Source: https://chowinslaw.com/resources/texas-business-laws/282-indemnification-and-insurance-texas-business-organizations
Timestamp: 2019-04-23 04:06:49+00:00

Document:
(1) "Delegate" means a person who, while serving as a governing person of an enterprise, is or was serving at the request of that enterprise as a representative of another enterprise, another organization, or an employee benefit plan. A person is a delegate to an employee benefit plan if the performance of the person's official duties to the enterprise also imposes duties on or otherwise involves service by the person to the plan or participants in or beneficiaries of the plan.
(2) "Enterprise" means a domestic entity or an organization subject to this chapter. The term includes a predecessor enterprise.
(4) "Former governing person" means a person who was a governing person of an enterprise.
(5) "Judgment" includes an arbitration award.
(B) with respect to a person other than a governing person, the elective or appointive office, if any, in the enterprise held by the person or the relationship undertaken by the person on behalf of the enterprise.
(B) any other transaction in which the enterprise assumes the liabilities of the predecessor enterprise and the liabilities that are the subject matter of this chapter are not specifically excluded.
(C) an inquiry or investigation that could lead to an action or proceeding described by Paragraph (A).
(B) serving a similar function for an enterprise or other organization or for an employee benefit plan.
(10) "Respondent" means a person named as a respondent or defendant in a proceeding.
§ 8.002. APPLICATION OF CHAPTER.
(3) insurance or another arrangement to indemnify or hold harmless a governing person.
§ 8.003. LIMITATIONS IN GOVERNING DOCUMENTS.
(a) The certificate of formation of an enterprise may restrict the circumstances under which the enterprise must or may indemnify or may advance expenses to a person under this chapter.
(b) The written partnership agreement of a limited partnership may restrict the circumstances in the same manner as the certificate of formation under Subsection (a).
§ 8.004. LIMITATIONS IN CHAPTER.
Except as provided in § 8.151, a provision for an enterprise to indemnify or advance expenses to a governing person is valid only to the extent it is consistent with this chapter.
(a) An enterprise shall indemnify a governing person, former governing person, or delegate against reasonable expenses actually incurred by the person in connection with a proceeding in which the person is a respondent because the person is or was a governing person or delegate if the person is wholly successful, on the merits or otherwise, in the defense of the proceeding.
(b) A court that determines, in a suit for indemnification, that a governing person, former governing person, or delegate is entitled to indemnification under this § shall order indemnification and award to the person the expenses incurred in securing the indemnification.
(a) On application of a governing person, former governing person, or delegate and after notice is provided as required by the court, a court may order an enterprise to indemnify the person to the extent the court determines that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances.
(2) because the person improperly received a personal benefit, without regard to whether the benefit resulted from an action taken in the person's official capacity.
(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.
(5) a plea of nolo contendere or its equivalent.
§ 8.102. GENERAL SCOPE OF PERMISSIVE INDEMNIFICATION.
(2) expenses, other than a judgment, that are reasonable and actually incurred by the person in connection with a proceeding.
(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.
§ 8.103. MANNER FOR DETERMINING PERMISSIVE INDEMNIFICATION.
(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 § 8.101(a)(1), the special legal counsel shall determine whether the amount of expenses other than a judgment is reasonable under § 8.101(a)(2) but may not determine whether indemnification should be paid under § 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 § 8.101(a)(1) constitutes a determination under § 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 § 8.101(a). The determinations required under §§ 8.101(a)(1) and (2) must be made in a manner provided by Subsection (a).
(d) With respect to a limited partnership, a vote of a majority-in-interest of the limited partners in a vote that excludes the interest held by each general partner who is not disinterested and independent constitutes a determination under Subsection (a)(4). For purposes of this subsection, "majority-in-interest" means, with respect to limited partners, limited partners who own more than 50 percent of the current percentage or other interest in the profits of the partnership that is owned by all of the limited partners.
§ 8.104. ADVANCEMENT OF EXPENSES TO PRESENT GOVERNING PERSONS OR DELEGATES.
