Texas Business Organizations Code - Section 1.004. Independent Person
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§ 1.004. INDEPENDENT PERSON. (a) For purposes of this
code, a person is independent with respect to considering the
disposition of a claim or challenge regarding a contract or
transaction, or particular or alleged conduct, if the person:
(1) is disinterested;
(2) either:
(A) is not an associate, or member of the
immediate family, of a party to the contract or transaction or of a
person who is alleged to have engaged in the conduct that is the
subject of the claim or challenge; or
(B) is an associate to a party or person
described by Paragraph (A) that is an entity if the person is an
associate solely because the person is a governing person of the
entity or of the entity's subsidiaries or associates;
(3) does not have a business, financial, or familial
relationship with a party to the contract or transaction, or with
another person who is alleged to have engaged in the conduct, that
is the subject of the claim or challenge that could reasonably be
expected to materially and adversely affect the judgment of the
person in favor of the party or other person with respect to the
consideration of the matter; and
(4) is not shown, by a preponderance of the evidence,
to be under the controlling influence of a party to the contract or
transaction that is the subject of the claim or challenge or of a
person who is alleged to have engaged in the conduct that is the
subject of the claim or challenge.
(b) For purposes of Subsection (a), a person does not have a
relationship that could reasonably be expected to materially and
adversely affect the judgment of the person regarding the
disposition of a matter that is the subject of a claim or challenge
and is not otherwise under the controlling influence of a party to a
contract or transaction that is the subject of a claim or challenge
or that is alleged to have engaged in the conduct that is the
subject of a claim or challenge solely because:
(1) the person has been nominated or elected as a
governing person by a person who is interested in the contract or
transaction or alleged to be engaged in the conduct that is the
subject of the claim or challenge;
(2) the person receives normal fees or similar
customary compensation, reimbursement for expenses, or benefits as
a governing person of the entity;
(3) the person has a direct or indirect equity
interest in the entity;
(4) the entity has, or its subsidiaries have, an
interest in the contract or transaction or was affected by the
alleged conduct;
(5) the person or an associate of the person receives
ordinary and reasonable compensation for reviewing, making
recommendations regarding, or deciding on the disposition of the
claim or challenge; or
(6) the person, an associate of the person, other than
the entity or its associates, or an immediate family member has a
continuing business relationship with the entity that is not
material to the person, associate, or family member.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
Section: 1.001 1.002 1.003 1.004 1.005 1.006 1.007 1.008 1.009 1.051 1.052 1.053 1.054 1.101 1.102
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Last modified: August 10, 2007
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