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:
· His conduct was in good
faith.
· He reasonably believed that
his conduct was in, or not opposed to, the corporation’s best interests.
· In the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
However, a corporation may not indemnify
a director in connection with either:
· A proceeding by or in the
right of the corporation in which the director was determined to be liable to the corporation.
· 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.
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:
· 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.
· 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.
· A determination is made
that the facts then known to those making the determination would not preclude indemnification.
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:
· An officer of a corporation
is entitled to mandatory indemnification to the same extent as a director of the corporation.
· 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.
· 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.
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.