BUSINESS ORGANIZATIONS CODE
TITLE 5. REAL ESTATE INVESTMENT TRUSTS
CHAPTER 200. REAL ESTATE INVESTMENT TRUSTS
SUBCHAPTER A. GENERAL PROVISIONS
§ 200.001. DEFINITION. In this chapter, "real estate
investment trust" means an unincorporated trust:
(1) formed by one or more trust managers under this
chapter and Chapter 3; and
(2) managed under this chapter.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.002. APPLICABILITY OF CHAPTER. (a) The
provisions of Chapters 20 and 21 govern a matter to the extent that
this chapter or Title 1 does not govern the matter.
(b) An unincorporated trust that does not meet the
requirements of this chapter is an unincorporated association.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.003. CONFLICT WITH OTHER LAW. In case of conflict
between this chapter and Chapters 20 and 21, this chapter controls.
Chapters 20 and 21 do not control over this chapter merely because a
provision of Chapter 20 or 21 is more or less extensive,
restrictive, or detailed than a similar provision of this chapter.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.004. ULTRA VIRES ACTS. (a) Lack of capacity of a
real estate investment trust may not be the basis of any claim or
defense at law or in equity.
(b) An act of a real estate investment trust or a transfer of
property by or to a real estate investment trust is not invalid
because the act or transfer was:
(1) beyond the scope of the purpose or purposes of the
real estate investment trust as expressed in the real estate
investment trust's certificate of formation; or
(2) inconsistent with a limitation on the authority of
an officer or trust manager to exercise a statutory power of the
real estate investment trust, as that limitation is expressed in
the real estate investment trust's certificate of formation.
(c) The fact that an act or transfer is beyond the scope of
the expressed purpose or purposes of the real estate investment
trust or is inconsistent with an expressed limitation on the
authority of an officer or trust manager may be asserted in a
proceeding:
(1) by a shareholder against the real estate
investment trust to enjoin the performance of an act or the transfer
of property by or to the real estate investment trust; or
(2) by the real estate investment trust, acting
directly or through a receiver, trustee, or other legal
representative, or through shareholders in a representative suit,
against an officer or trust manager or former officer or trust
manager of the real estate investment trust for exceeding that
person's authority.
(d) If the unauthorized act or transfer sought to be
enjoined under Subsection (c)(1) is being or is to be performed or
made under a contract to which the real estate investment trust is a
party and if each party to the contract is a party to the
proceeding, the court may set aside and enjoin the performance of
the contract. The court may award to the real estate investment
trust or to another party to the contract, as appropriate,
compensation for loss or damage resulting from the action of the
court in setting aside and enjoining the performance of the
contract, excluding loss of anticipated profits.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.005. SUPPLEMENTARY POWERS OF REAL ESTATE
INVESTMENT TRUST. (a) Subject to Section 2.113(a) and in
addition to the powers specified in Section 2.101, a real estate
investment trust may engage in activities mandated or authorized
by:
(1) provisions of the Internal Revenue Code that are
related to or govern real estate investment trusts; and
(2) regulations adopted under the Internal Revenue
Code.
(b) This section does not authorize a real estate investment
trust or an officer or trust manager of a real estate investment
trust to exercise a power in a manner inconsistent with a limitation
on the purposes or powers of the real estate investment trust
contained in:
(1) the trust's certificate of formation;
(2) this code; or
(3) another law of this state.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.006. REQUIREMENT THAT FILING INSTRUMENT BE SIGNED
BY OFFICER. Unless otherwise provided by this chapter, a filing
instrument of a real estate investment trust may be signed by an
officer of the real estate investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER B. FORMATION AND GOVERNING DOCUMENTS
§ 200.051. DECLARATION OF TRUST. For purposes of this
code, the certificate of formation of a real estate investment
trust is a declaration of trust. The certificate of formation may
be titled "declaration of trust" or "certificate of formation."
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.052. NO PROPERTY RIGHT IN CERTIFICATE OF
FORMATION. A shareholder of a real estate investment trust does
not have a vested property right resulting from the certificate of
formation, including a provision in the certificate of formation
relating to the management, control, capital structure, dividend
entitlement, purpose, or duration of the real estate investment
trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.053. PROCEDURES TO ADOPT AMENDMENT TO CERTIFICATE
OF FORMATION. (a) To adopt an amendment to the certificate of
formation of a real estate investment trust as provided by
Subchapter B, Chapter 3, the trust managers shall:
(1) adopt a resolution stating the proposed amendment;
and
(2) follow the procedures prescribed by Sections
200.054-200.056.
(b) The resolution may incorporate the proposed amendment
in a restated certificate of formation that complies with Section
3.059.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.054. ADOPTION OF AMENDMENT BY TRUST MANAGERS. If
a real estate investment trust does not have any issued and
outstanding shares, the trust managers may adopt a proposed
amendment to the real estate investment trust's certificate of
formation by resolution without shareholder approval.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.055. ADOPTION OF AMENDMENT BY SHAREHOLDERS. If a
real estate investment trust has issued and outstanding shares:
(1) a resolution described by Section 200.053 must
also direct that the proposed amendment be submitted to a vote of
the shareholders at a meeting; and
(2) the shareholders must approve the proposed
amendment in the manner provided by Section 200.056.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.056. NOTICE OF AND MEETING TO CONSIDER PROPOSED
AMENDMENT. (a) Each shareholder of record entitled to vote shall
be given written notice containing the proposed amendment or a
summary of the changes to be effected within the time and in the
manner provided by this code for giving notice of meetings to
shareholders. If the proposed amendment is to be considered at an
annual meeting, the proposed amendment or summary may be included
in the notice required to be provided for an annual meeting.
(b) At the meeting, the proposed amendment shall be adopted
only on receiving the affirmative vote of shareholders entitled to
vote required by Section 200.261.
(c) An unlimited number of amendments may be submitted for
adoption by the shareholders at a meeting.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.057. ADOPTION OF RESTATED CERTIFICATE OF
FORMATION. (a) A real estate investment trust may adopt a
restated certificate of formation as provided by Subchapter B,
Chapter 3, by following the same procedures to amend its
certificate of formation under Sections 200.053-200.056, except
that shareholder approval is not required if an amendment is not
adopted.
(b) If shares of the real estate investment trust have not
been issued and the restated certificate of formation is adopted by
the trust managers, the majority of the trust managers may sign the
restated certificate of formation on behalf of the real estate
investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.058. BYLAWS. (a) The trust managers of a real
estate investment trust shall adopt initial bylaws.
(b) The bylaws may contain provisions for the regulation and
management of the affairs of the real estate investment trust that
are consistent with law and the real estate investment trust's
certificate of formation.
(c) The trust managers of a real estate investment trust may
amend or repeal bylaws or adopt new bylaws unless:
(1) the real estate investment trust's certificate of
formation or this chapter wholly or partly reserves the power
exclusively to the real estate investment trust's shareholders; or
(2) in amending, repealing, or adopting a bylaw, the
shareholders expressly provide that the trust managers may not
amend, repeal, or readopt that bylaw.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.059. DUAL AUTHORITY. Unless the certificate of
formation or a bylaw adopted by the shareholders provides otherwise
as to all or a part of a real estate investment trust's bylaws, the
shareholders of a real estate investment trust may amend, repeal,
or adopt the bylaws of the real estate investment trust even if the
bylaws may also be amended, repealed, or adopted by the trust
managers of the real estate investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.060. ORGANIZATION MEETING. (a) After the real
estate investment trust has been formed, the initial trust managers
of the real estate investment trust shall hold an organization
meeting, at the call of a majority of those trust managers, for the
purpose of adopting bylaws, electing officers, and transacting
other business.
(b) Not later than the third day before the date of the
meeting, the initial trust managers calling the meeting shall send
notice of the time and place of the meeting to the other initial
trust managers named in the certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER C. SHARES
§ 200.101. NUMBER. A real estate investment trust may
issue the number of shares stated in the real estate investment
trust's certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.102. CLASSIFICATION OF SHARES. A real estate
investment trust may provide in the real estate investment trust's
certificate of formation:
(1) that a specified class of shares is preferred over
another class of shares as to its distributive share of the assets
on voluntary or involuntary liquidation of the real estate
investment trust;
(2) the amount of a preference described by
Subdivision (1);
(3) that a specified class of shares may be redeemed at
the option of the real estate investment trust or of the holders of
the shares;
(4) the terms and conditions of a redemption of shares
described by Subdivision (3), including the time and price of
redemption;
(5) that a specified class of shares may be converted
into shares of one or more other classes;
(6) the terms and conditions of a conversion described
by Subdivision (5);
(7) that a holder of a specified security issued or to
be issued by the real estate investment trust has voting or other
rights authorized by law; and
(8) for other preferences, rights, restrictions,
including restrictions on transferability, and qualifications
consistent with law.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.103. CLASSES OF SHARES ESTABLISHED BY TRUST
MANAGERS. (a) A real estate investment trust may provide in the
real estate investment trust's certificate of formation that the
trust managers may classify or reclassify any unissued shares by
setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of the shares.
