership] may enter into a
merger [(1) merge such other domestic or foreign corporation or
corporations or other entities into itself, (2) merge itself into
any one or more of such other corporations or other entities, or (3)
merge itself and any one or more of such entities or corporations
into one or more of the other entities]:
(a) in the event that the corporation or other
entity having at least 90 percent ownership will be a surviving
entity in the merger, by executing and filing articles of merger in
accordance with Section B of this Article; or
(b) in the event that the corporation or other
entity having at least 90 percent ownership will not be a surviving
entity in the merger, by the entity having such ownership adopting a
plan of merger in the manner required by the laws of its
jurisdiction of organization or formation and its organizational or
other constituent documents, except that no action under Section
5.03 shall be required to be taken by the corporation or
corporations whose shares are so owned, and executing and filing
articles of merger in accordance with Section B of this Article.
SECTION 31. Section A, Article 6.04, Texas Business
Corporation Act, is amended to read as follows:
A. Before filing articles of dissolution:
(1) The corporation shall cease to carry on its
business, except insofar as may be necessary for the winding up
thereof.
(2) The corporation shall cause written notice by
registered or certified mail of its intention to dissolve to be
mailed to each known claimant against the corporation.
(3) The directors of the corporation shall manage the
process of winding up the business or affairs of the corporation.
The corporation shall proceed to collect its assets, dispose of
such of its properties as are not to be distributed in kind to its
shareholders, pay, satisfy, or discharge all its debts,
liabilities, and obligations, or make adequate provision for
payment, satisfaction, or discharge thereof, and do all other acts
required to liquidate its business and affairs, except that if the
properties and assets of the corporation are not sufficient to pay,
satisfy, or discharge all the corporation's debts, liabilities, and
obligations, the corporation shall apply its properties and assets
so far as they will go to the just and equitable payment,
satisfaction, or discharge of its debts, liabilities, and
obligations or shall make adequate provision for such application.
After paying, satisfying, or discharging all its debts,
liabilities, and obligations, or making adequate provision for
payment, satisfaction, or discharge thereof, the corporation shall
then distribute the remainder of its properties and assets, either
in cash or in kind, to its shareholders according to their
respective rights and interests.
(4) The corporation, at any time during the
liquidation of its business and affairs, may make application to
any district court of this State in the county in which the
registered office of the corporation is situated to have the
liquidation continued under the supervision of such court as
provided in this Act.
SECTION 32. Section A, Article 8.05, Texas Business
Corporation Act, is amended to read as follows:
A. In order to procure a certificate of authority to
transact business in this State, a foreign corporation shall make
application therefor to the Secretary of State, which application
shall set forth:
(1) The name of the corporation and the State or
country under the laws of which it is incorporated.
(2) If the name of the corporation does not contain the
word "corporation," "company," "incorporated," or "limited," and
does not contain an abbreviation of one (1) of such words, then the
name of the corporation with the word or abbreviation which it
elects to add thereto for use in this State; if the corporation is
required to qualify under a name other than its corporate name, then
the name under which the corporation is to be qualified.
(3) The date of incorporation and the period of
duration of the corporation.
(4) The address of the principal office of the
corporation in the state or country under the laws of which it is
incorporated.
(5) The address of the registered office of the
corporation in this State, and the name of its registered agent in
this State at such address.
(6) The purpose or purposes of the corporation which
it proposes to pursue in the transaction of business in this State
and a statement that it is authorized to pursue such purpose or
purposes in the state or country under the laws of which it is
incorporated.
(7) The names and respective addresses of the
directors and officers of the corporation.
(8) A statement that the corporation exists as a valid
corporation under the laws of the corporation's jurisdiction of
formation [of the aggregate number of shares which the corporation
has authority to issue, itemized by classes, par value of shares,
shares without par value, and series, if any, within a class].
[(9) A statement of the aggregate number of issued
shares itemized by classes, par value of shares, shares without par
value, and series, if any, within a class.
[(10) A statement, expressed in dollars, of the amount
of stated capital of the corporation, as defined in this Act.
[(11) A statement that consideration of the value of
at least One Thousand Dollars ($1,000) has been paid for the
issuance of shares.]
