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Texas Business Organizations Code - Section 8.103. Manner For Determining Permissive Indemnification

Legal Research Home > Texas Lawyer > Business Organizations Code > Texas Business Organizations Code - Section 8.103. Manner For Determining Permissive Indemnification

§ 8.103. MANNER FOR DETERMINING PERMISSIVE 
INDEMNIFICATION.  (a) Except as provided by Subsections (b) and 
(c), the determinations required under Section 8.101(a) must be 
made by:
		(1)  a majority vote of the governing persons who at the 
time of the vote are disinterested and independent, regardless of 
whether the governing persons who are disinterested and independent 
constitute a quorum;
		(2)  a majority vote of a committee of the governing 
authority of the enterprise if the committee:
			(A)  is designated by a majority vote of the 
governing persons who at the time of the vote are disinterested and 
independent, regardless of whether the governing persons who are 
disinterested and independent constitute a quorum;  and
			(B)  is composed solely of one or more governing 
persons who are disinterested and independent;
		(3)  special legal counsel selected by the governing 
authority of the enterprise, or selected by a committee of the board 
of directors, by vote in accordance with Subdivision (1) or (2);
		(4)  the owners or members of the enterprise in a vote 
that excludes the ownership or membership interests held by each 
governing person who is not disinterested and independent;  or
		(5)  a unanimous vote of the owners or members of the 
enterprise.           
	(b)  If special legal counsel determines under Subsection 
(a)(3) that a person meets the standard under Section 8.101(a)(1), 
the special legal counsel shall determine whether the amount of 
expenses other than a judgment is reasonable under Section 
8.101(a)(2) but may not determine whether indemnification should be 
paid under Section 8.101(a)(3).  The determination whether 
indemnification should be paid must be made in a manner specified by 
Subsection (a)(1), (2), (4), or (5).
	(c)  A provision contained in the governing documents of the 
enterprise, a resolution of the owners, members, or governing 
authority, or an agreement that requires the indemnification of a 
person who meets the standard under Section 8.101(a)(1) constitutes 
a determination under Section 8.101(a)(3) that indemnification 
should be paid even though the provision may not have been adopted 
or authorized in the same manner as the determinations required 
under Section 8.101(a).  The determinations required under Sections 
8.101(a)(1) and (2) must be made in a manner provided by Subsection 
(a).

Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.  Amended by 
Acts 2005, 79th Leg., ch. 64, § 22, eff. Jan. 1, 2006.

Last modified: August 11, 2007