bill letting Texas corporations limit shareholder proposals

The text as introduced · 378 words

89R11822 TYPED

By: Meyer
H.B. No. 4115

A BILL TO BE ENTITLED

AN ACT

relating to shareholder proposals submitted to certain domestic

corporations.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter H, Chapter 21, Business Organizations

Code, is amended by adding Section 21.373 to read as follows:

Sec. 21.373. SHAREHOLDER PROPOSALS. (a) This section

applies only to a corporation that:

(1) is formed under the laws of this state;

(2) has a class of equity securities registered under

Section 12(b) of the Securities Exchange Act of 1934;

(3) is admitted to listing on a national securities

exchange;

(4) either:

(A) has its principal office in this state; or

(B) is admitted to listing on a stock exchange

that:

(i) has its principal office in this state;

and

(ii) has received approval by the state

pursuant to Subchapter C, Chapter 4005, Government Code; and

(5) opts into this section by amending its governing

documents and providing notice to shareholders in its proxy

statement.

(b) Except as otherwise provided by a corporation's

governing documents, to submit a matter to the shareholders for

approval at a shareholder meeting, a shareholder, or group of

shareholders, must:

(1) hold no less than the lesser of:

(A) $1,000,000 in market value of the

corporation's securities entitled to vote on the proposal, measured

at the date of submission of the proposal; or

(B) three percent of the corporation's

securities entitled to vote on the proposal;

(2) continuously maintain ownership in the shares

required by Subdivision (1) for at least six months leading up to

and through the shareholder meeting; and

(3) solicit the holders of shares representing at

least 67% of the voting power of shares entitled to vote on the

proposal.

(c) Subsection (b) does not apply to:

(1) director nominations; and

(2) procedural resolutions that are ancillary to the

conduct of the meeting.

(d) If this section applies to a corporation, it shall not

be legally permissible for the shareholders of the corporation to

vote on any matter submitted to a meeting of shareholders by a

shareholder unless:

(1) that proposal has been submitted in compliance

with subsection (b); or

(2) that proposal is exempt under subsection (c).

SECTION 2. This Act takes effect September 1, 2025.