(b) Before issuing shares, the trust managers who perform as
authorized by the certificate of formation an action described by
Subsection (a) must file with the county clerk of the county of the
principal place of business of the real estate investment trust a
statement of designation that contains:
(1) a description of the shares, including the
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption, as set or changed by the trust
managers; and
(2) a statement that the shares have been classified
or reclassified by the trust managers as authorized by the
certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.104. ISSUANCE OF SHARES. (a) A real estate
investment trust may issue shares for consideration if authorized
by the trust managers.
(b) Shares may not be issued until the consideration,
determined in accordance with this subchapter, has been paid to the
real estate investment trust or to another entity of which all of
the outstanding ownership interests are directly or indirectly
owned by the real estate investment trust. When the consideration
is paid:
(1) the shares are considered to be issued;
(2) the shareholder entitled to receive the shares is
a shareholder with respect to the shares; and
(3) the shares are considered fully paid and
nonassessable.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.105. TYPES OF CONSIDERATION FOR ISSUANCE OF
SHARES. Shares with or without par value may be issued by a real
estate investment trust for the following types of consideration:
(1) a tangible or intangible benefit to the real
estate investment trust;
(2) cash;
(3) a promissory note;
(4) services performed or a contract for services to
be performed;
(5) a security of the real estate investment trust or
any other organization; and
(6) any other property of any kind or nature.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.106. DETERMINATION OF CONSIDERATION FOR
SHARES. Consideration to be received by a real estate investment
trust for shares shall be determined by the trust managers.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.107. AMOUNT OF CONSIDERATION FOR ISSUANCE OF
SHARES WITH PAR VALUE. Consideration to be received by a real
estate investment trust for the issuance of shares with par value
may not be less than the par value of the shares.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.108. VALUE OF CONSIDERATION. In the absence of
fraud in the transaction, the judgment of the trust managers is
conclusive in determining the value of the consideration received
for the shares.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.109. LIABILITY OF ASSIGNEE OR TRANSFEREE. An
assignee or transferee of certificated shares, uncertificated
shares, or a subscription for shares in good faith and without
knowledge that full consideration for the shares or subscription
has not been paid may not be held personally liable to the real
estate investment trust or a creditor of the real estate investment
trust for an unpaid portion of the consideration.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.110. SUBSCRIPTIONS. (a) A real estate
investment trust may accept a subscription by notifying the
subscriber in writing.
(b) A subscription to purchase shares in a real estate
investment trust that is in the process of being formed is
irrevocable for six months if the subscription is in writing and
signed by the subscriber unless the subscription provides for a
longer or shorter period or all of the other subscribers agree to
the revocation of the subscription.
(c) A written subscription entered into after the real
estate investment trust is formed is a contract between the
subscriber and the real estate investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.111. PREFORMATION SUBSCRIPTION. (a) A real
estate investment trust may determine the payment terms of a
preformation subscription unless the payment terms are specified by
the subscription. The payment terms may authorize payment in full
on acceptance or by installments.
(b) Unless the subscription provides otherwise, a real
estate investment trust shall make calls placed to all subscribers
of similar interests for payment on preformation subscriptions
uniform as far as practicable.
(c) After the real estate investment trust is formed, if a
subscriber fails to pay any installment or call when due, the real
estate investment trust may:
(1) collect in the same manner as any other debt the
amount due on any unpaid preformation subscription; or
(2) forfeit the subscription if the installment or
call remains unpaid for 20 days after written notice to the
subscriber.
(d) Although the forfeiture of a subscription terminates
all the rights and obligations of the subscriber, the real estate
investment trust may retain any amount previously paid on the
subscription.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.112. COMMITMENT IN CONNECTION WITH PURCHASE OF
SHARES. (a) A person who contemplates the acquisition of shares
in a real estate investment trust may commit to act in a specified
manner with respect to the shares after the acquisition, including
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.
(b) A written commitment entered into under Subsection (a)
is a contract between the shareholder and the real estate
investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.113. SUPPLEMENTAL REQUIRED RECORDS. In addition
to the books and records required to be kept under Section 3.151, a
real estate investment trust must keep at its principal office or
place of business, or at the office of its transfer agent or
registrar, a record of the number of shares held by each
shareholder.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER D. SHAREHOLDER RIGHTS AND RESTRICTIONS
§ 200.151. REGISTERED HOLDERS AS OWNERS. Except as
otherwise provided by this code and subject to Chapter 8, Business &
Commerce Code, a real estate investment trust may consider the
person registered as the owner of a share in the share transfer
records of the real estate investment trust at a particular time,
including a record date set under Section 6.102, as the owner of
that share at that time for purposes of:
(1) voting the share;
(2) receiving distributions on the share;
(3) transferring the share;
(4) receiving notice, exercising rights of dissent and
appraisal, exercising or waiving a preemptive right, or giving
proxies with respect to that share; or
(5) entering into agreements with respect to that
share in accordance with Section 6.251 or 6.252 or with this
subchapter.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.152. NO STATUTORY PREEMPTIVE RIGHT UNLESS
SPECIFICALLY PROVIDED BY CERTIFICATE OF FORMATION. A shareholder
of a real estate investment trust does not have a preemptive right
to acquire securities except to the extent specifically provided by
the certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.153. CHARACTERIZATION AND TRANSFER OF SHARES AND
OTHER SECURITIES. Except as otherwise provided by this code, the
shares and other securities of a real estate investment trust are:
(1) personal property for all purposes; and
(2) transferable in accordance with Chapter 8,
Business & Commerce Code.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.154. RESTRICTION ON TRANSFER OF SHARES AND OTHER
SECURITIES. (a) A restriction on the transfer or registration of
transfer of a security may be imposed by:
(1) the real estate investment trust's certificate of
formation;
(2) the real estate investment trust's bylaws;
(3) a written agreement among two or more holders of
the securities; or
(4) a written agreement among one or more holders of
the securities and the real estate investment trust if:
(A) the real estate investment trust files a copy
of the agreement at the principal place of business or registered
office of the real estate investment trust; and
(B) the copy of the agreement is subject to the
same right of examination by a shareholder of the real estate
investment trust, in person or by agent, attorney, or accountant,
as the books and records of the real estate investment trust.
(b) A restriction imposed under Subsection (a) is not valid
with respect to a security issued before the restriction has been
adopted, unless the holder of the security voted in favor of the
restriction or is a party to the agreement imposing the
restriction.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.155. VALID RESTRICTION ON
TRANSFER. Notwithstanding Sections 200.154 and 200.157, a
restriction placed on the transfer or registration of transfer of a
security of a real estate investment trust is valid if the
restriction reasonably:
(1) obligates the holder of the restricted security to
offer a person, including the real estate investment trust or other
holders of securities of the real estate investment trust, an
opportunity to acquire the restricted security within a reasonable
time before the transfer;
(2) obligates the real estate investment trust, to the
extent provided by this code, or another person to purchase a
security that is the subject of an agreement relating to the
purchase and sale of the restricted security;
(3) requires the real estate investment trust or the
holders of a class of the real estate investment trust's securities
to consent to a proposed transfer of the restricted security or to
approve the proposed transferee of the restricted security for the
purpose of preventing a violation of law;
(4) prohibits the transfer of the restricted security
to a designated person or group of persons and the designation is
not manifestly unreasonable; or
(5) maintains a tax advantage to the real estate
investment trust, including maintaining its status as a real estate
investment trust under the relevant provisions of the Internal
Revenue Code and regulations adopted under the Internal Revenue
Code.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.156. BYLAW OR AGREEMENT RESTRICTING TRANSFER OF
SHARES OR OTHER SECURITIES. (a) A real estate investment trust
that has adopted a bylaw or is a party to an agreement that
restricts the transfer of the shares or other securities of the real
estate investment trust may file with the county clerk of the county
of the principal place of business of the real estate investment
trust a copy of the bylaw or agreement and a statement attached to
the copy that:
(1) contains the name of the real estate investment
trust;
(2) states that the attached copy of the bylaw or
agreement is a true and correct copy of the bylaw or agreement; and
(3) states that the filing has been authorized by the
trust managers or shareholders, as appropriate.
(b) After the statement is filed with the county clerk, the
bylaws or agreement restricting the transfer of shares or other
securities is a public record, and the fact that the statement has
been filed must be stated on a certificate representing the
restricted shares or securities if required by Section 3.202.
