| Item 6. |
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Indemnification of Directors and Officers. |
Section 1713 of Subchapter B of Chapter 17 of the Pennsylvania
Business Corporation Law (“PBCL”) permits a Pennsylvania corporation to limit the personal liability of its directors for
monetary damages, subject to certain limitations and conditions. Sections 1741 through 1750 of Subchapter D, Chapter 17, of the PBCL contain
provisions for mandatory and discretionary indemnification of a corporation’s directors, officers and other personnel, and related
matters.
Article Eight of the Registrant’s bylaws limits
the personal liability of directors for monetary damages and provides for indemnification of officers and directors, as described below.
These provisions may not be amended to increase the directors’ exposure to liability or to decrease the indemnification to directors,
officers or others except by the affirmative vote of two-thirds of the entire board of directors or 80% of the votes which all shareholders
are entitled to cast.
Under Section 1713 of the PBCL, if a bylaw adopted
by the shareholders so provides, a director shall not be personally liable, as such, for monetary damages for any action taken unless
(i) the director has breached or failed to perform the duties of his or her office as provided in the applicable subchapter of the PBCL
and (ii) such breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. The bylaw cannot eliminate the
personal liability of directors for any responsibility or liability of a director under a criminal statute or liability for the payment
of taxes pursuant to Federal, State or local law.
Section 8.01 of the Registrant’s bylaws provides
that, to the fullest extent permitted under Subchapter B of Chapter 17 of the PBCL, directors shall not be personally liable to the corporation
or its shareholders or others for monetary damages for any action taken or any failure to take any action. Consistent with the limitations
provided in Section 1713 of the PBCL, this bylaw provision does not apply if the director has breached or failed to perform the duties
of his or her office and such breach or failure constitutes self-dealing, willful misconduct or recklessness, and also does not apply
to the responsibility or liability of a director under any criminal statute or with respect to the payment of taxes pursuant to local,
state or federal law.
Under Section 1741 of the PBCL, subject to certain
limitations, a corporation has the power to indemnify directors and officers under certain prescribed circumstances against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with an action
or proceeding, whether civil, criminal, administrative or investigative (other than derivative or corporate actions), to which any such
officer or director is a party or is threatened to be made a party by reason of such officer or director being a representative of the
corporation or serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or
not-for-profit, partnership, joint venture, trust or other enterprise, so long as the director or officer acted in good faith and in a
manner reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding,
such officer or director had no reasonable cause to believe his or her conduct was unlawful.
Section 1742 of the PBCL permits indemnification in
derivative and corporate actions if the director or officer acted in good faith and in a manner reasonably believed to be in, or not opposed
to, the best interests of the corporation, except in respect of any claim, issue or matter as to which the officer or director has been
adjudged to be liable to the corporation unless and only to the extent that the proper court determines upon application that, despite
the adjudication of liability but in view of all the circumstances of the case, the officer or director is fairly and reasonably entitled
to indemnity for the expenses that the court deems proper.
Under Section 1743 of the PBCL, indemnification is
mandatory to the extent that the officer or director has been successful on the merits or otherwise in defense of any action or proceeding
referred to in Section 1741 or 1742 of the PBCL.
Section 1744 of the PBCL provides that, unless ordered
by a court, any indemnification under Section 1741 or 1742 of the PBCL shall be made by the corporation only as authorized in the specific
case upon a determination that the officer or director met the applicable standard of conduct, and such determination must be made (i)
by the board of directors by a majority vote of a quorum of directors not parties to the action or proceeding, (ii) if a quorum is not
obtainable, or if obtainable and a majority vote of a quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (iii) by the shareholders.
Section 1745 of the PBCL provides that expenses (including
attorneys’ fees) incurred by a director or officer in defending any action or proceeding referred to in Subchapter D of Chapter
17 of the PBCL may be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking
by or on behalf of such person to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified
by the corporation. Except as otherwise provided in the corporation’s bylaws, advancement of expenses must be authorized by the
board of directors.
