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Item 6.
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Indemnification of Directors and Officers
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Section 145 of the Delaware General Corporation Law (the “
DGCL
”) allows for the indemnification of officers, directors, and other corporate agents in terms sufficiently broad to indemnify these persons for liabilities (including reimbursement for expenses incurred) arising under the Securities Act. The Company’s Amended and Restated Certificate of Incorporation (as amended, the “
Charter
”) and Amended and Restated Bylaws (as amended, the “
Bylaws
”) provide for indemnification of the Company’s directors, officers, employees and other agents to the extent and under the circumstances permitted by the DGCL. The Company has also entered into agreements with certain of its officers that will require the Company, among other things, to indemnify such persons to the extent permitted in the Bylaws. In addition, the Company carries directors’ and officers’ liability insurance.
This section of this registration statement provides a description of the material terms of Sections 145 and 102(b)(7) of the DGCL, the Charter and the Bylaws of the Company related to the indemnification of the Company’s directors and officers and the limitation of the personal liability of the directors. The following description is intended as a summary only and is qualified in its entirety by reference to the complete text of the foregoing sections of the DGCL as well as the Charter and Bylaws.
Indemnification Provisions
Section 145 of DGCL
Section 145(a) of the DGCL provides, among other things, that a Delaware corporation may indemnify any person who was or is, or is threatened to be made, a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action, suit or proceeding by or in the right of such corporation described below) by reason of the fact that such person:
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is or was a director, officer, employee or agent of such corporation; or
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is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or other enterprise.
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A corporation may indemnify such person against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if the person:
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acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the corporation; and
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with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.
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Section 145(b) of the DGCL provides that a Delaware corporation may indemnify any person who was or is, or is threatened to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor due to the fact that such person acted in any of the capacities set forth above against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the corporation. However, a corporation may not indemnify such person in respect of any claim, issue or matter as to which such person is adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought determines that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the Court of Chancery or such other court deems proper.
Section 145(c) of the DGCL further provides that, to the extent that an officer or director of a Delaware corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to above, or in the defense of any claim, issue or matter related to such action, suit or proceeding, the corporation must indemnify such person against the expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with such defense.
Pursuant to Section 145(e), a Delaware corporation may, in advance of the final disposition of any civil, criminal, administrative or investigative action, suit or proceeding, pay the expenses (including attorneys’ fees) incurred by any officer or director in defending any such action, suit or proceeding, provided that the officer or director undertakes to repay such amount if it is ultimately determined that such person is not entitled to the corporation’s indemnification.
The indemnification and advancement of expenses provided by Section 145 of the DGCL are not exclusive of any other rights to which a person may be entitled under any corporation’s bylaws, agreements, vote of stockholders or disinterested directors or otherwise. Furthermore, Section 145(g) of the DGCL authorizes a Delaware corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145 of the DGCL.
Charter and Bylaws
The Charter provides that the Company shall, to the fullest extent permitted by Section 145 of the DGCL (as may be amended from time to time), indemnify all persons who the Company has the power to indemnify under Section 145 of DGCL against all expenses, liabilities or other matters covered by such Section 145.
In addition, subject to certain conditions described below, the Bylaws require the Company to indemnify any person entitled to indemnification under Section 145 of the DGCL to the fullest extent permitted by applicable law against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such person. The Company is required to indemnify a director or an executive officer in connection with a proceeding initiated by that person against the Company or its directors, officers, employees or other agents only if (i) such indemnification is
expressly required under applicable law, (ii) the board of directors of the Company (the “
Board
”) authorized such proceeding, (iii) such indemnification is provided by the Company, in its sole discretion, or (iv) such indemnification is required to be made under Section 63 of the Bylaws, pursuant to the powers vested in the Company under the DGCL or other applicable law.
The Bylaws provide that any amount that a person who was or is serving at the Company’s request as a director, officer, employee or agent of another corporation or other entity may collect as indemnification from such other entity reduces the Company’s obligation to indemnify such person.
The Bylaws require the payment of expenses (including attorneys’ fees) incurred in defending any proceeding in advance of the final disposition of such proceeding if requested, but only upon receipt of an undertaking by the director or officer to repay all amounts advanced if it is ultimately determined that such person is not entitled to indemnification and subject to certain exceptions.
Under the Bylaws, a director or executive officer is deemed to have acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and to have had no reasonable cause to believe his or her conduct was unlawful if he or she acted based on information prepared or presented by: (i) one or more officers or employees of the Company whom such director or executive officer believed to be reliable and competent in the matters presented; (ii) counsel, independent accountants or other persons as to matters which the director or executive officer believed to be within such person’s professional competence; and (iii) with respect to a director, a committee of the Board on which the director did not serve, as to matters within such Committee’s designated authority, and which the director believed to merit confidence, so long as, in each case, the director or executive officer did not have knowledge that would cause such reliance to be unwarranted. The Bylaws also provide that certain terminations of proceedings do not by themselves create a presumption that a person did not act in good faith and in a manner which he or she believed to be in and not opposed to the best interests of the Company and that he or she had reasonable cause to believe his or her conduct was unlawful.
The Bylaws provide that the Board may authorize the maintenance of insurance on behalf of any person entitled to indemnification under Section 145 of the DGCL against any liability incurred by such person, whether or not the Company would have the power to indemnify such person against such liability under the provisions of Article IX of the Bylaws or the DGCL. Consistent with the provisions of Section 145 of the DGCL and the Bylaws, the Company maintains directors’ and officers’ liability insurance for the benefit of the Company and its stockholders in the amount of $40,000,000.
The indemnification rights provided by the Charter and Bylaws are not exclusive of any other rights indemnitees may have under any statute, certificate of incorporation, bylaws, agreement, vote of stockholders or disinterested directors or otherwise, as applicable.
Any repeal or modification of the foregoing provisions which are contained in Article IX of the Bylaws will not adversely affect any right or protection under such Article IX of any person in respect of any matters occurring prior to the time of such repeal or modification.
Limitation of Personal Liability
Section 102(b)(7) of the DGCL provides that a Delaware corporation may include in its certificate of incorporation a provision eliminating or limiting personal liability of its directors or stockholders for monetary damages for breach of a director’s fiduciary duty. However, no such provision may eliminate or limit the liability of a director for: (i) any breach of the director’s duty of loyalty to the corporation or its stockholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) unlawful payment of a dividend or unlawful stock purchase or redemption as set forth in Section 174 of the DGCL; or (iv) any transaction from which the director derived an improper personal benefit.
The Charter eliminates the personal liability of the Company’s directors to the fullest extent permitted by Section 102(b)(7) of the DGCL and provides that no amendment or repeal of Article XI of the Charter (which contains such limitation) applies to the liability of any director for any acts or omissions of such director occurring prior to the effective date of such amendment or repeal. In addition, the Bylaws provide that no director will be personally liable to the Company or its stockholders for monetary damages for breach of the director’s fiduciary duty consistent with Section 102(b)(7) of the DGCL.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement;
Provided, however
, That,
(A) Paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the Company pursuant to Sections 13 or 15(d) of the Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company’s annual report pursuant to Sections 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.