(c) A real estate investment trust that is a party to an
agreement restricting the transfer of the shares or other
securities of the real estate investment trust may make the
agreement part of the real estate investment trust's certificate of
formation without restating the provisions of the agreement in the
certificate of formation by complying with this code or amending
the certificate of formation. If the agreement alters the original
or amended certificate of formation, the altered provision must be
identified by reference or description in the certificate of
amendment. If the agreement is an addition to the original or
amended certificate of formation, the certificate of amendment must
state that fact.
(d) The certificate of amendment must:
(1) include a copy of the agreement restricting the
transfer of shares or other securities;
(2) state that the attached copy of the agreement is a
true and correct copy of the agreement; and
(3) state that inclusion of the certificate of
amendment as part of the certificate of formation has been
authorized in the manner required by this code to amend the
certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.157. ENFORCEABILITY OF RESTRICTION ON TRANSFER OF
CERTAIN SECURITIES. (a) A restriction placed on the transfer or
registration of the transfer of a security of a real estate
investment trust is specifically enforceable against the holder, or
a successor or transferee of the holder, if:
(1) the restriction is reasonable and noted
conspicuously on the certificate or other instrument representing
the security; or
(2) with respect to an uncertificated security, the
restriction is reasonable and a notation of the restriction is
contained in the notice sent with respect to the security under
Section 3.205.
(b) Unless noted in the manner specified by Subsection (a)
with respect to a certificate or other instrument or an
uncertificated security, an otherwise enforceable restriction is
ineffective against a transferee for value without actual knowledge
of the restriction at the time of the transfer or against a
subsequent transferee, regardless of whether the transfer is for
value. A restriction is specifically enforceable against a person
other than a transferee for value from the time the person acquires
actual knowledge of the restriction's existence.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.158. JOINT OWNERSHIP OF SHARES. (a) If shares
are registered on the books of a real estate investment trust in the
names of two or more persons as joint owners with the right of
survivorship and one of the owners dies, the real estate investment
trust may record on its books and effect the transfer of the shares
to a person, including the surviving joint owner, and pay any
distributions made with respect to the shares, as if the surviving
joint owner was the sole owner of the shares. The recording and
distribution authorized by this subsection must be made after the
death of a joint owner and before the real estate investment trust
receives actual written notice that a party other than a surviving
joint owner is claiming an interest in the shares or distribution.
(b) The discharge of a real estate investment trust from
liability under Section 200.160 and the transfer of full legal and
equitable title of the shares does not affect, reduce, or limit any
cause of action existing in favor of an owner of an interest in the
shares or distribution against the surviving owner.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.159. LIABILITY FOR DESIGNATING OWNER OF SHARES. A
real estate investment trust or an officer, trust manager,
employee, or agent of the real estate investment trust may not be
held liable for considering a person to be the owner of a share for a
purpose described by Section 200.151, regardless of whether the
person possesses a certificate for those shares.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.160. LIABILITY REGARDING JOINT OWNERSHIP OF
SHARES. A real estate investment trust that transfers shares or
makes a distribution to a surviving joint owner under Section
200.158 before the real estate investment trust has received a
written claim for the shares or distribution from another person is
discharged from liability for the transfer or payment.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.161. LIMITATION OF LIABILITY FOR
OBLIGATIONS. (a) A holder of shares, an owner of any beneficial
interest in shares, or a subscriber for shares whose subscription
has been accepted is not under an obligation to the real estate
investment trust or its obligees with respect to:
(1) the shares, other than the obligation to pay to the
real estate investment trust the full amount of consideration,
fixed in compliance with Sections 200.104-200.108, for which the
shares were or are to be issued;
(2) any contractual obligation of the real estate
investment trust on the basis that the holder, beneficial owner, or
subscriber is or was the alter ego of the real estate investment
trust or on the basis of actual or constructive fraud, a sham to
perpetrate a fraud, or other similar theory; or
(3) any obligation of the real estate investment trust
on the basis of the failure of the real estate investment trust to
observe any formality, including the failure to:
(A) comply with this code or the declaration of
trust or bylaws of the real estate investment trust; or
(B) observe any requirement prescribed by this
code or the declaration of trust or bylaws of the real estate
investment trust for acts to be taken by the real estate investment
trust or its trust managers or shareholders.
(b) Subsection (a)(2) does not prevent or limit the
liability of a holder, beneficial owner, or subscriber if the
obligee demonstrates that the holder, beneficial owner, or
subscriber caused the real estate investment trust to be used for
the purpose of perpetrating and did perpetrate an actual fraud on
the obligee primarily for the direct personal benefit of the
holder, beneficial owner, or subscriber.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.162. PREEMPTION OF LIABILITY. The liability of a
holder, beneficial owner, or subscriber of shares of a real estate
investment trust for an obligation that is limited by Section
200.161 is exclusive and preempts any other liability imposed for
that obligation under common law or otherwise.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.163. EXCEPTIONS TO LIMITATIONS. Section 200.161
or 200.162 does not limit the obligation of a holder, beneficial
owner, or subscriber to the obligee of the real estate investment
trust if that person:
(1) expressly assumes, guarantees, or agrees to be
personally liable to the obligee for the obligation; or
(2) is otherwise liable to the obligee for the
obligation under this code or other applicable statute.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.164. PLEDGEES AND TRUST ADMINISTRATORS. (a) A
pledgee or other holder of shares as collateral security is not
personally liable as a shareholder.
(b) An executor, administrator, conservator, guardian,
trustee, assignee for the benefit of creditors, or receiver is not
personally liable as a holder of or subscriber to shares of a real
estate investment trust.
(c) The estate and funds administered by an executor,
administrator, conservator, guardian, trustee, assignee for the
benefit of creditors, or receiver are liable for the full amount of
the consideration for which the shares were or are to be issued.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER E. DISTRIBUTIONS AND SHARE DIVIDENDS
§ 200.201. AUTHORITY FOR DISTRIBUTIONS. The trust
managers of a real estate investment trust may authorize a
distribution and the real estate investment trust may make a
distribution, subject to Section 200.202 and any restriction in the
certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.202. LIMITATIONS ON DISTRIBUTIONS. (a) A real
estate investment trust may not make a distribution:
(1) if the real estate investment trust would be
insolvent after the distribution; or
(2) that is more than the surplus of the real estate
investment trust.
(b) Notwithstanding Subsection (a)(2), if the net assets of
a real estate investment trust are not less than the amount of the
proposed distribution, the real estate investment trust may make a
distribution involving a purchase or redemption of its own shares
if the purchase or redemption is made by the real estate investment
trust to:
(1) eliminate fractional shares;
(2) collect or settle indebtedness owed by or to the
real estate investment trust;
(3) pay dissenting shareholders entitled to receive
payment for their shares under this chapter; or
(4) effect the purchase or redemption of redeemable
shares in accordance with this code.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.203. PRIORITY OF DISTRIBUTIONS. A real estate
investment trust's indebtedness that arises as a result of the
declaration of a distribution and a real estate investment trust's
indebtedness issued in a distribution are at parity with the real
estate investment trust's indebtedness to its general, unsecured
creditors, except to the extent the indebtedness is subordinated,
or payment of that indebtedness is secured, by agreement.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.204. RESERVES, DESIGNATIONS, AND ALLOCATIONS FROM
SURPLUS. (a) A real estate investment trust, by resolution of the
trust managers of the real estate investment trust, may:
(1) create a reserve out of the surplus of the real
estate investment trust; or
(2) designate or allocate in any manner a part or all
of the real estate investment trust's surplus for a proper purpose.
(b) A real estate investment trust may increase, decrease,
or abolish a reserve, designation, or allocation in the manner
provided by Subsection (a).
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.205. AUTHORITY FOR SHARE DIVIDENDS. The trust
managers of a real estate investment trust may authorize a share
dividend, and the real estate investment trust may pay a share
dividend subject to Section 200.206 and any restriction in the
certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.206. LIMITATIONS ON SHARE DIVIDENDS. (a) A real
estate investment trust may not pay a share dividend in authorized
but unissued shares of any class if the surplus of the real estate
investment trust is less than the amount required by Section
200.208 to be transferred to stated capital at the time the share
dividend is made.
(b) A share dividend in shares of any class may not be made
to a holder of shares of any other class unless:
(1) the real estate investment trust's certificate of
formation provides for the dividend; or
(2) the share dividend is authorized by the
affirmative vote or the written consent of the holders of at least a
majority of the outstanding shares of the class in which the share
dividend is to be made.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.207. VALUE OF SHARES ISSUED AS SHARE
DIVIDENDS. (a) A share dividend payable in authorized but
unissued shares with par value shall be issued at the par value of
the shares.
(b) A share dividend payable in authorized but unissued
shares without par value shall be issued at the value set by the
trust managers when the share dividend is authorized.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.208. TRANSFER OF SURPLUS FOR SHARE
DIVIDENDS. (a) When a share dividend payable in authorized but
unissued shares with par value is made by a real estate investment
trust, an amount of surplus designated by the trust managers that is
not less than the aggregate par value of the shares issued as a
share dividend shall be transferred to stated capital.
