This section requires prompt notice to be given after ratification of a defective corporate act and describes who must receive it, what the notice must include, and limited exceptions and challenge deadlines.
Sec. 21.911. NOTICE TO SHAREHOLDERS FOLLOWING RATIFICATION OF DEFECTIVE CORPORATE ACT. (a) For each defective corporate act ratified by the board of directors under Sections 21.903 and 21.904, notice of the ratification shall be given promptly to: (1) each holder of valid shares and putative shares, regardless of whether the shares are voting or nonvoting, as of the date the board of directors adopted the resolutions ratifying the defective corporate act; or (2) each holder of valid shares and putative shares, regardless of whether the shares are voting or nonvoting, as of a date not later than the 60th day after the date of adoption, as established by the board of directors. (b) Notice under this section shall be sent to the address of a holder of shares described by Subsection (a)(1) or (a)(2) as the address appears or most recently appeared, as appropriate, on the records of the corporation. (c) Notice under this section shall also be given to each holder of record of valid shares and putative shares, regardless of whether the shares are voting or nonvoting, as of the time of the defective corporate act, except that notice is not required to be given to a holder whose identity or address cannot be ascertained from the corporation's records. (d) The notice must contain: (1) copies of the resolutions adopted by the board of directors under Section 21.903 or the information required by Sections 21.903(a)(1)-(5); and (2) a statement that, on ratification of the defective corporate act or putative shares made in accordance with this subchapter, the holder's rights to challenge the defective corporate act or putative shares are limited to an action claiming that a court of appropriate jurisdiction, in its discretion, should declare: (A) that the ratification not take effect or that it take effect only on certain conditions, if the action is filed not later than the 120th day after the later of the applicable validation effective time or the time at which the notice required by this section is given; or (B) that the ratification was not accomplished in accordance with this subchapter. (e) Notwithstanding Subsections (a)-(d): (1) notice is not required to be given under this section to a person if notice of the ratification of the defective corporate act is given to that person in accordance with Section 21.906; and (2) for a corporation that has a class of stock listed on a national securities exchange, the notice required by this section and Section 21.906(a)(2) may be considered given if the information contained in the notice is disclosed in a document publicly filed by the corporation with the Securities and Exchange Commission under Section 13, 14, or 15(d), Securities Exchange Act of 1934 (15 U.S.C. Section 78m, 78n, or 78o(d)), and any rules promulgated under that Act. (f) For purposes of Sections 21.905, 21.906, and 21.907 and this section, notice to holders of putative shares and notice to holders of valid shares and putative shares as of the time of the defective corporate act shall be treated as notice to holders of valid shares for purposes of Sections 6.051, 6.052, 6.053, 6.201, 6.202, 6.203, 6.204, 6.205, 21.353, and 21.3531. (g) If the ratification of a defective corporate act has been approved by shareholders acting under Section 6.202, the notice required by this section may be included in any notice required to be given under Section 6.202(d) and, if included: (1) shall be sent to the shareholders entitled to the notice under Section 6.202(d) and all other holders of valid shares and putative shares otherwise entitled to the notice under Subsection (a) of this section; and (2) is not required to be sent to shareholders or holders of valid shares or putative shares who signed a consent described by Section 6.202(b). Added by Acts 2015, 84th Leg., R.S., Ch. 32 (S.B. 860), Sec. 30, eff. September 1, 2015. Amended by: Acts 2017, 85th Leg., R.S., Ch. 75 (S.B. 1518), Sec. 24, eff. September 1, 2017. Acts 2017, 85th Leg., R.S., Ch. 75 (S.B. 1518), Sec. 25, eff. September 1, 2017. Acts 2019, 86th Leg., R.S., Ch. 665 (S.B. 1971), Sec. 13, eff. September 1, 2019.