Texas
Law
Article
2.02-1 of the Texas Business Corporation Act allows a Texas corporation to
indemnify a person who was, is, or is threatened to be made a defendant or
respondent in a proceeding because the person is or was a director if it is
determined that the person (1) conducted himself in good faith, (2) reasonably
believed that his conduct in his official capacity as director was in the best
interest of the corporation and in all other cases was at least not opposed to
the corporation’s best interest, and (3) in the case of any criminal proceeding,
had no reasonable cause to believe his conduct was
unlawful. Indemnification under Article 2.02-1 may be made for
judgments, penalties, fines, settlements, and reasonable expenses actually
incurred by the person in connection with the proceeding, subject to limitations
provided therein. Article 2.02-1 (H) requires indemnification of a
defendant / respondent director against reasonable expenses incurred by him in
connection with a proceeding in which he has been wholly successful, on the
merits or otherwise, in the defense of the proceeding.
To the
same extent as a director, Article 2.02-1 (O) of the Texas Business Corporation
Act provides that an officer of the corporation shall be indemnified against
reasonable expenses incurred by him in connection with a proceeding in which he
is a named defendant or respondent because he is or was an officer if he was
wholly successful, on the merits or otherwise, in the defense of the
proceeding.
Pursuant
to Article 2.02-1 (J) of the Texas Business Corporation Act, upon application, a
court may order the equitable indemnification of a director or officer if it
determines the person is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, regardless of other requirements of
indemnification. However, if the person is adjudicated liable to the
corporation or it is found that personal benefit was improperly received by the
person, the indemnification shall be limited to reasonable expenses actually
incurred in connection with the proceeding.
By-laws and Indemnification
Provisions
The
Registrant’s By-laws provide for the Registrant to indemnify each director and
officer of the Registrant against liabilities imposed upon him (including
reasonable amounts paid in settlement) and expenses incurred by him in
connection with any claim made against him or any action, suit or proceeding to
which he may be a party by reason of his being or having been a director or
officer of the Registrant. The Registrant has also entered into
Indemnification Agreements with each officer and director pursuant to which the
Registrant will, in general, indemnify such persons to the maximum extent
permitted by the Registrant’s By-laws and the laws of the State of Texas against
any expenses (including attorney’s fees), judgments, fines and amounts paid in
settlement incurred in connection with any actual or threatened action or
proceeding to which such director or officer is made or threatened to be made a
party by reason of the fact that such person is or was a director or officer of
the Registrant. The foregoing provisions may reduce the likelihood of
derivative litigation against directors and may discourage or deter shareholders
or management from suing directors for breaches of their duty of care, even
though such an action, if successful, might otherwise benefit the Registrant and
its shareholders.
Insurance
The
Registrant is insured under a Directors, Officers and Company Liability Policy
that obligates the Insurer to pay for claims against the directors and officers
for wrongful acts during the effective period of the Policy. The current policy
expires May 30, 2008.
Item
9. Undertakings.
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
of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the 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. 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 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee”
table in the effective 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 (1)(i), and (1)(ii) do not apply if the Registration Statement is on
Form S-8 and 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 Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
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.
(4) That,
for purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant’s annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
(5) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(A) Each
prospectus filed by a Registrant pursuant to Rule 424(b)(3) shall be deemed
to be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement;
and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to
Rule 415(a)(1)(i), (vii) or (x) for the purpose of
providing the information required by Section 10(a) of the Securities Act of
1933 shall be deemed to be part of and included in the registration statement as
of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the
offering described in the prospectus. As provided in Rule 430B, for
liability purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date of
the
registration statement relating to the securities in the registration statement
to which the prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial
bona fide
offering thereof.
Provided, however
, that
no statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale
prior to such effective date, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective
date.
(6) That,
for the purpose of determining liability of a Registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities, each
undersigned Registrant undertakes that in a primary offering of securities of an
undersigned Registrant pursuant to this registration statement, regardless of
the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned Registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any
preliminary prospectus or prospectus of an undersigned Registrant relating to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of an
undersigned Registrant or used or referred to by an undersigned
Registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about an undersigned Registrant or its securities provided
by or on behalf of an undersigned Registrant; and
(iv) Any
other communication that is an offer in the offering made by an undersigned
Registrant to the purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 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 Act and will be governed by the final adjudication of
such issue.