SECTION 33. Section A, Article 8.06, Texas Business
Corporation Act, is amended to read as follows:
A. The original and a copy of the application of the
corporation for a certificate of authority shall be delivered to
the Secretary of State[, together with a certificate issued by an
authorized officer of the jurisdiction of the corporation's
incorporation evidencing its corporate existence. If the
certificate is in a language other than English, a translation of
the certificate, under the oath of the translator, must be attached
to the certificate. The certificate must be dated after the 91st
day preceding the date on which the application is filed]. If the
Secretary of State finds that the application conforms 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 in his office the original [and the
certificate evidencing corporate existence].
(3) Issue a certificate of authority to transact
business in this State to which he shall affix the copy.
SECTION 34. Article 9.09, Texas Business Corporation Act,
is amended to read as follows:
Art. 9.09. WAIVER OF NOTICE. [A.] Whenever any notice is
required to be given to any shareholder or director of a corporation
under the provisions of this Act or under the provisions of the
articles of incorporation or bylaws of the corporation, a waiver
thereof in writing signed by the person or persons entitled to such
notice, or a waiver by electronic transmission by the person
entitled to notice, whether before or after the time stated
therein, shall be equivalent to the giving of such notice. The
business to be transacted at a regular or special meeting of the
shareholders, directors, or members of a committee of directors or
the purpose of a meeting is not required to be specified in a
written waiver of notice or a waiver by electronic transmission
unless required by the articles of incorporation or the bylaws.
SECTION 35. Sections A and B, Article 9.10, Texas Business
Corporation Act, are amended to read as follows:
A.(1) Any action required by this Act to be taken at any
annual or special meeting of shareholders, or any action which may
be taken at any annual or special meeting of shareholders, may be
taken without a meeting, without prior notice, and without a vote,
if a consent or consents in writing, setting forth the action so
taken, shall have been signed by the holder or holders of all the
shares entitled to vote with respect to the action that is the
subject of the consent. The articles of incorporation may provide
that any action required by this Act to be taken at any annual or
special meeting of shareholders, or any action which may be taken at
any annual or special meeting of shareholders, may be taken without
a meeting, without prior notice, and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be
signed by the holder or holders of [or] shares having not less than
the minimum number of votes that would be necessary to take such
action at a meeting at which [the] holders of all shares entitled to
vote on the action were present and voted.
(2) Every written consent signed by the holders of
less than all the shares entitled to vote with respect to the action
that is the subject of the consent shall bear the date of signature
of each shareholder who signs the consent. No written consent
signed by the holder [holders] of less than all the shares entitled
to vote with respect to the action that is the subject of the
consent shall be effective to take the action that is the subject of
the consent unless, within 60 days after the date of the earliest
dated consent delivered to the corporation in a [the] manner
required by this Article, a consent or consents signed by the holder
or holders of shares having not less than the minimum number of
votes that would be necessary to take the action that is the subject
of the consent are delivered to the corporation by delivery to its
registered office, registered agent, principal place of business,
transfer agent, registrar, exchange agent or an officer or agent of
the corporation having custody of the books in which proceedings of
meetings of shareholders are recorded. Delivery shall be by hand or
certified or registered mail, return receipt requested. Delivery
to the corporation's principal place of business shall be addressed
to the president or principal executive officer of the corporation.
(3) A telegram, telex, cablegram, or other electronic
[similar] transmission by a shareholder consenting to an action to
be taken is considered to be written, signed, and dated for the
purposes of this article if the transmission sets forth or is
delivered with information from which the corporation can determine
that the transmission was transmitted by the shareholder and the
date on which the shareholder transmitted the transmission. The
date of transmission is the date on which the consent was signed.
Consent given by telegram, telex, cablegram, or other electronic
transmission may not be considered delivered until the consent is
reproduced in paper form and the paper form is delivered to the
corporation at its registered office in this state or its principal
place of business, or to an officer or agent of the corporation
having custody of the book in which proceedings of shareholder
meetings are recorded. Notwithstanding Subsection (2) of this
section, consent given by telegram, telex, cablegram, or other
electronic transmission may be delivered to the principal place of
business of the corporation or to an officer or agent of the
corporation having custody of the book in which proceedings of
shareholder meetings are recorded to the extent and in the manner
provided by resolution of the board of directors of the
corporation.
