Item 6.
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Indemnification of Directors and Officers.
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The Company is a North Carolina corporation. The Companys Amended and Restated Articles of Incorporation
contain a provision authorized by Section 55-2-02(b)(3) of the North Carolina Business Corporation Act (the NC BCA) eliminating the personal
liability of a director arising out of an action whether by or in the right of the corporation or otherwise for monetary damages for breach of any duty of a director, except for liability with respect to (i) acts or omissions that the director
at the time of such breach knew or believed were clearly in conflict with the best interests of the corporation, (ii) any transaction from which the director derived an improper personal benefit as that term is defined in the NC
BCA, (iii) acts or omissions occurring prior to the effective date of the Articles or (iv) acts or omissions with respect to which the NC BCA does not permit the limitation of liability.
The Company has also adopted indemnification provisions authorized by NC BCA
Section 55-8-57 which obligate the corporation:
(1)
to indemnify any person who serves or has served as a director or officer against (i) any liability for or obligation to pay reasonable expenses, including attorneys fees, incurred by such officer or director in connection with any
proceeding arising out of such directors or officers status as such or any activities of such director or officer in such capacity and (ii) any liability for or obligation to pay any judgment, settlement, penalty or fine (including
an excise tax assessed with respect to an employee benefit plan) in any such proceeding; and
(2) to indemnify any person who serves or
has served as a director or officer and who, at the request of the corporation, serves or has served as a director, officer, partner, trustee employee or agent of another corporation, partnership, joint venture, trust or other enterprise or as a
trustee or administrator under an employee benefit plan against (i) any liability for or obligation to pay reasonable expenses, including attorneys fees, incurred by such officer or director in connection with any proceeding arising out
of such persons status as a director or officer of the corporation or as a director, officer, partner, trustee, employee or agent of such other corporation, partnership, joint venture, trust or other enterprise or as a trustee or administrator
under an employee benefit plan or any activities of such director or officer in any of such capacities and (ii) any liability for or obligation to pay any judgment, settlement, penalty or fine (including an excise tax assessed with respect to
any employee benefit plan) in any such proceeding.
Provided however, such indemnification does not extend to any liability or expense the
director or officer may incur on account of his or her activities which, at the time taken, were known or believed by such director or officer to be clearly in conflict with the best interests of the corporation
Pursuant to Section 55-8-51 of NC BCA, a North Carolina
corporation may indemnify a director against liability in any proceeding to which the director is made a party because of his status as such if the director (i) conducted himself in good faith, (ii) reasonably believed that his conduct in
his official capacity was in the corporations best interests and, in all other cases, that his conduct was at least not opposed to the corporations best interests and (iii) in the case of a criminal proceeding, had no reasonable
cause to believe his conduct was unlawful.
Pursuant to
Section 55-8-52 of the NC BCA, a North Carolina corporation is required to indemnify a director who was wholly successful, on the merits or otherwise, in the
defense of any proceeding to which he was a party because he is or was a director against reasonable expenses incurred by him in connection with the proceeding.
Pursuant to Section 55-8-54 of the NC BCA, the court may
order indemnification of a director of a North Carolina corporation in any proceeding to which the director is a party if the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances.
The term proceeding as used herein includes any threatened, pending or completed civil, criminal, administrative or investigative
action, suit or proceeding (and any appeal therein), whether formal or informal and whether or not brought by or on behalf of the corporation.