Item 6.
Indemnification
of Directors and Officers.
Section
145 of the General Corporation Law of the State of Delaware (the “DGCL”) provides that a corporation may indemnify
directors and officers as well as other employees and individuals against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending
or completed actions, suits or proceedings in which such person is made a party by reason of such person being or having been a
director, officer, employee or agent of the corporation. The DGCL provides that Section 145 is not exclusive of other rights to
which those seeking indemnification may be entitled under any charter provisions, bylaws, agreement, vote of stockholders or disinterested
directors or otherwise.
Our Third
Amended and Restated Certificate of Incorporation (the “Charter”) generally provides that we will indemnify our directors
and officers to the full extent permitted by applicable law.
Our Charter
expressly provides :
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for indemnification, to the maximum extent permitted by applicable law, against all
liability and losses suffered and expenses (including attorney’s fees) reasonably incurred, of any person (a
“Covered Person”) who was or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”),
by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was our director or
officer or, while our director or officer, is or was serving at our request as a
director, officer, employee or agent of another entity or enterprise, including service with respect to employee benefit
plans;
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for the prepayment of expenses (including attorney’s fees) to the extent not prohibited
by applicable law;
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that if a claim for indemnification or advancement of expenses is not paid in full within
30 days, the Covered Person may file suit to recover the unpaid amount and, if successful in whole or in part, shall be entitled
to be paid the expense of prosecuting such claim;
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that the rights provided in the indemnification provision are not exclusive; and
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that we are the indemnitor of first resort and if any third party pays or causes to be paid
the indemnifiable amounts then the third party shall be fully subrogated to all rights of the Covered Person with respect to such
payment, and we will fully indemnify, reimburse and hold harmless such third party for all such payments actually made by the third
party.
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Our Charter
also specifies that any amendment or repeal of this provision will not adversely affect any right or protection in respect of any
act or omission occurring prior to the time of the amendment or repeal. Finally, we may also advance expenses and indemnify persons
other than Covered Persons to the extent permitted by applicable law.
Section
102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of the corporation shall
not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (1) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (2) for
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) for unlawful payments
of dividends or unlawful stock repurchases, redemptions or other distributions or (4) for any transaction from which the director
derived an improper personal benefit.
Our Charter
states that directors will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary
duty as a director to the maximum extent allowed under the DGCL.
These
provisions only apply to breaches of duty by directors as directors and not in any other corporate capacity, such as officers.
In addition, these provisions limit liability only for breaches of fiduciary duties under the DGCL and not for violations of other
laws such as the U.S. federal securities laws and U.S. federal and state environmental laws. As a result of these provisions in
our Charter, our stockholders may be unable to recover monetary damages against directors for actions taken by them that constitute
negligence or gross negligence or that are in violation of their fiduciary duties. However, our stockholders may obtain injunctive
or other equitable relief for these actions. These provisions also reduce the likelihood of derivative litigation against directors
that might benefit us.
On
July 27, 2016, we entered into indemnification agreements (the “Indemnification Agreements”) with Jeff Hastings,
Brian Beatty, Brent Whiteley, Mike Scott, Darin Silvernagle, Ryan Abney, Gary Dalton, L. Melvin Cooper, Michael Kass and
Jacob Mercer (each, an “Indemnitee”). The Indemnification Agreements supersede and replace the indemnification
agreements previously entered into with any such individuals. The Indemnification Agreements are intended to provide
indemnification rights for actions or omissions to act while the Indemnitees are or were acting as our directors, officers,
employees or agents (among certain other limited roles). In connection therewith, we will indemnify (except in
certain limited circumstances) the Indemnitees against, among other things, all expenses (including attorneys’ fees),
damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), Employee Retirement Income
Security Act of 1974 losses and amounts paid in settlement pursuant to (i) any threatened, asserted, pending or completed
claim, demand, action, suit or proceeding, whether civil, criminal, administrative, arbitrative, investigative or other, and
whether made pursuant to federal, state or other law, and (ii) any threatened, pending or completed inquiry or investigation,
whether made, instituted or conducted by or at our behest or any other person, including any federal, state or other court or
governmental entity or agency and any committee or other representative of any corporate constituency, to the fullest extent
permitted by applicable law. In addition, the Indemnification Agreements provide for the advancement of expenses incurred by
the Indemnitees in connection with any proceeding covered by the Indemnification Agreements, provided that the
Indemnitees must repay the advanced amounts if, upon conclusion of the proceeding, it is ultimately determined that the
Indemnitees were not entitled to indemnification.
In addition,
the Indemnification Agreements provide that we will use all commercially reasonable efforts to obtain and maintain in effect for
so long as the Indemnitee may have any liability or potential liability by reason of his relationship with us, one or more insurance
policies providing our directors and officers coverage for losses from wrongful acts and omissions and to ensure our performance
of our indemnification obligations under each Indemnification Agreement.
There
is no pending litigation or proceeding involving any of our directors, officers, employees or other agents as to which indemnification
is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any
director, officer, employee or other agent.