| (a) Words and terms used in this subchapter that are
defined in the Trust Company Act or in §21.1 of this title (relating
to Definitions), have the same meanings as defined therein.
(b) The following words and terms, when used in this
subchapter, shall have the following meanings unless the context clearly
indicates the contrary.
(1) Annual report--Formal financial statements and
accompanying narrative of management issued yearly for the benefit
of shareholders and other interested parties.
(2) Chartering agency--A government authority that
has chartering jurisdiction over an entity involved in a transaction
under this subchapter.
(3) Corporation or domestic corporation--A corporation
for profit subject to the provisions of the Texas Business Organizations
Code, except a foreign corporation.
(4) Current financial statements--Audited financial
statements dated as of a date not more than 180 days prior to the
date of submission of an application, or unaudited financial statements
dated as of a date not more than 90 days prior to the date of submission
of an application.
(5) Fiduciary institution--A bank, savings association,
savings bank, credit union, or other financial institution with the
power to act as a fiduciary under applicable law.
(6) Low-quality asset--An asset as defined in 12 United
States Code, §371c(b)(10), currently an asset that falls in any
one or more of the following categories:
(A) an asset classified as "substandard," "doubtful,"
or "loss," or treated as "other loans especially mentioned" in the
most recent report of examination or inspection of an affiliate prepared
by either a federal or state supervisory agency;
(B) an asset in a nonaccrual status;
(C) an asset on which principal or interest payments
are more than 30 days past due; or
(D) an asset whose terms has been renegotiated or compromised
due to the deteriorating financial condition of the obligor.
(7) Material administrative proceeding--A past or pending
proceeding by a state, federal, or foreign regulatory agency against
the applicant or other person involved in a transaction under this
subchapter that resulted in or could result in the issuance of a cease
and desist, removal, enforcement action, determination letter or other
order, including an order of supervision or conservatorship; excluding,
however, a past proceeding that resulted in an order, other than a
removal order, that has been satisfied or otherwise terminated more
than five years prior to the date the application or notice requesting
such information is submitted.
(8) Material legal proceeding--
(A) a past or pending criminal proceeding against the
applicant or other person involved in a transaction under this subchapter
that resulted or may result in conviction of the applicant or other
person of a crime under a state or federal law or the law of a foreign
country relating to fiduciaries, banks or other financial institutions,
securities, financial instrument reporting, or another crime involving
moral turpitude; or
(B) a past or pending proceeding that has or may result
in a judgment against the applicant or other person or entity involved
in a transaction under this subchapter and the loss contingency must
be disclosed in the financial statements of the entity under generally
accepted accounting principles, or is otherwise material.
(9) Merger--A transaction that is:
(A) the division of a trust company into two or more
new trust companies, fiduciary institutions, or other entities, or
into a surviving trust company and one or more new trust companies,
fiduciary institutions, or other entities; or
(B) the combination of one or more trust companies
with one or more fiduciary institutions or other entities, resulting
in:
(i) one or more surviving trust companies, fiduciary
institutions, or other entities;
(ii) the creation of one or more new trust companies,
fiduciary institutions, or other entities; or
(iii) one or more surviving trust companies, fiduciary
institutions, or other entities and the creation of one or more new
trust companies, fiduciary institutions, or other entities.
(10) Other entity--An entity, whether or not organized
for profit, including a corporation, limited or general partnership,
joint venture, joint stock company, cooperative, association, or another
legal entity organized pursuant to the laws of this state or another
state or country to the extent such laws or the constituent documents
of that entity, consistent with such laws, permit that entity to enter
into a merger or share exchange subject to this subchapter.
(11) Principal executive officer--An officer primarily
responsible for the execution of board policies and operation of a
trust company or other entity.
(12) Purchase of assets--The purchase other than in
the ordinary course of business of all, substantially all, or a part
of the assets of a trust company, fiduciary institution, or other
entity, including but not limited to fiduciary rights pertaining to
client accounts.
(13) Regulatory restriction--A memorandum of understanding,
determination letter, notice of determination, order to cease and
desist, or other state or federal administrative enforcement order
issued by a state or federal banking regulatory agency, or another
limitation imposed on a fiduciary institution or other entity by a
state or federal banking regulatory agency that restricts its ability
to act without authorization from the regulatory agency imposing the
condition.
(14) Resulting trust company--A trust company that
is a surviving or newly created entity in a merger.
(15) Sale of assets--The sale, lease, exchange, or
other disposition of substantially all of the assets of a trust company,
including but not limited to fiduciary rights pertaining to client
accounts, other than in the ordinary course of business.
(16) Share exchange--A transaction by which one or
more trust companies, fiduciary institutions, or other entities acquire
all of the outstanding shares of one or more classes or series of
one or more trust companies under the authority of Finance Code, §182.301,
and the Texas Business Organizations Code.
(17) Trust company--A state trust company as defined
by Finance Code, §181.002(a).
(18) Verified--Documents submitted by the applicant
that have been attested to as true and correct, but not necessarily
notarized.
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