Section 1. AQHA shall indemnify, to the fullest extent permitted by these bylaws or the laws of the State of Texas, any person made or threatened to be made a defendant or respondent to any threatened or pending action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the person (a) was or is a director, trustee, officer, employee, member of a committee or member of a council created pursuant to this Official Handbook or duly designated by the Executive Committee of AQHA, or (b) was or is serving any other corporation, partnership, joint venture, trust or other business or charitable enterprise as a director, trustee, officer or employee at the specific request of AQHA (hereinafter "indemnitee"). This indemnification is available only if, with respect to the matters made the basis of the underlying action, suit or proceeding, such indemnitee:
acted in good faith,
acted in a manner he or she reasonably believed to be in the best interests of AQHA, and
had no reasonable cause to believe his or her conduct was illegal or unlawful.
The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or on a plea of nolo contendere or its equivalent, shall not of itself, create an irrebuttable presumption that the indemnitee did not meet the requirements set forth above.
This indemnity shall include all usual and customary expenses incurred in defense of or response to the action, suit or proceeding including, attorneys' fees, costs, judgments, fines and amounts paid in settlement that are reasonably incurred by such person in connection with such action, suit or proceeding. The indemnification provided herein shall inure to the benefit of the indemnitee and his or her heirs, executors or administrators and shall not be exclusive of any other rights to which the indemnitee may be entitled by virtue of the laws of the State of Texas, any other Bylaw of AQHA, a written agreement with AQHA, or the vote of the Executive Committee of AQHA.
Notwithstanding the above provisions, a person shall not be indemnified with respect to any action, suit or proceeding filed by or undertaken by the AQHA against the person to whom indemnity would otherwise be available.
Section 2.Conditions Precedent and Rights of AQHA. To preserve this right of indemnity, an indemnitee shall promptly notify AQHA of any actual or threatened action, suit or proceeding, whereupon AQHA shall have the right to, but not the obligation to, assume and direct the defense thereof through attorney(s) selected and paid for by AQHA. If, in its sole discretion, AQHA, by and through its Executive Committee, determines that the failure of the indemnitee to promptly notify AQHA of any actual or threatened action, suit or proceeding prejudiced the rights of AQHA under this provision, it may deny indemnity to the person to whom indemnity would otherwise be available. The selection of attorney(s) will be subject to the consent of the indemnitee, which consent will not be unreasonably withheld. Any settlement, monetary or otherwise, of the action, suit or proceeding shall require the express consent of the Executive Committee of AQHA, and absent such consent, shall be the sole responsibility of the indemnitee.