||by special legal counsel; or |
||by a majority vote of the shareholders. |
Under Section 414-247 of the HBCA, a corporation may
indemnify and advance expenses to an officer who is a party to a proceeding because the officer is an officer of the corporation:
||to the same extent as a director; and |
||if the person is an officer but not a director, to such further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors, or contract except for liability in
connection with a proceeding by or in the right of the corporation other than for reasonable expenses incurred in connection with the proceeding, or liability arising out of conduct that constitutes (i) receipt by the officer of a financial benefit
to which the officer is not entitled, (ii) an intentional infliction of harm on the corporation or the shareholders or (iii) an intentional violation of criminal law. |
The above-described provision applies to an officer who is also a director if the basis on which the officer is made a party to the proceeding
is an act or omission solely as an officer. Further, an officer of a corporation who is not a director is entitled to mandatory indemnification under Section 414-243 of the HBCA and may apply to a court under Section 414-245 of the HBCA for
indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses.
The HBCA also provides that a corporation may include indemnification provisions in its articles of incorporation that are broader than the
foregoing provisions, except as limited by Section 414-32 of the HBCA
APLs articles of incorporation and bylaws provide that
current and former directors and officers, or directors and officers serving at the request of APL in additional capacities, will be indemnified to the fullest extent permitted under the HBCA. APL may also indemnify any employee or agent to the
fullest extent permitted by the HBCA.
Each of Sunoco Energy Services LLC (SES) and Stripes LLC (each a Texas Guarantor) is a Texas limited liability company.
Sections 8.101 and 8.102 of the Texas Business Organizations Code (TBOC) provide that any governing person, former governing person or delegate of a Texas enterprise may be indemnified against judgments and reasonable expenses actually
incurred by the person in connection with a proceeding, in which he was, is, or is threatened to be made a respondent if: (i) he acted in good faith, (ii) he reasonably believed (a) in the case of conduct in the persons official capacity, that
the persons conduct was in the enterprises best interests or (b) in any other case, that the persons conduct was not opposed to the enterprises best interests, and (iii) in the case of a criminal proceeding, he did not have
reasonable cause to believe that his conduct was unlawful. In connection with any proceeding in which the person is (x) found liable because the person improperly received a personal benefit or (y) found liable to the enterprise, indemnification is
limited to reasonable expenses actually incurred by the person in connection with the proceeding and will not include a judgment, penalty, fine, or an excise or similar tax. Indemnification may not be made in relation to a proceeding in which the
person has been found liable for willful or intentional misconduct in the performance of the persons duty to the enterprise, breach of the persons duty of loyalty owed to the enterprise or an act or omission not committed in good faith
that constitutes a breach of a duty owed by the person to the enterprise. To limit indemnification, liability must be established by an order and all appeals of the order must be exhausted or foreclosed by law.
Under Section 8.051 of the TBOC, a limited liability company will indemnify a director or officer against reasonable expenses incurred by such
director or officer, in connection with a proceeding in which such director or officer is named defendant or respondent because they are or were a director or officer, if they have been wholly successful, on the merits or otherwise, in the defense
of the proceeding. In addition, such indemnification may be ordered in a proper case by a court of law under Section 8.052 of the TBOC.