Texas § BO.8.103 - MANNER FOR DETERMINING PERMISSIVE INDEMNIFICATION

§ BO.8.103. MANNER FOR DETERMINING PERMISSIVE INDEMNIFICATION

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 governing authority, 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). (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. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006. Amended by: Acts 2005, 79th Leg., Ch. 64 (H.B. 1319 ), Sec. 22, eff. January 1, 2006. Acts 2007, 80th Leg., R.S., Ch. 688 (H.B. 1737 ), Sec. 41, eff. September 1, 2007. Acts 2011, 82nd Leg., R.S., Ch. 139 (S.B. 748 ), Sec. 5, eff. September 1, 2011.