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Texas Business Organizations Code - Section 8.102. General Scope Of Permissive Indemnification

Legal Research Home > Texas Lawyer > Business Organizations Code > Texas Business Organizations Code - Section 8.102. General Scope Of Permissive Indemnification

§ 8.102. GENERAL SCOPE OF PERMISSIVE 
INDEMNIFICATION.  (a) Subject to Subsection (b), an enterprise may 
indemnify a governing person, former governing person, or delegate 
against:
		(1)  a judgment;  and                                                         
		(2)  expenses, other than a judgment, that are 
reasonable and actually incurred by the person in connection with a 
proceeding.
	(b)  Indemnification under this subchapter of a person who is 
found liable to the enterprise or is found liable because the person 
improperly received a personal benefit:
		(1)  is limited to reasonable expenses actually 
incurred by the person in connection with the proceeding;
		(2)  does not include a judgment, a penalty, a fine, and 
an excise or similar tax, including an excise tax assessed against 
the person with respect to an employee benefit plan;  and
		(3)  may not be made in relation to a proceeding in 
which the person has been found liable for:
			(A)  wilful or intentional misconduct in the 
performance of the person's duty to the enterprise;
			(B)  breach of the person's duty of loyalty owed 
to the enterprise;  or    
			(C)  an act or omission not committed in good 
faith that constitutes a breach of a duty owed by the person to the 
enterprise.
	(c)  A governing person, former governing person, or 
delegate is considered to have been found liable in relation to a 
claim, issue, or matter only if the liability is established by an 
order, including a judgment or decree of a court, and all appeals of 
the order are exhausted or foreclosed by law.

Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.                     

Last modified: August 11, 2007