Section 1746 of the PBCL provides generally that the
indemnification and advancement of expenses provided by Subchapter D of Chapter 17 of the PBCL shall not be deemed exclusive of any other
rights to which an officer or director seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement,
vote of shareholders or disinterested directors or otherwise, both as to action in the officer or director’s official capacity and
as to action in another capacity while holding that office. In no event may indemnification be made in any case where the act or failure
to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness.
Section 1747 of the PBCL grants a corporation the power
to purchase and maintain insurance on behalf of any director or officer against any liability asserted against the officer or director
or incurred by the officer or director in his or her capacity as officer or director, whether or not the corporation would have the power
to indemnify the officer or director against that liability under Subchapter D of Chapter 17 of the PBCL.
Sections 1748 and 1749 of the PBCL extend the indemnification
and advancement of expenses provisions contained in Subchapter D of Chapter 17 of the PBCL to successor corporations in fundamental changes
and to officers and directors serving as fiduciaries of employee benefit plans.
Section 1750 of the PBCL provides that the indemnification
and advancement of expenses provided by, or granted pursuant to, Subchapter D of Chapter 17 of the PBCL shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the
heirs and personal representatives of such person.
Section 8.02 of the Registrant’s bylaws requires
the Registrant to indemnify each of the Registrant’s directors and officers in such capacity in which any such director or officer
acts for or on behalf of the Registrant, including as an employee or agent. Section 8.02(a) requires the Registrant 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 by reason of the fact such person was a director or officer of the Registrant or its
subsidiaries, or any other direct or indirect subsidiary of the corporation, or is or was serving at the request of the Registrant as
a director or officer of another corporation or entity, against expenses (including attorney’s fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, to the fullest
extent authorized or permitted by the laws of the Commonwealth of Pennsylvania. Section 8.02(b) requires the Registrant to pay the expenses
(including attorney’s fees) incurred in defending a civil or criminal action, suit or proceeding in advance of the final disposition
of any action, suit or proceeding upon the receipt of (i) an undertaking by or on behalf of the director or officer to repay such amount
if it is ultimately determined that he or she is not entitled to be indemnified as authorized under the bylaws and (ii) if requested at
the discretion of the board of directors, adequate security or a bond to cover such amounts for which it is ultimately determined that
he or she is not entitled to such indemnity. Section 8.02(c) provides that the right to indemnification and advancement of expenses is
not exclusive of any other right to which such persons seeking indemnification and advancement of expenses may be entitled under any agreement,
vote of shareholders or disinterested directors, or otherwise. Section 8.02(d) provides that the Registrant may purchase and maintain
insurance on behalf of any person, may enter into contracts of indemnification with any person and may create a fund of any nature for
the benefit of any person and may otherwise secure in any manner our obligations with respect to indemnification and advancement of expenses
regardless of the source of the indemnification right and without respect to whether or not the Registrant would have the power to indemnify
such person under the bylaws.
The foregoing is only a summary of certain aspects
of Pennsylvania law and the Registrant's bylaws relating to limitation of liability and indemnification of directors and officers, and
does not purport to be complete. It is qualified in its entirety by reference to the detailed provisions of Sections 1713 and Sections
1741 through 1750 of the PBCL and the Registrant's bylaws.
As permitted by the PBCL, the Registrant maintains
directors’ and officers’ liability insurance in amounts and on terms which the Registrant’s board of directors deems
reasonable. In the ordinary course of business, the Registrant’s board of directors regularly reviews the scope and adequacy of
such insurance coverage.
Any underwriting agreement or distribution agreement
that the Registrant enters into with any underwriters or agents involved in the offering or sale of any securities registered hereby may
require such underwriters or dealers to indemnify the Registrant, some or all of its directors and officers and its controlling persons,
if any, for specified liabilities, which may include liabilities under the Securities Act, as amended.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
(a) The undersigned
Registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a post-effective amendment to the 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 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 SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective Registration Statement; and
(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) 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 SEC 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) 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 herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) 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 SEC 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.
