OFFICE   OF THE   AlTORNEY     GENERAL   OF T’EXAS
                              AUSTIN




                             Opinion Ho            1
                             ?e: c0fiaOiida4237 0r in    ana*
                                 aoqmnies under      t.   400SO&
                                 v a 'I 3.C.S. 19
                                        +
             You hsvs nubbnrilit to        rel questions   Fotolv-
1~8 the eonstruotion 0r m       e8 04 'an 5041 Vemoa*r I?.-
VLed Civil statuts8   0r Tax 0 , 0 1*8     0 0&0lidttti08     0r
iJleuraAnae0oERpRn1atl.



                                                alder Art*. 5040
                                               hutare   MdOF   th.
                                               t neau8arg  to *mend
                                       h it Bmhllo~ 6apltal oboak
                                       5erger.   . . . and req,uire
                                       BfmRta aB repremz%ti.Rngthe




                            eiore insuranira ocmpmla8 dolnd a
                           rinsof4 wNah are and hvo Been subrtanti-
                            controlling sto8kholdare and rrhioh have
                           as.aotual.LJ aompatlng with @ash other,
                           hamp have b4.n~ pradoualy    ortpuxlasQ  under
                     1116 Rtete, atap unite or ocarolidate      upon ma-
     pliaooe    with the terns, or thir law. Suoh aonsol~dation
     shall not be m9otmted         in riolatiori or the anti-trwt
     and *ntl-monopoly lawn or this State. Berore auy rooh
     aousolld8tian shall take plaar Elm psrtlos holding art leas8
     two-thirda    of the capital   ntook of aaeb of the oeeganlos
h.   0. P. Lookhert, pa%s 2



     shell vats in Zevor thereor at e separete aeetlnngor the
     etookholdere of eaah aoapaay    aalled ror euah purpoee.
     Suah neatln$ map bs salled in bhe smnaer provided in
     the by-lawa of the Faepestlve 0os;malee OF the Iawe ondor
     tile& suab ooqmnlee are o~izeaiaed, 14 oalltig eprahl
     awtijpig~ or etookhOldeF8, esoe# that eaoh ntoakboldor
     ehall~,.be notlried by aall. of the time end plaae and obfeot
     or 8wh 8+watg.*

                 .b.rtr5041 pravi4art

             %%ch kapaaiee ptopoeiag to eoaeolldste aey unite
     their aer;ate OS eap pert thersor and beoole inoorpmeted
     in ona body m&r    th* nupe or my OII, OF aolpa of a&
     oarpeniar cc’ &&a~ eny otthas aam4 thet may bo a ilq!j UwJb
     M b iea le
              r teek
                   la a uo i
                           o%
                            o r p QF stita l ltQokhe OF B
                                       te tno
     OS eeoh of the ooqariiee ao.neelldatod,
                                           the eotwl  value
     or whioh 8Doek fa t&a am ocwpuyl ehall beer the came pro-
     portion to the eotual valw et. b&%atoak eurrwSueU   by
     luoh l tooklwl4~r   + We entlti Beebe ot the mapany IPI
     r~Qar:og maah 0       ::,, 8ese tb the MtiFe ae~ata of the
     asw ooqmny, rhloh ““x% a a lhe21 be ago@4 qmn by the beard
     or dlreatora   or 088h”~o         1 gtsorldaQl thetileid hook-
     holder8 (holding tw6-                     s* the rtook) rmr~et the
     muting pwwiue4         r0r .ta, thi,weaodiry               lr tia le,
                                                                       d*lo@a
     tha vahetlon ,ciaemte t&a samnittea ot Hieakhaldon
     appointed br their reageattre bmrdr or dlreotore; 8r
            *2. orprmqmaq     aey teki owir all the aeeete of
     the other aa%pas@e ptopoefm       to oonmlldrta an4 ieme
     6tO6k to theirrtiookbO’ld8Fs iS th* ~FOp6Stt66    tht   th.
     valuq,or 06el~ esoek b6we ta bha eatire value 09 the
     ad&i   of ~$hc.a++qq 6n vi&oh they asa rtoakkol~m?@,
     aad for thijs gmrpcrrrethe aapikl    etoak ei 6uoh pureslrrlng
     emmy    trry be inoreeeed, te now OF mey b* herearter pro-
     vld.4     by l.ew.