(4) Any[, or a] photographic, photostatic, facsimile,
or similarly reliable [similar] reproduction of a consent in
writing signed by a shareholder may be substituted or used instead
of the original writing for any purpose for which the original
writing could be used, if the reproduction is a complete
reproduction of the entire original writing [, shall be regarded as
signed by the shareholder for purposes of this Section].
(5) [(4)] Prompt notice of the taking of any action by
shareholders without a meeting by less than unanimous written
consent shall be given to those shareholders who did not consent in
writing to the action.
(6) [(5)] If any action by shareholders is taken by
written consent, any articles or documents filed with the Secretary
of State as a result of the taking of the action shall state, in lieu
of any statement required by the [this] Act concerning the number of
shares outstanding and entitled to vote on the action or concerning
any vote of shareholders, that written consent has been given in
accordance with the provisions of this Article and that any written
notice required by this Article has been given.
B. Unless otherwise restricted by the articles of
incorporation or bylaws [by-laws], any action required or permitted
to be taken at a meeting of the board of directors or any committee
may be taken without a meeting if a consent in writing, setting
forth the action so taken, is signed by all the members of the board
of directors or committee, as the case may be. A telegram, telex,
cablegram, or other electronic transmission by a director
consenting to an action to be taken and transmitted by a director is
considered written, signed, and dated for the purposes of this
article if the transmission sets forth or is delivered with
information from which the corporation can determine that the
transmission was transmitted by the director and the date on which
the director transmitted the transmission. Such consent shall have
the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the
Secretary of State.
SECTION 36. Section A, Article 9.14, Texas Business
Corporation Act, is amended to read as follows:
A. This Act applies to each domestic corporation and to each
foreign corporation that is transacting business in this state,
regardless of whether the foreign corporation is registered to
transact business in this state. This Act does not apply to
domestic corporations organized under any statute other than this
Act or to any foreign corporations granted authority to transact
business within this State under any statute other than this Act;
provided, however, that if any domestic corporation was heretofore
or is hereafter organized under or is governed by a statute other
than this Act or the Texas Non-Profit Corporation Act (Article
1396-1.01 et seq., Vernon's Texas Civil Statutes) that contains no
provisions in regard to some of the matters provided for in this
Act, or any foreign corporation was heretofore or is hereafter
granted authority to transact business within this State under a
statute other than this Act or the Texas Non-Profit Corporation Act
that contains no provisions in regard to some of the matters
provided for in this Act in respect of foreign corporations, or if
such a statute specifically provides that the general laws for
incorporation or for the granting of a certificate of authority to
transact business in this State, as the case may be, shall
supplement the provisions of such statute, then the provisions of
this Act shall apply to the extent that they are not inconsistent
with the provisions of such other statute; provided further,
however, that this Act shall not apply to any domestic corporation
organized under or governed by the Texas Non-Profit Corporation Act
or any foreign corporation granted authority to transact business
within this State under the Texas Non-Profit Corporation Act.
