Texas Business Organizations Code
Sec. § 8.101
Permissive Indemnification


(a)

An enterprise may indemnify a governing person, former governing person, or delegate who was, is, or is threatened to be made a respondent in a proceeding to the extent permitted by Section 8.102 (General Scope of Permissive Indemnification) if it is determined in accordance with Section 8.103 (Manner for Determining Permissive Indemnification) that:

(1)

the person:

(A)

acted in good faith;

(B)

reasonably believed:

(i)

in the case of conduct in the person’s official capacity, that the person’s conduct was in the enterprise’s best interests; and

(ii)

in any other case, that the person’s conduct was not opposed to the enterprise’s best interests; and

(C)

in the case of a criminal proceeding, did not have a reasonable cause to believe the person’s conduct was unlawful;

(2)

with respect to expenses, the amount of expenses other than a judgment is reasonable; and

(3)

indemnification should be paid.

(b)

Action taken or omitted by a governing person or delegate with respect to an employee benefit plan in the performance of the person’s duties for a purpose reasonably believed by the person to be in the interest of the participants and beneficiaries of the plan is for a purpose that is not opposed to the best interests of the enterprise.

(c)

Action taken or omitted by a delegate to another enterprise for a purpose reasonably believed by the delegate to be in the interest of the other enterprise or its owners or members is for a purpose that is not opposed to the best interests of the enterprise.

(d)

A person does not fail to meet the standard under Subsection (a)(1) solely because of the termination of a proceeding by:

(1)

judgment;

(2)

order;

(3)

settlement;

(4)

conviction; or

(5)

a plea of nolo contendere or its equivalent.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
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Last accessed
Jul. 12, 2020