2005 Texas Code - Business Corporation Act ARTICLE 5.01. MERGER

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C. Repealed by Acts 1975, 64th Leg., p. 322, ch. 134, Sec. 22, eff.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.