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C. Repealed by Acts 1975, 64th Leg., p. 322, ch. 134, Sec. 22, eff.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