Item 6. Indemnification
of Directors and Officers.
Utah Statutes
Except
as otherwise provided in the Utah Revised Business Corporation Act (URBCA), a corporation may indemnify an individual made a party
to a proceeding because the individual is or was a director of the corporation against liability incurred in the proceeding if:
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His conduct was in good faith.
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He reasonably believed that his conduct was in, or not
opposed to, the corporation’s best interests.
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In the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
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However,
a corporation may not indemnify a director in connection with either:
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A proceeding by or in the right of the corporation in
which the director was determined to be liable to the corporation.
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Any other proceeding charging that the director derived
an improper personal benefit (whether or not the proceeding involved action in the director’s official capacity), in
which proceeding the director was determined to be liable on the basis that the director derived an improper personal benefit.
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A corporation
may pay for or reimburse reasonable expenses incurred by a director who is a party to a proceeding in advance of a final disposition
if:
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The director furnishes the corporation a written affirmation
of his good faith belief that he has met the applicable standard of conduct described in Section 16-10a-902 of the Utah Code.
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The director furnishes to the corporation a written
undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet
the standard of conduct.
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A determination is made that the facts then known to
those making the determination would not preclude indemnification.
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A corporation
must indemnify a director who was successful in the defense of any proceeding or claim to which the director was a party because
of the director’s status as a director of the corporation against reasonable expenses incurred in defending the proceeding
or claim for which the director was successful.
Unless
a corporation’s articles of incorporation provide otherwise:
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An officer of a corporation is entitled to mandatory
indemnification to the same extent as a director of the corporation.
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A corporation may indemnify and advance expenses to
an officer, employee, fiduciary, or agent of the corporation to the same extent as to a director.
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A corporation may indemnify and advance expenses to
an officer, employee, fiduciary, or agent who is not a director to a greater extent than to a director. However, this must
be consistent with public policy and provided for in the corporation’s articles of incorporation, bylaws, action of
its board of directors, or contract.
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Company
Articles and By Laws.
Article
III, Section 6 of the Company’s By Laws provides that The Corporation shall have power to indemnify any person who was or
is a party 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 by or in the right of the Corporation) by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his 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 the person did not act in
good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
The Corporation
shall have the power to indemnify any person who was or is a party 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 by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorney fees) actually and reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests
of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action
or suit was brought shall determine upon application 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 which the court shall deem proper.
Any indemnification
under the provisions of subsection (a) or (b) of this section (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of conduct set forth above. Such determination shall be made:
(1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit
or proceedings; (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs,
by independent legal counsel in a written opinion; or (3) by the shareholders.
Expenses
incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Corporation
in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized by the provisions of this section. Such expenses incurred by other employees and agents may be so paid
upon such terms and conditions, if any, as the Board of Directors deems appropriate.
For purposes
of this indemnity, references to "the corporation" shall include, in addition to the resulting corporation, any constituent
corporation, including any constituent of a constituent, absorbed in a consolidation or merger which, if its separate existence
had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person
who is or was a director, officer, employee or agent of such constituent corporation, or is or was sewing at the request of such
constituent corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the provisions of this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its separate existence had continued.
Item 9. Undertakings.
(a) Subsequent
Disclosure
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 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 the 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.
Provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if the information required to be included in a post-effective
amendment by these 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 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) Incorporation
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) Commission
Position on Indemnification
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
Securities and Exchange 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.