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Item 6.
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Indemnification
of Directors and Officers.
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The Registrant is incorporated under the
laws of the State of North Carolina. Chapter 55 of the North Carolina General Statutes, otherwise known as the North Carolina Business
Corporation Act (the “NCBCA”), contains provisions prescribing the extent to which directors and officers of a corporation
shall or may be indemnified.
Section 55-8-51 of the NCBCA permits a corporation,
with certain exceptions, to indemnify a current or former director against liability if he acted in good faith and he reasonably
believed (i) in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests,
(ii) in all other cases, that his conduct was at least not opposed to its best interests and (iii) with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was unlawful. Pursuant to section 55-8-55, indemnification
under section 55-8-51 of the NCBCA generally shall be made by the corporation only upon a determination that indemnification of
the director or officer was proper under the circumstances because he met the applicable standard of conduct. Such determination
may be made by (i) the Board of Directors by a majority vote of a quorum consisting of directors who are not parties to such proceeding,
(ii) if such a quorum is not obtainable, by majority vote of a committee duly designated by the Board of Directors consisting solely
of two or more directors not at the time party to such proceeding; (iii) if such quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested directors so directs, by special legal counsel in a written opinion, or (iv) by the shareholders of
the corporation, not including shares owned or voted under the control of directors who are parties to the proceeding at issue.
Except in certain court-ordered circumstances,
a corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation in which he was
adjudged liable to the corporation or in connection with any other proceeding charging improper personal benefit to him, whether
or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly
received by him.
Sections 55-8-52 and 55-8-56 of the NCBCA
require a corporation to indemnify a director or officer in the defense of any proceeding to which he was a party because of his
capacity as a director or officer against reasonable expenses when he is wholly successful, on the merits or otherwise, in his
defense, unless the articles of incorporation provide otherwise. Upon application, the court may order indemnification of the director
or officer if the court determines that he is entitled to mandatory indemnification under Section 55-8-52, in which case the court
shall also order the corporation to pay the reasonable expenses incurred to obtain court-ordered indemnification or if he is adjudged
fairly and reasonably so entitled in view of all relevant circumstances under Section 55-8-54. Section 55-8-56 allows a corporation
to indemnify and advance expenses to an officer, employee or agent who is not a director to the same extent, consistent with public
policy, as a director or as otherwise set forth in the corporation’s articles of incorporation or bylaws or by resolution
of the board of directors or contract.
Section 55-8-57 of the NCBCA permits a corporation
to provide for indemnification of directors, officers, employees or agents, in its articles of incorporation or bylaws or by contract
or resolution, against liability in various proceedings and to purchase and maintain insurance policies on behalf of these individuals.
Article V of the Registrant’s
articles of incorporation, as amended, provides that, to the fullest extent permitted by the NCBCA, individuals serving, or who
have served, as directors shall not be personally liable for monetary damages for breach of any duty as a director. In addition,
the Registrant’s bylaws provide that the Registrant shall indemnify its directors, officers, employees or agents against
all liability and litigation expense, including reasonable attorney’s fees, arising out of such status or activities in such
capacity, except for any liabilities or expenses incurred on account of activities that were, at the time taken, known or believed
by the person to be clearly in conflict with the best interests of the Registrant. The Registrant may only make an indemnification
payment under the bylaws after a determination by a majority vote of the disinterested members of the Registrant’s board
of directors that the activities giving rise to the liability or expense for which indemnification is requested were not, at the
time taken, known or believed by the person requesting indemnification to be clearly in conflict with the best interests of the
Registrant. Pursuant to the bylaws and as authorized by statute, the Registrant also maintains insurance on behalf of its directors
and officers against liability asserted against such persons in such capacity.
Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers or persons controlling the Registrant pursuant to the
provisions discussed above, the Registrant has been informed that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
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(a)
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The undersigned Registrant hereby undertakes as follows:
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(1)
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To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
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(i)
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to include any prospectus required by section 10(a)(3) of the Securities Act;
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(ii)
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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 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 Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and
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(iii)
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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 this Registration Statement;
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provided, however
, that paragraphs (a)(1)(i) and (a)(1)(ii)
of this section do not apply if 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 Section 15(d) of the
Exchange Act that are incorporated by reference in this 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
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 related to the securities offered
therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.
(h) 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.