We are asking shareholders to approve an amendment to our Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) to provide for the elimination of monetary liability (i.e., exculpation) of certain officers of the company in certain limited circumstances (the “Proposed Amendment”). The Proposed Amendment also simplifies the existing exculpation provision related to directors of the company set forth in Article EIGHTH of the Certificate of Incorporation by referring to the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (the “DGCL”) instead of specifying each instance where exculpation for directors is currently not available under the DGCL. As such, the current exculpation protections available to the directors remain unchanged as a result of the Proposed Amendment. In addition, the Proposed Amendment provides that if the DGCL is further amended to eliminate or limit the liability of officers or directors, the liability of such officers and directors will be limited or eliminated to the fullest extent permitted by law, as so amended. The following description is a summary only and is qualified in its entirety by reference to the text of the Proposed Amendment as shown below in the section called “ Text of Proposed Amendment.”

Section 102(b)(7) of the DGCL was recently amended to enable Delaware corporations to include provisions in their certificates of incorporation that limit or eliminate the personal monetary liability of certain senior officers for breaches of their fiduciary duty of care in limited circumstances. Currently, Article EIGHTH of our Certificate of Incorporation aligns with the previous Section 102(b)(7) of the DGCL, which provided for the exculpation of directors, but not officers, from personal monetary liability for breaches of their fiduciary duty of care. To keep the exculpation provision of our Certificate of Incorporation aligned with updated Delaware law, we are proposing to amend our Certificate of Incorporation so that directors and certain senior officers will be exculpated from personal liability for monetary damages for breaching their fiduciary duty of care solely to the extent permitted by the updated Section 102(b)(7).

Consistent with the updated Section 102(b)(7), the proposed amendment to our Certificate of Incorporation would only exculpate certain of our senior officers from personal liability for monetary damages for breaches of their duty of care in direct claims brought by shareholders against such officers. The amendment would not exculpate any of our officers from monetary liability for breach of their duty of care in claims brought against such officer directly by the company itself or brought derivatively by our shareholders. Furthermore, as is the case for directors under our current Certificate of Incorporation, officers would not be exculpated from personal liability for breaches of their duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit.

The company officers that would be covered by this provision would be our president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer, and chief accounting officer (to the extent there are officers who occupy such positions), in each case who served at any time during the course of conduct alleged in the action or proceeding to be wrongful, and any other officer identified in our public filings with the SEC as one of our most highly compensated executive officers.

As part of its ongoing evaluation of our corporate governance practices, the Board of Directors has determined that amending the current exculpation provision to align with the updated Section 102(b)(7) strikes the appropriate balance between shareholders’ interest in officer accountability and the need for directors and officers to have appropriate protections from personal liability. Providing appropriate exculpation to our senior officers could (1) allow us to continue to attract and retain the most qualified officers and (2) prevent costly and protracted litigation that distracts our leadership team from important operational and strategic matters.

Exculpation has been available to directors of Delaware corporations for a long time. Since Delaware updated Section 102(b)(7), many Delaware corporations have adopted officer exculpation clauses, including a number of our peers. We expect other companies in our industry to adopt such clauses in the near future. Failing to provide officer exculpation as permitted by current Delaware law could impact our recruitment and retention of exceptional candidates, who may conclude that the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the company.

In addition, frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges. In the current litigious environment, these decisions could expose them to substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, regardless of merit. Adopting an exculpation provision that aligns with the updated Section 102(b)(7) of the DGCL could prevent protracted litigation that detracts from management’s ability to focus on the execution of our goals and objectives, empowering our directors and officers to exercise their business judgment in furtherance of the interests of shareholders. It is important to note that, as set forth in the Proposed Amendment and in accordance with the DGCL, the exculpation that would be afforded to our senior officers is more limited than that afforded to our directors because the exculpated officers will not be exculpated from liability in any action brought by or in the right of the company. As a result, the exculpated officers will still be accountable to the company in the event they breach their duty of care to the company.

For these reasons, and considering the limited circumstances in which our senior officers would be exculpated, the Board of Directors believes that providing officer exculpation solely to the extent permitted by the updated Section 102(b)(7) is in the best interests of the company and its shareholders. Therefore, the Board of Directors has unanimously approved and declared advisable the Proposed Amendment as described herein, and has recommended that the shareholders approve and adopt the Proposed Amendment.

“EIGHTH: A director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of Delaware, as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director or officer of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.”

If the Proposed Amendment is approved by our shareholders, the amendment to our Certificate of Incorporation will become effective upon the filing of a Certificate of Amendment setting forth the Proposed Amendments with the Delaware Secretary of State, which the company anticipates filing promptly following the 2024 Annual Meeting. Our Board of Directors reserves the right to elect to abandon the Proposed Amendment at any time before it becomes effective even if it is approved by shareholders.

Pursuant to Section 102(b)(7), the Proposed Amendment would not eliminate or limit the liability of any officer for any act or omission occurring prior to the date the Proposed Amendment becomes effective. The Proposed Amendment would not change any provision of our current Certificate of Incorporation other than amending Article EIGHTH as described above. If the Proposed Amendment is not approved by our shareholders, our Certificate of Incorporation will remain unchanged.


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