Art. 2.30-1. Shareholder Agreements A. Scope of Agreement. An agreement among the shareholders of a corporation that complies with this article is effective among the shareholders and the corporation even though it is inconsistent with one or more provisions of this Act in that it: (1) restricts the discretion or powers of the board of directors; (2) eliminates the board of directors and permits management of the business and affairs of the corporation by its shareholders, or in whole or in part by one or more of its shareholders, or by one or more persons not shareholders; (3) establishes the natural persons who shall be the directors or officers of the corporation, their term of office or manner of selection or removal, or terms or conditions of employment of any director, officer, or other employee of the corporation, regardless of the length of employment; (4) governs the authorization or making of distributions whether in proportion to ownership of shares, subject to the limitations in Article 2.38 of this Act, or determines the manner in which profits and losses shall be apportioned; (5) governs, in general or in regard to specific matters, the exercise or division of voting power by and between the shareholders, directors (if any), or other persons or by or among any of them, including use of disproportionate voting rights or director proxies; (6) establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer, or employee of the corporation, or other person or among any of them; (7) authorizes arbitration or grants authority to any shareholder or other person as to any issue about which there is a deadlock among the directors, shareholders, or other person or persons empowered to manage the corporation to resolve that issue; (8) requires dissolution of the corporation at the request of one or more of the shareholders or on the occurrence of a specified event or contingency, in which case the dissolution of the corporation shall proceed as if all the shareholders had consented in writing to dissolution of the corporation as provided in Article 6.02 of this Act; or (9) otherwise governs the exercise of corporate powers, the management of the business and affairs of the corporation, or the relationship among the shareholders, the directors, and the corporation, or among any of them, as if the corporation were a partnership or in a manner that would otherwise be appropriate only among partners, and is not contrary to public policy. B. Procedures Required. An agreement authorized by this article shall be: (1) set forth (a) in the articles of incorporation or bylaws and approved by all persons who are shareholders at the time of the agreement, or (b) in a written agreement that is signed by all the persons who are shareholders at the time of the agreement and is made known to the corporation; (2) subject to amendment only by all persons who are shareholders at the time of the amendment, unless the agreement provides otherwise; and (3) valid for 10 years, unless the agreement provides otherwise. C. Notation of Existence. The existence of an agreement authorized by this article shall be noted conspicuously on the front or back of each certificate for outstanding shares or on the information statement required for uncertificated shares by Article 2.19 of this Act and shall include the following: "These shares are subject to the provisions of a shareholders' agreement that may provide for management of the corporation in a manner different than in other corporations and may subject a shareholder to certain obligations or liabilities not otherwise imposed on shareholders in other corporations." If at the time of the agreement the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this section. The failure to note the existence of the agreement on the certificate or information statement shall not affect the validity of the agreement or any action taken pursuant to it. D. Right of Rescission. Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of an agreement authorized by this article shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares in compliance with Section C of this article and, if the shares are not represented by a certificate, the information statement noting existence of the agreement is delivered to the purchaser at or prior to the time of purchase of the shares. An action to enforce the right of rescission authorized by this section must be commenced within the earlier of 90 days after discovery of the existence of the agreement or two years after time of the purchase of the shares. E. Cessation. An agreement authorized by this article shall cease to be effective when shares of the corporation are listed on a national securities exchange, quoted on an interdealer quotation system of a national securities association, or regularly traded in a market maintained by one or more members of a national or affiliated securities association. If the agreement ceases to be effective for any reason and the corporation does not have a board of directors, governance by a board of directors shall be instituted or reinstated in the manner provided in Section C, Article 12.23, of this Act. If the agreement is contained or referred to in the corporation's articles of incorporation or bylaws, the board of directors may adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete the agreement and any references to it. F. Managerial Liabilities. An agreement authorized by this article that limits the discretion or powers of the board of directors or supplants the board of directors shall relieve the directors of, and impose on the person or persons in whom such discretion or powers or management of the business and affairs of the corporation are vested, liability for action or omissions imposed by this Act or other law on directors to the extent that the discretion or powers of the directors are limited or supplanted by the agreement. G. Limitation of Liability. The existence or performance of an agreement authorized by this article shall not be grounds for imposing personal liability on any shareholder for the acts or obligations of the corporation by disregarding the separate entity of the corporation or otherwise, even if the agreement or its performance: (1) treats the corporation as if it were a partnership or in a manner that otherwise is appropriate only among partners; (2) results in the corporation being considered a partnership for purposes of taxation; or (3) results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement. H. If No Shares Issued. Incorporators or subscribers for the shares may act as shareholders with respect to an agreement authorized by this article if no shares have been issued when the agreement is signed. Added by Acts 1997, 75th Leg., ch. 375, Sec. 10, eff. Sept. 1, 1997.

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Last modified: August 10, 2007