(b) When a share dividend payable in authorized but unissued
shares without par value is made by a real estate investment trust,
an amount of surplus equal to the aggregate value set by the trust
managers with respect to the shares under Section 200.207(b) shall
be transferred to stated capital.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.209. DETERMINATION OF SOLVENCY, NET ASSETS, STATED
CAPITAL, AND SURPLUS. (a) The determination of whether a real
estate investment trust is or would be insolvent and the
determination of the value of a real estate investment trust's net
assets, stated capital, or surplus and each of the components of net
assets, stated capital, or surplus may be based on:
(1) financial statements of the real estate investment
trust that present the financial condition of the real estate
investment trust in accordance with generally accepted accounting
principles, including financial statements that include subsidiary
entities or other entities accounted for on a consolidated basis or
on the equity method of accounting;
(2) financial statements prepared using the method of
accounting used to file the real estate investment trust's federal
income tax return or using any other accounting practices and
principles that are reasonable under the circumstances;
(3) financial information, including condensed or
summary financial statements, that is prepared on the same basis as
financial statements described by Subdivision (1) or (2);
(4) a projection, a forecast, or other forward-looking
information relating to the future economic performance, financial
condition, or liquidity of the real estate investment trust that is
reasonable under the circumstances;
(5) a fair valuation or information from any other
method that is reasonable under the circumstances; or
(6) a combination of a statement, a valuation, or
information authorized by this section.
(b) Subsection (a) does not apply to the computation of any
tax imposed under the laws of this state.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.210. DATE OF DETERMINATION OF SURPLUS. (a) For
purposes of this subchapter, a determination of whether a real
estate investment trust is or would be made insolvent by a
distribution or share dividend or a determination of the value of a
real estate investment trust's surplus shall be made:
(1) on the date the distribution or share dividend is
authorized by the trust managers of the real estate investment
trust if the distribution or the share dividend is made not later
than the 120th day after the date of authorization; or
(2) if the distribution or the share dividend is made
more than 120 days after the date of authorization:
(A) on the date designated by the trust managers
if the date so designated is not earlier than 120 days before the
date the distribution or the share dividend is made; or
(B) on the date the distribution or the share
dividend is made if the trust managers do not designate a date as
described in Paragraph (A).
(b) For purposes of this section, a distribution that
involves:
(1) the incurrence by a real estate investment trust
of indebtedness or a deferred payment obligation is considered to
have been made on the date the indebtedness or obligation is
incurred; or
(2) a contract by the real estate investment trust to
acquire any of its own shares is considered to have been made on the
date when the contract is made or takes effect or on the date the
shares are acquired, at the option of the real estate investment
trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.211. SPLIT-UP OR DIVISION OF SHARES. The trust
managers of a real estate investment trust may authorize the real
estate investment trust to carry out any split-up or division of the
issued shares of a class of the real estate investment trust into a
larger number of shares within the same class that does not increase
the stated capital of the real estate investment trust because the
split-up or division of issued shares is not a share dividend or a
distribution.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER F. SHAREHOLDERS' MEETINGS; VOTING AND QUORUM
§ 200.251. ANNUAL MEETING. (a) An annual meeting of
the SHAREHOLDERS of a real estate investment trust shall be held at
a time that is stated in or set in accordance with the bylaws of the
real estate investment trust.
(b) If the annual meeting is not held at the designated
time, a shareholder may by certified or registered mail make a
written request to an officer or trust manager of the real estate
investment trust that the meeting be held within a reasonable time.
If the annual meeting is not called before the 61st day after the
date the request calling for a meeting is made, any shareholder may
bring suit at law or in equity to compel the meeting to be held.
(c) Each shareholder has a justifiable interest sufficient
to enable the shareholder to institute and prosecute a legal
proceeding described by this section.
(d) The failure to hold an annual meeting at the designated
time does not result in the winding up or termination of the real
estate investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.252. SPECIAL MEETINGS. A special meeting of the
SHAREHOLDERS of a real estate investment trust may be called by:
(1) a trust manager, an officer of the real estate
investment trust, or any other person authorized to call special
meetings by the certificate of formation or bylaws of the real
estate investment trust; or
(2) the holders of at least 10 percent of all of the
shares of the real estate investment trust entitled to vote at the
proposed special meeting unless a greater or lesser percentage of
shares is specified in the certificate of formation, not to exceed
50 percent of the shares entitled to vote.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.253. NOTICE OF MEETING. (a) Written notice of a
meeting in accordance with Section 6.051 shall be given to each
shareholder entitled to vote at the meeting not later than the 10th
day and not earlier than the 60th day before the date of the
meeting. Notice shall be given in person or by mail by or at the
direction of a trust manager, officer, or other person calling the
meeting.
(b) The notice of a special meeting must contain a statement
regarding the purpose or purposes of the meeting.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.254. CLOSING OF SHARE TRANSFER RECORDS. Share
transfer records that are closed in accordance with Section 6.101
for the purpose of determining which SHAREHOLDERS are entitled to
receive notice of a meeting of SHAREHOLDERS shall remain closed for
at least 10 days immediately preceding the date of the meeting.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.255. RECORD DATE FOR WRITTEN CONSENT TO
ACTION. The record date provided in accordance with Section
6.102(a) may not be more than 10 days after the date on which the
trust managers adopt the resolution setting the record date.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.256. RECORD DATE FOR PURPOSE OTHER THAN WRITTEN
CONSENT TO ACTION. The record date provided by the trust managers
in accordance with Section 6.101 must be at least 10 days before the
date on which the particular action requiring the determination of
SHAREHOLDERS is to be taken.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.257. QUORUM. (a) Subject to Subsection (b), the
holders of the majority of the shares entitled to vote at a meeting
of the SHAREHOLDERS of a real estate investment trust that are
present or represented by proxy at the meeting are a quorum for the
consideration of a matter to be presented at that meeting.
(b) The certificate of formation of a real estate investment
trust may provide that a quorum is present only if:
(1) the holders of a specified portion of the shares
that is greater than the majority of the shares entitled to vote are
represented at the meeting in person or by proxy; or
(2) the holders of a specified portion of the shares
that is less than the majority but not less than one-third of the
shares entitled to vote are represented at the meeting in person or
by proxy.
(c) Unless provided by the certificate of formation or
bylaws of the real estate investment trust, after a quorum is
present at a meeting of SHAREHOLDERS, the SHAREHOLDERS may conduct
business properly brought before the meeting until the meeting is
adjourned. The subsequent withdrawal from the meeting of a
shareholder or the refusal of a shareholder present at or
represented by proxy at the meeting to vote does not negate the
presence of a quorum at the meeting.
(d) Unless provided by the certificate of formation or
bylaws, the SHAREHOLDERS of the real estate investment trust at a
meeting at which a quorum is not present may adjourn the meeting
until the time and to the place as may be determined by a vote of the
holders of the majority of the shares who are present or represented
by proxy at the meeting.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.258. VOTING IN ELECTION OF TRUST
MANAGERS. (a) Subject to Subsection (b), trust managers of a real
estate investment trust shall be elected by two-thirds of the votes
cast by the holders of shares entitled to vote in the election of
trust managers at a meeting of SHAREHOLDERS at which a quorum is
present.
(b) The certificate of formation or bylaws of a real estate
investment trust may provide that a trust manager of the real estate
investment trust shall be elected only if the trust manager
receives:
(1) the vote of the holders of a specified portion, but
not less than the majority, of the shares entitled to vote in the
election of trust managers;
(2) the vote of the holders of a specified portion, but
not less than the majority, of the shares entitled to vote in the
election of trust managers and represented in person or by proxy at
a meeting of SHAREHOLDERS at which a quorum is present; or
(3) the vote of the holders of a specified portion, but
not less than the majority, of the votes cast by the holders of
shares entitled to vote in the election of trust managers at a
meeting of SHAREHOLDERS at which a quorum is present.
(c) Subject to Section 200.259, at each election of trust
managers of a real estate investment trust, each shareholder
entitled to vote at the election is entitled to vote, in person or
by proxy, the number of shares owned by the shareholder for as many
candidates as there are trust managers to be elected and for whose
election the shareholder is entitled to vote.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.259. CUMULATIVE VOTING IN ELECTION OF TRUST
MANAGERS. (a) Cumulative voting is allowed only if specifically
authorized by the certificate of formation of a real estate
investment trust.
(b) Cumulative voting occurs when a shareholder:
(1) gives one candidate as many votes as the total of
the number of the trust managers to be elected multiplied by the
shareholder's shares; or
(2) distributes the votes among one or more candidates
using the same principle.
