Right to Indemnification: Subject to the limitations and conditions as provided
in this Article VIII, each person who was or is made a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative, or
investigative (hereinafter called a Proceeding), or any appeal in such a Proceeding or any inquiry or investigation that could lead to such a Proceeding, by reason of the fact that he or she (or a person of whom he or she is the legal
representative) is or was a director or officer of the corporation (or while a director or officer of the corporation is or was serving at the request of the corporation as a director, officer, partner, venturer, proprietor, trustee, employee,
agent, or similar functionary of another foreign or domestic corporation, partnership, joint venture, proprietorship, trust, employee benefit plan, or other enterprise) shall be indemnified by the corporation to the fullest extent permitted by Texas
law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide
prior to such amendment) against judgments, penalties (including excise and similar taxes and punitive damages), fines, settlements, and reasonable expenses (including, without limitation, court costs and attorneys fees) actually incurred by
such person in connection with such Proceeding, appeal, inquiry or investigation, and indemnification under this Article VIII shall continue as to a person who has ceased to serve in the capacity which initially entitled such person
to indemnity hereunder; provided, however, that in no case shall the corporation indemnify any such person (or the legal representative of any such person) otherwise than for his or her reasonable expenses, in respect of any Proceeding (a) in
which such person shall have been finally adjudged by a court of competent jurisdiction (after exhaustion of all appeals therefrom) to be liable on the basis that personal benefit was improperly received by him or her, whether or not the benefit
resulted from an action taken in such persons official capacity; or (b) in which such person shall have been found liable to the corporation; and provided, further, that the corporation shall not indemnify any such person for his or her
reasonable expenses actually incurred in connection with any Proceeding in which he or she shall have been found liable for willful or intentional misconduct in the performance of his or her duty to the corporation. The rights granted pursuant to
this Article VIII shall be deemed contract rights, and no amendment, modification, or repeal of this Article VIII shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings
arising prior to any such amendment, modification, or repeal. It is expressly acknowledged that the indemnification provided in this Article VIII could involve indemnification for negligence or under theories of strict
liability.
Article Ten of the Companys Restated Certificate of Formation provides that a director of the corporation
shall not be liable to the corporation or its shareholders for monetary damages for an act or omission in the directors capacity as a director, subject to certain limitations.
Sections 8.101(a) and (b) of the Texas Business Organizations Code provide that, subject to certain limitations, a corporation may
indemnify a governing person, former governing person, or delegate who was, is, or is threatened to be made a respondent in a proceeding to the extent that it is determined that:
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(i) |
in the case of conduct in the persons official capacity, that the persons conduct was in the
corporations best interests; and |
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(ii) |
in any other case, that the persons conduct was not opposed to the corporations best interests; and
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(C) |
in the case of a criminal proceeding, did not have a reasonable cause to believe the persons conduct was
unlawful. |
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(2) |
with respect to expenses, the amount of expenses other than a judgment is reasonable; and
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(3) |
indemnification should be paid. |
(b) |
Actions taken or omitted by a governing person or delegate with respect to an employee benefit plan in the
performance of the persons 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.
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The Company enters into indemnification agreements with the members of its Board of Directors (each an
Indemnitee). Each indemnification agreement requires the Company to indemnify each Indemnitee to the fullest extent permitted by the Texas Business Organizations Code and any successor statute thereto when such successor statute becomes
applicable to the Company. The Company will also make the Indemnitee whole for taxes imposed on the indemnification payments and for costs in any action to establish Indemnitees right to indemnification, whether or not wholly successful.