             “3:. In ~880 or awealfdatioe  M~V     the fleet 8 t1o11
     pfovided in the   rlret eubdivfeion hereof, the Weeies P BBer
     ehsll upon proof tarnished of ooqlteeoe with the tenan
     hereof’ WXIbeilM: ltlefied thet tba pFWmed        oan*olidetlc#l
     is ror the brrt interseta   of Ohs llay holdem et the
     reepotivo 06?~pmlem and MLde iii r ~@8e)rdt8nOt9 With leW&RU
                                               e;    ~~~~~~~~h~Q~~~~~           P%.
     nnd     delltar   a aharter   CO   *aOh        LL@W   O~puY*
#&. 0. P. xmkhart, pa@           3



                 "4. SuQh ewwolidatfao shall uork a df8uolution                   of
        the oompamie~ absorbd,          but shall in 80     wise   prrjudiaa the
        right of aZig4xadftor        of azip6uoh oorporatianto har4 pap
        want O? hia debt out ot tha assets end property thwsof,
        nor shall w    oreditor be thereby daprived of, nor praju-
        diOti iA .A$' Si&ht Of 80tkOn   than peAfling @I' rxhtin&      01
        whiah msy thsreaftm    aslm   a@Autt  said oo~pany, and mr-
        +icro or S~QIW   Qf the proper offi44rs    or a&eats of ssah
        new tar r4orglrnlldd aorporatlon aball be doam      saitioiant
        aa to all or any of aaah 04qmni4s.
                 "5, AlI pOli410a of insuraaoa   oatstaadlsg agsla8t
        all s&oh aompaaies rhali by raamn      of rueh aonselidatitwz
        br arsumsd by ~tlha rcrorgluriadronpaty, aaQ they *hall carry
        oat the tesiw Of suoh pdlioy on th4        t ot the lnsuror end
        be astitlad 60 all the rlglhta and pr rrllagaa   thsmof   and the
        ;;;;m48    8oo~letiniF: on aaah polfog prior to sa0k aon8ollda-
              .I

                 It   till' ba &ba&xrad    that   the firat option pro+lQe&
br Art.504l pro~ldas teea n0vA80116e~tloA*and oontem letas thr
orgpmlaationof a naw aorposn$lpn to take over the baa zp
                                                       sass and
urotr    or the croanolidatlng, obspaalas; nbilr the sa0oad O~%OA
aontsr   fat48 a *m4rg4rP",with one vf' tha eorporatioo6  eontlaabg
it8   usfstume,  but leqd.rlng Eke a'68ets OS tha othesrri

                11n the 0880 qf      the "ooaablLidntfOn*, 110        e     A4B    Of
                                                  vkdta-
the olmrtor of either of the corpwatians 18 iarolva )
tatas oont4mplatoa thr issuanos ol a sew abrter 60 a 31s~ mm-*.
'PhO 0Epikl. Rt?UOtUSO Of th0 “A4W 0mw”     Il.86 ZtOt 4XO.d tee
aapltal struotwe or aithar of t&s aonsolldstina; BOQpU3lasf all
that 10 reqalred Is .+&at the aapital steak  of thr4aw    0oapaAy~
be distributed among the stoakholdar8 of the 0QA8QliQatkrg 8014
 orstlons in sush ammaw thr6t *the actual vaLlaO* 02 the   sto0k
L the mw oosporatlongdtan to eaah storkheldw        "shall bw    tha
saaa proportion to tim  aotual velua of the steak swrrs&itra4* by
sa6h 8tookbolPer *an tba~antirs assots of tha OOmpaAY aUSS*nd~iag
aash atook     beara    to thn aatlrs     asaat&+f    the   A-     OwQW.*
                                                 i..,
m.       0l.P. Lsakharti, page 1,



