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Item 6.
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Indemnification of Directors and Officers
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Legally Authorized
Indemnification
. Under PRGX’s articles of incorporation, bylaws, and Georgia law, PRGX may indemnify (or obligate itself to indemnify, pursuant to an agreement or otherwise) a director or officer for any liability or expenses incurred in
any of several types of legal proceedings and lawsuits, whether threatened, pending or completed; whether civil, criminal, administrative, arbitrative, or investigative; and whether formal or informal.
However, PRGX may not indemnify any director or officer who has been adjudged liable or is subjected to injunctive relief for any of the
following:
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misappropriation of a business opportunity;
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intentional misconduct or a knowing violation of law;
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receipt of an improper personal benefit; or
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an unlawful distribution to shareholders (meaning a dividend or other distribution that violates PRGX’s articles of incorporation and/or certain capitalization requirements of Georgia law).
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Advancement or reimbursement of expenses prior to a final disposition requires a written affirmation that the foregoing criteria were met and
an undertaking to repay any advances if it is ultimately determined that the criteria were not met.
Legally Required
Indemnification
. Georgia law requires PRGX to indemnify any director who was wholly successful in defense of the proceeding for his or her reasonable expenses incurred. PRGX’s bylaws also require indemnification of officers and directors
under these circumstances.
Indemnification Required by Bylaws
. PRGX’s bylaws require PRGX to indemnify its directors and
officers against liability incurred in the defense of any proceeding, to which he or she was made a party by reason of the fact that he or she is or was a director or officer of PRGX,
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if he or she acted in a manner he or she believed in good faith to be in, or not opposed to, the best interest of PRGX, and with respect to any criminal proceeding, had no reasonable cause to
believe his or her conduct was unlawful. PRGX is also required to provide advances of expenses incurred by a director or officer in defending such proceeding upon receipt of a written affirmation of such officer or director that he or she has met
certain standards of conduct and an undertaking by or on behalf of such officer or director to repay such advances if it is ultimately determined that he or she is not entitled to indemnification by PRGX.
Indemnification required under PRGX’s bylaws does not cover:
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proceedings by (or in the right of) PRGX for which a director or officer was adjudged liable; or
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proceedings in which a director or officer was held liable for improper receipt of a personal benefit.
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However, because the indemnification required by the bylaws is nonexclusive, the foregoing limitation does not prevent PRGX from indemnifying
an officer or director for any liabilities other than those specifically prohibited by Georgia law, as discussed above under “Legally Authorized Indemnification.”
Indemnification Agreements
. PRGX has entered into indemnification agreements with each of its directors and executive officers (each,
an “Indemnitee”). Pursuant to such agreements, subject to the restrictions on indemnification imposed by Georgia law discussed above, under “Legally Authorized Indemnification,” PRGX is required to indemnify each Indemnitee
whenever he or she is or was a party or is threatened to be made a party to any proceeding (including without limitation any such proceeding brought by or in the right of PRGX), because he or she is or was a director or officer of PRGX (or because
he or she is or was serving at the request of PRGX in any of specified capacities for some other entity), or because of anything done or not done by the Indemnitee in such capacity, against expenses and liabilities (including the costs of any
investigation, defense, settlement or appeal) actually and reasonably incurred by the Indemnitee or on his or her behalf in connection with such proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of PRGX, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that an Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best
interests of PRGX, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. The agreements also provide that under certain circumstances all reasonable expenses incurred by or on
behalf of such Indemnitee shall be advanced from time to time by PRGX to the Indemnitee within a specified period after PRGX’s receipt of a written request for an advance of expenses by such Indemnitee, whether prior to or after final
disposition of a proceeding.
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Indemnification for Securities Law Liabilities
. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers or persons controlling PRGX pursuant to the foregoing provisions of the Georgia Business Corporation Code and PRGX’s articles of incorporation, bylaws and indemnification
agreements entered into with each of its directors and certain executive officers, PRGX has been informed that indemnification is considered by the Commission to be against public policy and therefore unenforceable.
D&O Insurance
. PRGX currently maintains an insurance policy which insures the directors and officers of PRGX against certain
liabilities, including certain liabilities under the Securities Act.
Elimination of Monetary Liability of Directors
. Under
PRGX’s articles of incorporation, directors cannot be held personally liable to PRGX or its shareholders for monetary damages, except liability for:
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misappropriation of a business opportunity;
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intentional misconduct or a knowing violation of law;
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receipt of an improper personal benefit; or
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an unlawful distribution to shareholders (meaning a dividend or other distribution that violates PRGX’s articles of incorporation and/or certain capitalization requirements of Georgia law).
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(a)
Rule 415 offerings
. The
undersigned registrant 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 the 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 the registration
statement. Notwithstanding the foregoing, any increase or decrease in 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 Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such information in the registration statement;
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Provided, however
, that 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 reports filed with
or furnished to the Commission by the registrant pursuant to Section 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 any offering.
(b)
Subsequent Documents Incorporated by Reference
. The undersigned registrant
hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 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)
Indemnification of Officers, Directors and Controlling Persons
. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission 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 registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant 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
registrant 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.
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