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Texas Business Organizations Code - BUS ORG § 8.102. General Scope of Permissive Indemnification

Current as of January 01, 2024 | Updated by FindLaw Staff

(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.

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Cite this article: FindLaw.com - Texas Business Organizations Code - BUS ORG § 8.102. General Scope of Permissive Indemnification - last updated January 01, 2024 | https://codes.findlaw.com/tx/business-organizations-code/bus-org-sect-8-102.html

Read this complete Texas Business Organizations Code - BUS ORG § 8.102. General Scope of Permissive Indemnification on Westlaw

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