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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 Delaware. Section 145 of the Delaware General Corporation Law (“DGCL”) provides that a Delaware corporation may indemnify any persons who were or are, or are threatened to be made, parties to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of such corporation) by reason of the fact that such person is or was a director, an officer, an employee, or an agent of such corporation, or is or was serving at the request of the corporation as a director, an officer, an employee, or an agent of another corporation or enterprise. The indemnity may include 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, provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. A Delaware corporation may indemnify persons who were or are, or are threatened to be made, a party to any threatened, pending, or completed action or suit by or in the right of the corporation by reason of the fact that such person is or was a director, an officer, an employee, or an agent of such corporation, or is or was serving at the request of such corporation as a director, an officer, an employee, or an agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests, except that no indemnification is permitted without judicial approval if the such person is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses which such officer or director has actually and reasonably incurred. The Registrant’s Amended and Restated Certificate of Incorporation and its Second Amended and Restated Bylaws provide for the indemnification of its directors and officers to the fullest extent permitted under the DGCL.
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 duties as a director, except for liability for any:
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breach of a director’s duty of loyalty to the corporation or its stockholders;
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act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
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unlawful payment of dividends, stock purchase or redemption of shares; or
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transaction from which the director derives an improper personal benefit.
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The Registrant’s Amended and Restated Certificate of Incorporation, includes such a provision. Pursuant to the Registrant’s Second Amended and Restated Bylaws, expenses incurred by any director in defending any such action, suit, or proceeding in advance of its final disposition shall be paid by the Registrant upon delivery to the Registrant of an undertaking, by or on behalf of such director, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Registrant.
Section 174 of the DGCL provides, among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved, or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.
As permitted by the DGCL, the Registrant has entered, and intends to continue to enter, into separate indemnification agreements with each of the Registrant’s directors and executive officers. Under the terms of our indemnification agreements, we will be required to indemnify such persons to the fullest extent permitted by the laws of the State of Delaware against any and all Indemnifiable Claims and Indemnifiable Losses (as defined in the form of Indemnification Agreement). We must indemnify such person (a) against any and all attorneys’ and experts’ fees and expenses and all other costs and expenses paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in (including on appeal), 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 (b) any inquiry or investigation, whether made, instituted or conducted by the Company or any other party, including without limitation any federal, state or other governmental entity, that such person determines might lead to the institution of any such claim, demand, action, suit or proceeding; provided such person satisfies the applicable standard of conduct. The indemnification agreements also require us, if so requested, to advance within five (5) business days of such request any and all costs and expenses that such indemnitee incurred, provided that such person will repay any such advance if it is ultimately determined that such person is not entitled to be indemnified for such costs and expenses. Our second amended and restated bylaws also require that such person return any such advance if it is ultimately determined that such person is not entitled to indemnification by us as authorized by the laws of the State of Delaware. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder.
We are not required to provide indemnification under our indemnification agreements for certain matters, including: (1) indemnification for which the indemnitee has received payment under any insurance policy or other indemnity provision; or (2) indemnification in connection with any proceedings initiated by the indemnitee against us or any of our directors or officers unless we have joined in or consented to the initiation of such proceeding. The indemnification agreements will require us, to the extent that we maintain an insurance policy or policies providing liability insurance for directors, officers, employees, agents or fiduciaries of our company or of any other corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise that such person serves at the request of our company, to cover such person by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available.
We have an insurance policy covering our officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act, or otherwise.