(2) a written undertaking by or on behalf of the person to repay the amount paid or reimbursed if the final determination is that the person has not met that standard or that indemnification is prohibited by § 8.102.
(b) A provision in the governing documents of the enterprise, a resolution of the owners, members, or governing authority, or an agreement that requires the payment or reimbursement permitted under this § authorizes that payment or reimbursement after the enterprise receives an affirmation and undertaking described by Subsection (a).
(c) The written undertaking required by Subsection (a)(2) must be an unlimited general obligation of the person but need not be secured and may be accepted by the enterprise without regard to the person's ability to make repayment.
(d) With respect to a limited partnership, a vote of a majority-in-interest of the limited partners in a vote that excludes the interest held by each general partner who is not disinterested and independent constitutes an authorization under Subsection (b). For purposes of this subsection, "majority-in-interest" means, with respect to limited partners, limited partners who own more than 50 percent of the current percentage or other interest in the profits of the partnership that is owned by all of the limited partners.
§ 8.105. INDEMNIFICATION OF AND ADVANCEMENT OF EXPENSES TO PERSONS OTHER THAN GOVERNING PERSONS.
(b) An enterprise shall indemnify an officer to the same extent that indemnification is required under this chapter for a governing person.
(c) A person described by Subsection (a) may seek indemnification or advancement of expenses from an enterprise to the same extent that a governing person may seek indemnification or advancement of expenses under this chapter.
(2) a present or former employee, agent, or officer who is not a governing person of the enterprise and who was, is, or is threatened to be made a respondent in the proceeding.
(e) A determination of indemnification for a person who is not a governing person of an enterprise, including an officer, employee, or agent, is not required to be made in accordance with § 8.103.
§ 8.106. PERMISSIVE INDEMNIFICATION OF AND REIMBURSEMENT OF EXPENSES TO WITNESSES.
Notwithstanding any other provision of this chapter, an enterprise may pay or reimburse reasonable expenses incurred by a governing person, officer, employee, agent, delegate, or other person in connection with that person's appearance as a witness or other participation in a proceeding at a time when the person is not a respondent in the proceeding.
§ 8.151. INSURANCE AND OTHER ARRANGEMENTS.
(2) arising out of the person's status in that capacity.
(b) The insurance or other arrangement established under Subsection (a) may insure or indemnify against the liability described by Subsection (a) without regard to whether the enterprise otherwise would have had the power to indemnify the person against that liability under this chapter.
(c) Insurance or another arrangement that involves self-insurance or an agreement to indemnify made with the enterprise or a person that is not regularly engaged in the business of providing insurance coverage may provide for payment of a liability with respect to which the enterprise does not otherwise have the power to provide indemnification only if the insurance or arrangement is approved by the owners or members of the enterprise.
(c-1) With respect to a limited partnership, a vote of a majority-in-interest of the limited partners constitutes approval of the owners for purposes of Subsection (c).
(4) establish a letter of credit, guaranty, or surety arrangement.
(2) with any insurer or other person considered appropriate by the governing authority, regardless of whether all or part of the stock, securities, or other ownership interest in the insurer or other person is owned in whole or in part by the enterprise.
(f) The governing authority's decision as to the terms of the insurance or other arrangement and the selection of the insurer or other person participating in an arrangement is conclusive. The insurance or arrangement is not voidable and does not subject the governing persons approving the insurance or arrangement to liability, on any ground, regardless of whether the governing persons participating in approving the insurance or other arrangement are beneficiaries of the insurance or arrangement. This subsection does not apply in case of actual fraud.
§ 8.152. REPORTS OF INDEMNIFICATION AND ADVANCES.
(a) An enterprise shall report in writing to the owners or members of the enterprise an indemnification of or advance of expenses to a governing person.
(2) the next submission to the owners or members of a consent to action without a meeting.
(c) The report must be made not later than the first anniversary of the date of the indemnification or advance.

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