(c) If cumulative voting is specifically authorized by the
certificate of formation, a shareholder who intends to cumulate
votes must give written notice of that intention to the trust
managers on or before the day preceding the date of the election at
which the shareholder intends to cumulate votes.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.260. VOTING ON MATTERS OTHER THAN ELECTION OF
TRUST MANAGERS. (a) Subject to Subsection (b), with respect to a
matter other than the election of trust managers or a matter for
which the affirmative vote of the holders of a specified portion of
the shares entitled to vote is required by this code, the
affirmative vote of the holders of the majority of the shares
entitled to vote on, and who voted for, against, or expressly
abstained with respect to, the matter at a SHAREHOLDERS' meeting of
a real estate investment trust at which a quorum is present is the
act of the SHAREHOLDERS.
(b) With respect to a matter other than the election of
trust managers or a matter for which the affirmative vote of the
holders of a specified portion of the shares entitled to vote is
required by this code, the certificate of formation or bylaws of a
real estate investment trust may provide that the act of the
SHAREHOLDERS of the real estate investment trust is:
(1) the affirmative vote of the holders of a specified
portion, but not less than the majority, of the shares entitled to
vote on that matter;
(2) the affirmative vote of the holders of a specified
portion, but not less than the majority, of the shares entitled to
vote on that matter and represented in person or by proxy at a
SHAREHOLDERS' meeting at which a quorum is present;
(3) the affirmative vote of the holders of a specified
portion, but not less than the majority, of the shares entitled to
vote on, and who voted for or against, the matter at a SHAREHOLDERS'
meeting at which a quorum is present; or
(4) the affirmative vote of the holders of a specified
portion, but not less than the majority, of the shares entitled to
vote on, and who voted for, against, or expressly abstained with
respect to, the matter at a SHAREHOLDERS' meeting at which a quorum
is present.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.261. VOTE REQUIRED TO APPROVE FUNDAMENTAL
ACTION. (a) In this section, a "fundamental action" means:
(1) an amendment of a certificate of formation;
(2) a voluntary winding up under Chapter 11;
(3) a revocation of a voluntary decision to wind up
under Section 11.151;
(4) a cancellation of an event requiring winding up
under Section 11.152; or
(5) a reinstatement under Section 11.202.
(b) Except as otherwise provided by this code or the
certificate of formation or bylaws of a real estate investment
trust in accordance with Section 200.260, the vote required for
approval of a fundamental action by the SHAREHOLDERS is the
affirmative vote of the holders of at least two-thirds of the
outstanding shares entitled to vote on the fundamental action.
(c) If a class or series of shares is entitled to vote as a
class or series on a fundamental action, the vote required for
approval of the action by the SHAREHOLDERS is the affirmative vote
of the holders of at least two-thirds of the outstanding shares in
each class or series of shares entitled to vote on the action as a
class and at least two-thirds of the outstanding shares otherwise
entitled to vote on the action. Shares entitled to vote as a class
or series shall be entitled to vote only as a class or series unless
otherwise entitled to vote on each matter generally or otherwise
provided by the certificate of formation.
(d) Unless an amendment to the certificate of formation is
undertaken by the trust managers under Section 200.103, separate
voting by a class or series of shares of a real estate investment
trust is required for approval of an amendment to the certificate of
formation that would result in:
(1) the increase or decrease of the aggregate number
of authorized shares of the class or series;
(2) the increase or decrease of the par value of the
shares of the class, including changing shares with par value into
shares without par value or changing shares without par value into
shares with par value;
(3) effecting an exchange, reclassification, or
cancellation of all or part of the shares of the class or series;
(4) effecting an exchange or creating a right of
exchange of all or part of the shares of another class or series
into the shares of the class or series;
(5) the change of the designations, preferences,
limitations, or relative rights of the shares of the class or
series;
(6) the change of the shares of the class or series,
with or without par value, into the same or a different number of
shares, with or without par value, of the same class or series or
another class or series;
(7) the creation of a new class or series of shares
with rights and preferences equal, prior, or superior to the shares
of the class or series;
(8) increasing the rights and preferences of a class
or series with rights and preferences equal, prior, or superior to
the shares of the class or series;
(9) increasing the rights and preferences of a class
or series with rights or preferences later or inferior to the shares
of the class or series in such a manner that the rights or
preferences will be equal, prior, or superior to the shares of the
class or series;
(10) dividing the shares of the class into series and
setting and determining the designation of the series and the
variations in the relative rights and preferences between the
shares of the series;
(11) the limitation or denial of existing preemptive
rights or cumulative voting rights of the shares of the class or
series; or
(12) canceling or otherwise affecting the dividends on
the shares of the class or series that have accrued but have not
been declared.
(e) Unless otherwise provided by the certificate of
formation, 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 that would affect equally all series of the class, other
than a series in which no shares are outstanding or a series that is
not affected by the amendment, the holders of the separate series
are not entitled to separate class votes.
(f) Unless otherwise provided by the certificate of
formation, a proposed amendment to the certificate of formation
that would solely effect changes in the designations, preferences,
limitations, or relative rights, including voting rights, of one or
more series of shares of the real estate investment trust that have
been established under the authority granted to the trust managers
in the certificate of formation in accordance with Section 200.103
does not require the approval of the holders of the outstanding
shares of a class or series other than the affected series if, after
giving effect to the amendment:
(1) the preferences, limitations, or relative rights
of the affected series may be set and determined by the trust
managers with respect to the establishment of a new series of shares
under the authority granted to the trust managers in the
certificate of formation in accordance with Section 200.103; or
(2) any new series established as a result of a
reclassification of the affected series are within the preferences,
limitations, and relative rights that are described by Subdivision
(1).
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.262. CHANGES IN VOTE REQUIRED FOR CERTAIN
MATTERS. (a) With respect to a matter for which the affirmative
vote of the holders of a specified portion of the shares entitled to
vote is required by this code, the certificate of formation of a
real estate investment trust may provide that the affirmative vote
of the holders of a specified portion, but not less than the
majority, of the shares entitled to vote on that matter is required
for shareholder action on that matter.
(b) With respect to a matter for which the affirmative vote
of the holders of a specified portion of the shares of a class or
series is required by this code, the certificate of formation may
provide that the affirmative vote of the holders of a specified
portion, but not less than the majority, of the shares of that class
or series is required for action of the holders of shares of that
class or series on that matter.
(c) If a provision of the certificate of formation provides
that the affirmative vote of the holders of a specified portion that
is greater than the majority of the shares entitled to vote on a
matter is required for shareholder action on that matter, the
provision may not be amended, directly or indirectly, without the
same affirmative vote unless otherwise provided by the certificate
of formation.
(d) If a provision of the certificate of formation provides
that the affirmative vote of the holders of a specified portion that
is greater than the majority of the shares of a class or series is
required for shareholder action on a matter, the provision may not
be amended, directly or indirectly, without the same affirmative
vote unless otherwise provided by the certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.263. NUMBER OF VOTES PER SHARE. (a) Except as
provided by the certificate of formation of a real estate
investment trust or this title or Title 1, each outstanding share,
regardless of class, is entitled to one vote on each matter
submitted to a vote at a SHAREHOLDERS' meeting.
(b) If the certificate of formation provides for more or
less than one vote per share on a matter for all of the outstanding
shares or for the shares of a class or series, each reference in
this code or in the certificate of formation or bylaws, unless
expressly stated otherwise, to a specified portion of the shares
with respect to that matter refers to the portion of the votes
entitled to be cast with respect to those shares under the
certificate of formation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.264. VOTING IN PERSON OR BY PROXY. (a) A
shareholder may vote in person or by proxy executed in writing by
the shareholder.
(b) A telegram, telex, cablegram, or other form of
electronic transmission, including telephonic transmission, by the
shareholder, or a photographic, photostatic, facsimile, or similar
reproduction of a writing executed by the shareholder, is
considered 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.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.265. TERM OF PROXY. A proxy is not valid after 11
months after the date the proxy is executed unless otherwise
provided by the proxy.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.266. REVOCABILITY OF PROXY. (a) In this
section, a "proxy coupled with an interest" includes the
appointment as proxy of:
(1) a pledgee;
(2) a person who purchased or agreed to purchase the
shares subject to the proxy;
(3) a person who owns or holds an option to purchase
the shares subject to the proxy;
(4) a creditor of the real estate investment trust who
extended the real estate investment trust credit under terms
requiring the appointment;
(5) an employee of the real estate investment trust
whose employment contract requires the appointment; or
(6) a party to a voting agreement created under
Section 6.252.