IA wbioh ther ire stookhoL40rsa, ths tnormso I@ not man5atvryg
,the, 0apital #took  may s&saia the mm, baa say be rsa pesti-@
Aetgl(((;the st@akholdors ai tbc abaorblne and ths ebsor Ii
                                                          ad,ampany.

                        The 8eOanb branch Of pow                       question ingulres whsthar
upon         *oonrollQatSon*, or apen *aorger” with SA 8ttsnCant                                   larseas*
IA tha Oapita’l #tOOk Of the 8~WIving   oo&qaAy for tha pltrpoae of
lff$ 0tiAgM .ppVStiO+Mt     Plnong tha #tookholders Of t&e respae-
t~M~@oqaaio#    of lts&ock,  partlotiar assets as& ba deai@at&
aa rqpreaaatlng                    the aagltsl        steel     la the woonsolIUatadw 0-w
0~ the Qple hand,                       et   as reproseating      the     Increa8o   In   cupit       swok
la     the     %ar@ax*             on the o6har.

                        XA      tlilr        0i3nneotlon, toa asu oonemaed with the ltseo t
ffh/.           4720 upon oonsolldatioas                       OF aargars       undar Art.        5040 an&
         l



                        hrti.           4720 prorld*sr

                     Vihon the fkst reotlag of the 8toakholdscs shall bm
             hali3 end tha ofriears a? tha OoapaJly ela&r9* the pm#i&wlt
             or lrerstnry shall notify t&o Comlaslon~r~ arndhe aball
             thmroupoa lmmdiataly make, or oauae to be u&o, at t&s 0x0
             pan80 ot the oaapuby, a fall  and thorsagh axamiaatlvn thumb.
             Xf he rinds t&d   all of the erpltel atoak of the ooopuiy,
             awuattn& to not less thm oaa hundred thousaad dollars, hss
             boon tally p&Q up an& Ss In the ou8to&y e? the nff&sars,
             aIth8r la oaah ov seoarltlaa  of t&s olsss in whloh sash o(*r
             paalaa ars luthariaad bl this  chqtaprbo bweet   or lsaa tbeIir
             funds, ho shall ~~QWIta 6wh aoa~paay a aaftifiaate    ai author-
             ity to traaaast aaoh kind or kLnda ot i~snrranes ba&ers~ritbln
             this   stat*         as sash        0rmm8        glsg B    yly tar. WH%as m&ybe aathor-
             Iaad by fita ohartaet wbiPh aertir                        P catsshall axpjra #&It&e
             last day ot Plabroary aart aitor ths data 31 it8 is#uan~&
             Before  suah stitiflorte    la Iasned, AQt l45e thaiI tw@ OffiO~S
             of EUOR company shall emout       atd file with ths GosYissiBd~
             a sworu eohedule of all the. astratr of ~the ooqany -b&tad
             84 hita upon suth esamfnatlaa , shoriug     ths valqa UsraW,    ED-
             sa$har wItA s stern ststaaent     that the 65a4 ere bona ifda,
             %a wuon&ltio~ral      and urianaumbarea pso-party of the oeqaaY
             gad are rotth the emurats tatat#l    in suoh aohdtalo.    HO o~~II&@
             or fir&   aattiffcate or aatbority ohall bo &ra~bml axeapt l.A
             a6dordty             hsrmith,         regardleas      ef the data 0% iillne             0r   tha
             utialto        of inaorporation with the Comalralcw6r.*
&rer 0. P. Iaekhwt,   pets 6
8. ?Y.?ni+ahild
      Aari88M8