SECTION 37. Section A(4), Article 13.02, Texas Business
Corporation Act, is amended to read as follows:
(4) "Business combination" means:
(a) any merger, share exchange, or conversion of
an issuing public corporation or a subsidiary with:
(i) an affiliated shareholder;
(ii) a foreign or domestic corporation or
other entity that is, or after the merger, share exchange, or
conversion would be, an affiliate or associate of the affiliated
shareholder; or
(iii) another domestic or foreign
corporation or other entity, if the merger, share exchange, or
conversion is caused by an affiliated shareholder, or an affiliate
or associate of an affiliated shareholder, and as a result of the
merger, share exchange, or conversion this part does not apply to
the surviving corporation or other entity;
(b) a sale, lease, exchange, mortgage, pledge,
transfer, or other disposition, in one transaction or a series of
transactions, including an allocation of assets pursuant to a
merger, to or with the affiliated shareholder, or an affiliate or
associate of the affiliated shareholder, of assets of the issuing
public corporation or any subsidiary that:
(i) have an aggregate market value equal to
10 percent or more of the aggregate market value of all the assets,
determined on a consolidated basis, of the issuing public
corporation;
(ii) have an aggregate market value equal
to 10 percent or more of the aggregate market value of all the
outstanding voting shares [common stock] of the issuing public
corporation; or
(iii) represent 10 percent or more of the
earning power or net income, determined on a consolidated basis, of
the issuing public corporation;
(c) the issuance or transfer by an issuing public
corporation or a subsidiary to an affiliated shareholder or an
affiliate or associate of the affiliated shareholder, in one
transaction or a series of transactions, of shares of the issuing
public corporation or a subsidiary, except by the exercise of
warrants or rights to purchase shares of the issuing public
corporation offered, or a share dividend paid, pro rata to all
shareholders of the issuing public corporation after the affiliated
shareholder's share acquisition date;
(d) the adoption of a plan or proposal for the
liquidation or dissolution of an issuing public corporation
proposed by, or pursuant to any agreement, arrangement, or
understanding, whether or not in writing, with an affiliated
shareholder or an affiliate or associate of the affiliated
shareholder;
(e) a reclassification of securities, including
a reverse share split or a share split-up, share dividend, or other
distribution of shares, a recapitalization of the issuing public
corporation, a merger of the issuing public corporation with a
subsidiary or pursuant to which the assets and liabilities of the
issuing public corporation are allocated among two or more
surviving or new domestic or foreign corporations or other
entities, or any other transaction, whether or not with, into, or
otherwise involving the affiliated shareholder, proposed by, or
pursuant to an agreement, arrangement, or understanding, whether or
not in writing, with an affiliated shareholder or an affiliate or
associate of the affiliated shareholder that has the effect,
directly or indirectly, of increasing the proportionate ownership
percentage of the outstanding shares of a class or series of voting
shares or securities convertible into voting shares of the issuing
public corporation that is beneficially owned by the affiliated
shareholder or an affiliate or associate of the affiliated
shareholder, except as a result of immaterial changes due to
fractional share adjustments; or
(f) the direct or indirect receipt by an
affiliated shareholder or an affiliate or associate of the
affiliated shareholder of the benefit of a loan, advance,
guarantee, pledge, or other financial assistance or a tax credit or
other tax advantage provided by or through the issuing public
corporation, except proportionately as a shareholder of the issuing
public corporation.
SECTION 38. Section B, Article 13.07, Texas Business
Corporation Act, is amended to read as follows:
B. The affirmative vote or concurrence of shareholders
required for approval of an action required or permitted to be
submitted for shareholder vote under Part 13 of this Act may be
increased, but not decreased, under Article 2.28 of this Act.
SECTION 39. The following laws are repealed:
(1) Section B, Article 2.14, Texas Business
Corporation Act;
(2) Article 3.05, Texas Business Corporation Act;
(3) Sections B and C, Article 4.10, Texas Business
Corporation Act;
(4) Sections B and C, Article 4.11, Texas Business
Corporation Act;
(5) Sections B and C, Article 4.12, Texas Business
Corporation Act;
(6) Article 2.01, Texas Miscellaneous Corporation
Laws Act (Article 1302-2.01, Vernon's Texas Civil Statutes);
(7) Article 2.02, Texas Miscellaneous Corporation
Laws Act (Article 1302-2.02, Vernon's Texas Civil Statutes);
(8) Article 2.03, Texas Miscellaneous Corporation
Laws Act (Article 1302-2.03, Vernon's Texas Civil Statutes);
(9) Article 2.04, Texas Miscellaneous Corporation
Laws Act (Article 1302-2.04, Vernon's Texas Civil Statutes);
(10) Article 2.09, Texas Miscellaneous Corporation
Laws Act (Article 1302-2.09, Vernon's Texas Civil Statutes);
(11) Article 2.09A, Texas Miscellaneous Corporation
Laws Act (Article 1302-2.02.09A, Vernon's Texas Civil Statutes);
(12) Article 2.10, Texas Miscellaneous Corporation
Laws Act (Article 1302-2.10, Vernon's Texas Civil Statutes);
(13) Article 3.02, Texas Miscellaneous Corporation
Laws Act (Article 1302-3.02, Vernon's Texas Civil Statutes); and
(14) Article 3.03, Texas Miscellaneous Corporation
Laws Act (Article 1302-3.03, Vernon's Texas Civil Statutes).
SECTION 40. This Act takes effect September 1, 2003.