(b) A proxy is revocable unless:
(1) the proxy form conspicuously states that the proxy
is irrevocable; and
(2) the proxy is coupled with an interest.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.267. ENFORCEABILITY OF PROXY. (a) An
irrevocable proxy is specifically enforceable against the holder of
shares or any successor or transferee of the holder if:
(1) the proxy is noted conspicuously on the
certificate representing the shares subject to the proxy; or
(2) in the case of uncertificated shares, notation of
the proxy is contained in the notice sent under Section 3.205 with
respect to the shares subject to the proxy.
(b) An irrevocable proxy that is 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 a subsequent transferee, regardless of whether
the transfer is for value, unless:
(1) the proxy is noted conspicuously on the
certificate representing the shares subject to the proxy; or
(2) in the case of uncertificated shares, notation of
the proxy is contained in the notice sent under Section 3.205 with
respect to the shares subject to the proxy.
(c) An irrevocable proxy shall be specifically enforceable
against a person who is not a transferee for value from the time the
person acquires actual knowledge of the existence of the
irrevocable proxy.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.268. PROCEDURES IN BYLAWS RELATING TO PROXIES. A
real estate investment trust may establish in the bylaws of the real
estate investment trust procedures consistent with this code for
determining the validity of proxies and determining whether shares
held of record by a bank, broker, or other nominee are represented
at a meeting of SHAREHOLDERS. The procedures may incorporate rules
of and determinations made by a self-regulatory organization
regulating that bank, broker, or other nominee.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER G. TRUST MANAGERS
§ 200.301. MANAGEMENT BY TRUST MANAGERS. The control,
operation, disposition, investment, and management of the trust
estate and the powers necessary or appropriate to effect any
purpose for which a real estate investment trust is organized are
vested in one or more trust managers.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.302. DESIGNATION OF TRUST MANAGERS. (a) The
certificate of formation of a real estate investment trust must
contain the name of each trust manager.
(b) A successor trust manager must be selected in accordance
with the certificate of formation. The selection of a successor
trust manager is considered an amendment to the certificate of
formation of a real estate investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.303. TRUST MANAGER ELIGIBILITY REQUIREMENTS. A
trust manager of a real estate investment trust must be an
individual. Unless the certificate of formation or bylaws of a real
estate investment trust provide otherwise, a person is not required
to be a resident of this state or a shareholder of the real estate
investment trust to serve as a trust manager. The certificate of
formation or bylaws may prescribe other qualifications for trust
managers.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.304. NUMBER OF TRUST MANAGERS. (a) The
certificate of formation or bylaws of the real estate investment
trust shall set the number of trust managers or provide for the
manner of determining the number of trust managers, except that the
certificate of formation shall set the number constituting the
initial trust managers.
(b) The number of trust managers may be increased or
decreased by amendment to, or as provided by, the certificate of
formation or bylaws. A decrease in the number of trust managers may
not shorten the term of an incumbent trust manager.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.305. COMPENSATION. A trust manager or officer of
a real estate investment trust is entitled to receive compensation
set by or in the manner provided by the certificate of formation or
bylaws of the real estate investment trust. If the certificate of
formation or bylaws do not provide for compensation to trust
managers and officers, the trust managers of the real estate
investment trust must determine the compensation by vote at a
meeting or by written consent.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.306. TERM OF TRUST MANAGER. (a) Except as
provided by the certificate of formation or bylaws of a real estate
investment trust, a trust manager of the real estate investment
trust serves until the trust manager's successor is elected.
(b) A trust manager may succeed himself or herself in
office.
(c) If a successor trust manager is not elected, the trust
manager in office continues to serve as trust manager until the
trust manager's successor is elected.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.307. STAGGERED TERMS OF TRUST MANAGERS. (a) A
governing document of a real estate investment trust may provide
that all or some of the board of trust managers may be divided into
two or three classes. Each class must include the same or a similar
number of trust managers as each other class.
(b) The terms of office of trust managers constituting the
first class expire on the election of successors at the first annual
meeting of shareholders after the election of those trust managers.
The terms of office of trust managers constituting the second class
expire on the election of successors at the second annual meeting of
shareholders after election of those trust managers. The terms of
office of trust managers constituting the third class, if any,
expire on the election of successors at the third annual meeting of
shareholders after election of those trust managers.
(c) If a governing document of the real estate investment
trust provides for the classification of trust managers, an annual
election for trust managers as a whole is not necessary. At each
annual meeting held after the classification of trust managers, an
election shall be held to elect the number of trust managers equal
to the number of trust managers in the class the term of which
expires on the date of the meeting, and those trust managers serve
until:
(1) the second succeeding annual meeting if there are
two classes; or
(2) the third succeeding annual meeting if there are
three classes.
(d) Unless provided by the certificate of formation or a
bylaw adopted by shareholders, staggered terms for trust managers
do not take effect until the next annual meeting of shareholders at
which trust managers are elected. Staggered terms for trust
managers may not be effected if any shareholder has the right to
cumulate votes for the election of trust managers and the number of
trust managers is fewer than nine trust managers.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.308. VACANCY. (a) Except as provided by
Subsection (b), a vacancy occurring in the office of a trust manager
of a real estate investment trust may be filled by the affirmative
vote of the majority of the remaining trust managers, even if the
majority of trust managers constitutes less than a quorum of the
trust managers.
(b) The certificate of formation or bylaws of the real
estate investment trust may provide an alternative procedure for
filling a vacancy occurring in the office of a trust manager,
including filling vacancies by simple majority or super majority
votes of the shareholders.
(c) The term of a trust manager elected to fill a vacancy
occurring in the office of a trust manager is the unexpired term of
the trust manager's predecessor in office and until the trust
manager's successor is elected and has qualified.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.309. NOTICE OF MEETING. (a) Regular meetings of
the trust managers of a real estate investment trust may be held
with or without notice as prescribed by the real estate investment
trust's bylaws.
(b) Special meetings of the trust managers shall be held
with notice as prescribed by the bylaws.
(c) A notice of a board meeting is not required to specify
the business to be transacted at the meeting or the purpose of the
meeting, unless required by the bylaws.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.310. QUORUM. A quorum of the board of trust
managers of a real estate investment trust is the majority of the
number of trust managers unless the certificate of formation or
bylaws require a greater number.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.311. COMMITTEES OF TRUST MANAGERS. (a) If
authorized by the certificate of formation or bylaws, the trust
managers of a real estate investment trust, by resolution adopted
by a majority of the trust managers, may designate:
(1) committees composed of one or more trust managers;
or
(2) trust managers as alternate committee members to
replace absent or disqualified committee members at a committee
meeting, subject to any limitations imposed by the trust managers.
(b) To the extent provided by the resolution designating a
committee or the certificate of formation or bylaws and subject to
Subsection (c), the committee has the authority of the trust
managers.
(c) A committee of the trust managers may not:
(1) amend the certificate of formation, except to
classify or reclassify shares in accordance with Section 200.103 if
authorized by the resolution designating the committee,
certificate of formation, or bylaws;
(2) propose a reduction of stated capital of the real
estate investment trust;
(3) approve a plan of merger or share exchange of the
real estate investment trust;
(4) recommend to shareholders the sale, lease, or
exchange of all or substantially all of the property and assets of
the real estate investment trust not made in the usual and regular
course of its business;
(5) recommend to the shareholders a voluntary winding
up and termination or a revocation of the real estate investment
trust;
(6) amend, alter, or repeal the bylaws or adopt new
bylaws;
(7) fill vacancies in the offices of the trust
managers;
(8) fill vacancies in or designate alternate members
of a committee of the trust managers;
(9) fill a vacancy to be filled because of an increase
in the number of trust managers;
(10) elect or remove officers of the real estate
investment trust or members or alternate members of a committee of
the trust managers;
(11) set the compensation of the members or alternate
members of a committee of the trust managers; or
(12) alter or repeal a resolution of the trust
managers that states that it may not be amended or repealed.
(d) A committee of the trust managers may authorize a
distribution or the issuance of shares if authorized by the
resolution designating the committee or by the certificate of
formation or bylaws.
(e) The designation of and delegation of authority to a
committee of the trust managers does not relieve a trust manager of
responsibility imposed by law.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.312. LIABILITY OF TRUST MANAGERS. (a) A trust
manager of a real estate investment trust who votes for or assents
to a distribution of assets made by the real estate investment trust
to its shareholders during the liquidation of the real estate
investment trust without the payment and discharge of or the making
of adequate provision for the payment of all of the known debts,
liabilities, and other obligations of the real estate investment
trust is jointly and severally liable to the real estate investment
trust for the value of the distributed assets to the extent the
debts, liabilities, and other obligations are not paid and
discharged.
(b) A trust manager of a real estate investment trust who
votes for or assents to the making of a loan to another trust
manager or officer of the real estate investment trust or to the
making of a loan secured by shares of the real estate investment
trust is jointly and severally liable to the real estate investment
trust for the loan amount until the loan is repaid.
(c) A trust manager is not jointly and severally liable
under Subsection (a) if, in determining the amount available for
the distribution, the trust manager, acting in good faith and with
ordinary care:
(1) relied on information, opinions, reports, or
statements in accordance with Section 3.102; or
(2) considered the assets of the real estate
investment trust to be valued at least at book value.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.313. STATUTE OF LIMITATIONS ON CERTAIN ACTION
AGAINST TRUST MANAGERS. An action may not be brought against a
trust manager of a real estate investment trust under Section
200.312 after the second anniversary of the date the alleged act
giving rise to the liability occurred.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.314. IMMUNITY FROM LIABILITY FOR PERFORMANCE OF
DUTY. A trust manager of a real estate investment trust may not be
held liable to the real estate investment trust for an act,
omission, loss, damage, or expense arising from the performance of
the trust manager's duties under the trust, except for liability
arising from the wilful misfeasance, wilful malfeasance, or gross
negligence of the trust manager.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.315. RIGHT OF CONTRIBUTION. A trust manager who
is liable for a claim asserted under Section 200.312 is entitled to
receive contribution from each of the other trust managers who are
liable with respect to that claim in an amount appropriate to
achieve equity.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.316. OFFICERS. (a) An officer of a real estate
investment trust designated by the trust managers under Section
3.103 may exercise all of the powers of a trust manager relating to
the business and affairs of the real estate investment trust,
unless action by the trust managers is specified by this code or
another applicable law.
(b) A designation of or delegation of authority to an
officer of a real estate investment trust described by this section
does not relieve a trust manager of responsibility imposed by law.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.317. CONTRACTS OR TRANSACTIONS INVOLVING
INTERESTED TRUST MANAGERS AND OFFICERS. (a) This section applies
only to a contract or transaction between a real estate investment
trust and:
(1) one or more of the trust's trust managers or
officers; or
(2) an entity or other organization in which one or
more of the trust's trust managers or officers:
(A) is a managerial official; or
(B) has a financial interest.
(b) An otherwise valid contract or transaction is valid
notwithstanding that a trust manager or officer of the trust is
present at or participates in the meeting of the trust managers or
of a committee of the trust managers that authorizes the contract or
transaction, or votes to authorize the contract or transaction, if:
(1) the material facts as to the relationship or
interest and as to the contract or transaction are disclosed to or
known by:
(A) the trust managers or a committee of the
trust managers, and the trust managers or committee of the trust
managers in good faith authorize the contract or transaction by the
affirmative vote of the majority of disinterested trust managers or
committee members, regardless of whether the disinterested trust
managers or committee members constitute a quorum; or
(B) the shareholders entitled to vote on the
authorization of the contract or transaction, and the contract or
transaction is specifically approved in good faith by a vote of the
shareholders; or
(2) the contract or transaction is fair to the real
estate investment trust when the contract or transaction is
authorized, approved, or ratified by the trust managers, a
committee of the trust managers, or the shareholders.
(c) Common or interested trust managers may be included in
determining the presence of a quorum at a meeting of the trust
managers, or a committee of the trust managers, that authorizes the
contract or transaction.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER H. INVESTMENTS
§ 200.351. INVESTMENTS. A trust manager or officer of a
real estate investment trust has complete discretion with respect
to the investment of the trust estate unless the investment is
contrary to or inconsistent with:
(1) this chapter;
(2) a provision of the Internal Revenue Code relating
to or governing real estate investment trusts; or
(3) regulations adopted under a provision of the
Internal Revenue Code relating to or governing real estate
investment trusts.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER I. FUNDAMENTAL BUSINESS TRANSACTIONS
§ 200.401. DEFINITIONS. In this subchapter:
(1) "Participating shares" means shares that entitle
the holders of the shares to participate without limitation in
distributions.
(2) "Sale of all or substantially all of the assets"
means the sale, lease, exchange, or other disposition, other than a
pledge, mortgage, deed of trust, or trust indenture unless
otherwise provided by the certificate of formation, of all or
substantially all of the property and assets of a domestic real
estate investment trust that is not made in the usual and regular
course of the trust's business without regard to whether the
disposition is made with the goodwill of the business. The term
does not include a transaction that results in the real estate
investment trust directly or indirectly:
(A) continuing to engage in one or more
businesses; or
(B) applying a portion of the consideration
received in connection with the transaction to the conduct of a
business that the real estate investment trust engages in after the
transaction.
(3) "Shares" includes a receipt or other instrument
issued by a depository representing an interest in one or more
shares or fractions of shares of a domestic or foreign real estate
investment trust that are deposited with the depository.
(4) "Voting shares" means shares that entitle the
holders of the shares to vote unconditionally in elections of trust
managers.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.402. APPROVAL OF MERGER. (a) A real estate
investment trust that is a party to the merger under Chapter 10 must
approve the merger by complying with this section.
(b) The trust managers of the real estate investment trust
shall adopt a resolution that:
(1) approves the plan of merger; and
(2) if shareholder approval of the merger is required
by this subchapter:
(A) recommends that the plan of merger be
approved by the shareholders of the real estate investment trust;
or
(B) directs that the plan of merger be submitted
to the shareholders for approval without recommendation if the
trust managers determine for any reason not to recommend approval
of the plan of merger.
(c) Except as provided by this subchapter or Chapter 10, the
plan of merger shall be submitted to the shareholders of the real
estate investment trust for approval as provided by this
subchapter. The trust managers may place conditions on the
submission of the plan of merger to the shareholders.
(d) If the trust managers approve a plan of merger required
to be approved by the shareholders of the real estate investment
trust but do not adopt a resolution recommending that the plan of
merger be approved by the shareholders, the trust managers shall
communicate to the shareholders the reason for the trust managers'
determination to submit the plan of merger without a
recommendation.
(e) Except as provided by Chapter 10 or Sections
200.407-200.409, the shareholders of the real estate investment
trust shall approve the plan of merger as provided by this
subchapter.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.403. APPROVAL OF CONVERSION. (a) A real estate
investment trust must approve a conversion under Chapter 10 by
complying with this section.
(b) The trust managers of the real estate investment trust
shall adopt a resolution that approves the plan of conversion and:
(1) recommends that the plan of conversion be approved
by the shareholders of the real estate investment trust; or
(2) directs that the plan of conversion be submitted
to the shareholders for approval without recommendation if the
trust managers determine for any reason not to recommend approval
of the plan of conversion.
(c) The plan of conversion shall be submitted to the
shareholders of the real estate investment trust for approval as
provided by this subchapter. The trust managers may place
conditions on the submission of the plan of conversion to the
shareholders.
(d) If the trust managers approve a plan of conversion but
do not adopt a resolution recommending that the plan of conversion
be approved by the shareholders of the real estate investment
trust, the trust managers shall communicate to the shareholders the
reason for the trust managers' determination to submit the plan of
conversion without a recommendation.
(e) Except as provided by Sections 200.407-200.409, the
shareholders of the real estate investment trust must approve the
plan of conversion as provided by this subchapter.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.404. APPROVAL OF EXCHANGE. (a) A real estate
investment trust the shares of which are to be acquired in an
exchange under Chapter 10 must approve the exchange by complying
with this section.
(b) The trust managers shall adopt a resolution that
approves the plan of exchange and:
(1) recommends that the plan of exchange be approved
by the shareholders of the real estate investment trust; or
(2) directs that the plan of exchange be submitted to
the shareholders for approval without recommendation if the trust
managers determine for any reason not to recommend approval of the
plan of exchange.
(c) The plan of exchange shall be submitted to the
shareholders of the real estate investment trust for approval as
provided by this subchapter. The trust managers may place
conditions on the submission of the plan of exchange to the
shareholders.
(d) If the trust managers approve a plan of exchange but do
not adopt a resolution recommending that the plan of exchange be
approved by the shareholders of the real estate investment trust,
the trust managers shall communicate to the shareholders the reason
for the trust managers' determination to submit the plan of
exchange to shareholders without a recommendation.
(e) Except as provided by Sections 200.407-200.409, the
shareholders of the real estate investment trust shall approve the
plan of exchange as provided by this subchapter.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.405. APPROVAL OF SALE OF ALL OR SUBSTANTIALLY ALL
OF ASSETS. (a) Except as provided by the certificate of formation
of a domestic real estate investment trust, a sale, lease, pledge,
mortgage, assignment, transfer, or other conveyance of an interest
in real property or other assets of the real estate investment trust
does not require the approval or consent of the shareholders of the
real estate investment trust unless the transaction constitutes a
sale of all or substantially all of the assets of the real estate
investment trust.
(b) A real estate investment trust must approve the sale of
all or substantially all of its assets by complying with this
section.
(c) The trust managers of the real estate investment trust
shall adopt a resolution that approves the sale of all or
substantially all of the assets of the real estate investment trust
and:
(1) recommends that the sale of all or substantially
all of the assets of the real estate investment trust be approved by
the shareholders of the real estate investment trust; or
(2) directs that the sale of all or substantially all
of the assets of the real estate investment trust be submitted to
the shareholders for approval without recommendation if the trust
managers determine for any reason not to recommend approval of the
sale.
(d) The sale of all or substantially all of the assets of the
real estate investment trust shall be submitted to the shareholders
of the real estate investment trust for approval as provided by this
subchapter. The trust managers may place conditions on the
submission of the proposed sale to the shareholders.
(e) If the trust managers approve the sale of all or
substantially all of the assets of the real estate investment trust
but do not adopt a resolution recommending that the proposed sale be
approved by the shareholders of the real estate investment trust,
the trust managers shall communicate to the shareholders the reason
for the trust managers' determination to submit the proposed sale
to shareholders without a recommendation.
(f) The shareholders of the real estate investment trust
shall approve the sale of all or substantially all of the assets of
the real estate investment trust as provided by this subchapter.
(g) After the approval of the sale by the shareholders, the
trust managers may abandon the sale of all or substantially all of
the assets of the real estate investment trust, subject to the
rights of a third party under a contract relating to the assets,
without further action or approval by the shareholders.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.406. GENERAL PROCEDURE FOR SUBMISSION TO
SHAREHOLDERS OF FUNDAMENTAL BUSINESS TRANSACTION. (a) If a
fundamental business transaction involving a real estate
investment trust is required to be submitted to the shareholders of
the real estate investment trust under this subchapter, the real
estate investment trust shall notify each shareholder of the real
estate investment trust that the fundamental business transaction
is being submitted to the shareholders for approval at a meeting of
shareholders as required by this subchapter, regardless of whether
the shareholder is entitled to vote on the matter.
(b) If the fundamental business transaction is a merger,
conversion, or interest exchange, the notice required by Subsection
(a) shall contain or be accompanied by a copy or summary of the plan
of merger, conversion, or interest exchange, as appropriate, and
the notice required by Section 10.355.
(c) The notice of the meeting must:
(1) be given not later than the 21st day before the
date of the meeting; and
(2) state that the purpose, or one of the purposes, of
the meeting is to consider the fundamental business transaction.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.407. GENERAL VOTE REQUIREMENT FOR APPROVAL OF
FUNDAMENTAL BUSINESS TRANSACTION. (a) Except as provided by this
code or the certificate of formation or bylaws of a real estate
investment trust in accordance with Section 200.261, the
affirmative vote of the holders of at least two-thirds of the
outstanding shares of the real estate investment trust entitled to
vote on a fundamental business transaction is required to approve
the transaction.
(b) Unless provided by the certificate of formation or
Section 200.408, shares of a class or series that are not otherwise
entitled to vote on matters submitted to shareholders generally
will not be entitled to vote for the approval of a fundamental
business transaction.
(c) Except as provided by this code, if a class or series of
shares of a real estate investment trust is entitled to vote on a
fundamental business transaction as a class or series, in addition
to the vote required under Subsection (a), the affirmative vote of
the holders of at least two-thirds of the outstanding shares in each
class or series of shares entitled to vote on the fundamental
business transaction as a class or series is required to approve the
transaction.
(d) Unless required by the certificate of formation,
approval of a merger by shareholders is not required under this code
for a real estate investment trust that is a party to the plan of
merger unless that real estate investment trust is also a party to
the merger.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.408. CLASS VOTING REQUIREMENTS FOR CERTAIN
FUNDAMENTAL BUSINESS TRANSACTIONS. (a) Separate voting by a
class or series of shares of a real estate investment trust is
required for approval of a plan of merger or conversion if:
(1) the plan of merger or conversion contains a
provision that would require approval by that class or series of
shares under Section 200.262 if the provision was contained in a
proposed amendment to the real estate investment trust's
certificate of formation; or
(2) that class or series of shares is entitled under
the certificate of formation to vote as a class or series on the
plan of merger or conversion.
(b) Separate voting by a class or series of shares of a real
estate investment trust is required for approval of a plan of
exchange if:
(1) shares of that class or series are to be exchanged
under the terms of the plan of exchange; or
(2) that class or series is entitled under the
certificate of formation to vote as a class or series on the plan of
exchange.
(c) Separate voting by a class or series of shares of a real
estate investment trust is required for approval of a sale of all or
substantially all of the assets of the real estate investment trust
if that class or series of shares is entitled under the certificate
of formation to vote as a class or series on the sale of the real
estate investment trust's assets.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.409. NO SHAREHOLDER VOTE REQUIREMENT FOR CERTAIN
FUNDAMENTAL BUSINESS TRANSACTIONS. (a) Unless required by the
real estate investment trust's certificate of formation, a plan of
merger is not required to be approved by the shareholders of a real
estate investment trust if:
(1) the real estate investment trust is the sole
surviving real estate investment trust in the merger;
(2) the certificate of formation of the real estate
investment trust following the merger will not differ from the real
estate investment trust's certificate of formation before the
merger;
(3) immediately after the effective date of the
merger, each shareholder of the real estate investment trust whose
shares were outstanding immediately before the effective date of
the merger will hold the same number of shares, with identical
designations, preferences, limitations, and relative rights;
(4) the sum of the voting power of the number of voting
shares outstanding immediately after the merger and the voting
power of securities that may be acquired on the conversion or
exercise of securities issued under the merger does not exceed by
more than 20 percent the voting power of the total number of voting
shares of the real estate investment trust that are outstanding
immediately before the merger; and
(5) the sum of the number of participating shares that
are outstanding immediately after the merger and the number of
participating shares that may be acquired on the conversion or
exercise of securities issued under the merger does not exceed by
more than 20 percent the total number of participating shares of the
real estate investment trust that are outstanding immediately
before the merger.
(b) Unless required by the certificate of formation, a plan
of merger effected under Section 10.005 or 10.006 does not require
the approval of the shareholders of the real estate investment
trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.410. RIGHTS OF DISSENT AND APPRAISAL. A
shareholder of a domestic real estate investment trust has the
rights of dissent and appraisal under Subchapter H, Chapter 10,
with respect to a fundamental business transaction.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER J. SUPPLEMENTAL WINDING UP AND TERMINATION PROVISIONS
§ 200.451. APPROVAL OF VOLUNTARY WINDING UP. A real
estate investment trust must approve a voluntary winding up under
Chapter 11 by the affirmative vote of the shareholders in
accordance with Section 200.261.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.452. APPROVAL OF REINSTATEMENT, CANCELLATION, OR
REVOCATION OF VOLUNTARY WINDING UP. A real estate investment trust
may reinstate its existence under Section 11.202, revoke a
voluntary decision to wind up under Section 11.151, or cancel an
event requiring winding up under Section 11.152 by the affirmative
vote of the shareholders in accordance with Section 200.261.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.453. RESPONSIBILITY FOR WINDING UP. If a real
estate investment trust determines or is required to wind up, the
trust managers shall manage the winding up of the business or
affairs of the real estate investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
SUBCHAPTER K. MISCELLANEOUS PROVISIONS
§ 200.501. EXAMINATION OF RECORDS. (a) On written
demand stating a proper purpose, a shareholder of record of a real
estate investment trust for at least six months immediately
preceding the shareholder's demand, or a holder of record of at
least five percent of all of the outstanding shares of a real estate
investment trust, is entitled to examine and copy, at a reasonable
time, the real estate investment trust's relevant books and records
of account, minutes, and share transfer records. The examination
may be conducted in person or through an agent or attorney.
(b) This section does not impair the power of a court, on the
presentation of proof of proper purpose by a shareholder, to compel
the production for examination by the shareholder of the books and
records of account, minutes, and share transfer records of a real
estate investment trust, regardless of the period during which the
shareholder was a record holder and regardless of the number of
shares held by the person.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.502. JOINDER OF SHAREHOLDERS NOT REQUIRED. The
joinder of shareholders of a real estate investment trust is not
required for any sale, lease, mortgage, or other disposition of all
or part of the assets of the real estate investment trust.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
§ 200.503. TAX LAW REQUIREMENTS. In connection with a
real estate investment trust qualifying or attempting to qualify as
a real estate investment trust under the Internal Revenue Code and
the regulations adopted under the Internal Revenue Code, a
provision of this chapter is subject to the provisions of the
Internal Revenue Code or the regulations relating to or governing
real estate investment trusts adopted under those provisions if:
(1) the provision of this chapter is contrary to or
inconsistent with the federal provisions or regulations;
(2) the federal provisions or regulations require a
real estate investment trust to take any action required to secure
or maintain its status as a real estate investment trust under the
federal provisions or regulations; or
(3) the federal provisions or regulations prohibit the
real estate investment trust from taking any action required to
secure or maintain its status as a real estate investment trust
under the federal provision or regulation.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
