The Board is recommending that stockholders approve an amendment to our restated certificate of incorporation to extend, to the fullest extent possible, the limitations of personal liability applicable to our directors to certain of our officers, including our executive officers. Section 102(b)(7) of the General Corporation Law of the State of Delaware, or the DGCL, was recently amended to permit a Delaware corporation to include in its certificate of incorporation a provision to eliminate or limit the personal liability of certain officers to a corporation's stockholders for monetary damages resulting from certain breaches of the officer's fiduciary duty of care, providing some parity with existing protections available for directors of Delaware corporations. The Board has adopted a resolution to amend our restated certificate of incorporation to eliminate personal liability of such an officer to our stockholders for monetary damages to the fullest extent permitted by the DGCL (the “Amendment”).

The DGCL already permits Delaware corporations to include a provision in their certificate of incorporation to provide that a corporation’s directors are not personally liable to pay monetary damages to the corporation or its stockholders for a breach of fiduciary duty as a director, except for:

Our restated certificate of incorporation already contains a provision providing for the above protections to the fullest extent permitted by law, for the members of the Board. The Amendment is intended to extend certain of those protections to certain of our officers, including our executive officers, as now permitted by the DGCL, such that these officers will not be personally liable to our stockholders for monetary damages for breach of the fiduciary duty of care. However, unlike the existing protections for directors, the Amendment does not protect executive officers from personal liability to the Company for claims of breach of the fiduciary duty of care brought by or in the right of the Company, including in the case of derivative claims.

To be effective, the Amendment must be approved by our stockholders in the manner described in this Proxy Statement. The affirmative vote of a majority of the outstanding shares of our common stock is required to adopt the Amendment to eliminate or limit the personal liability of certain of our officers to our stockholders for monetary damages resulting from certain breaches of the officer’s fiduciary duty of care.

The Board believes it is appropriate for public corporations incorporated in states that allow for the limitation of liability of directors and officers to have such a provision in their certificates of incorporation. The nature of the role of directors and officers often requires them to make decisions in response to time-sensitive opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit. Limiting concern about personal risk would empower officers to best exercise their business judgment in furtherance of stockholder interests.

The Board also believes that the adoption of the Amendment would reduce the costs and risks related to serving as an officer, increase our ability to continue to attract and retain qualified individuals to serve as officers, and potentially lower the cost of being a public company. We expect our peers and other companies with whom we compete for officer talent to adopt exculpation clauses that limit the personal liability of officers in their certificates of incorporation, and we believe failing to adopt the proposed Amendment could impact our recruitment and retention of exceptional officer candidates.

The Amendment would protect certain of our officers, including our executive officers, against personal liability to our stockholders for monetary damages for certain breaches of the duty of care. However, as indicated above, our officers would remain liable for breaches of their duty of care brought by or in the right of the Company, including in the case of derivative claims. Accordingly, the Amendment would not prevent the Board from pursuing claims against our officers in the name of the Company, nor would it prevent our stockholders from bringing derivative claims in which our officers are alleged to have breached their duty of care. Additionally, consistent with the limits on exculpation of liability for directors, our officers would remain liable for breaches of their duty of loyalty, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, and for transactions from which an executive officer derives an improper personal benefit. The Amendment would not eliminate or limit the liability of our officers arising from causes of action brought under federal laws, including federal securities laws.

While the Amendment would protect certain of our officers, including executive officers, from awards of monetary damages for certain breaches of the duty of care, it would not eliminate any of our officers’ fiduciary duties. In other words, our officers are still required to exercise appropriate diligence, act in good faith, and otherwise comply with the standards of Delaware law in carrying out their duties. Accordingly, the Amendment would have no effect on the availability of equitable remedies such as an injunction or rescission based on an officer’s breach of fiduciary duty.

Also, under Section 102(b)(7) of the DGCL, adoption of the Amendment would not eliminate or limit the liability of an officer for any act or omission occurring prior to the Amendment becoming effective, so officers would remain potentially liable for monetary damages in connection with any acts or omissions occurring prior to the effectiveness of the Amendment.

Finally, the Amendment clarifies that certain of our officers, including our executive officers, would receive the benefit of any future amendments to the DGCL that further limit the personal liability of officers (so that if the DGCL were to be amended to further limit the personal liability of officers, our amended and restated certificate of incorporation would not have to be further amended or modified to conform to any revisions of such section), and that any repeal or modification of the provisions added to our amended and restated certificate of incorporation by the Amendment would be prospective only and would not adversely affect any limitation on the personal liability of an officer existing at the time of any such repeal or modification. This is consistent with the existing provisions of our restated certificate of incorporation as they relate to director exculpation as permitted by the DGCL and is designed to increase the flexibility of the amended and restated certificate of incorporation to allow it to change automatically with changes in the DGCL over time.

When considering the recommendation of the Board that our stockholders approve this proposal, our stockholders should be aware that certain directors and executive officers of the Company, specifically our Chief Executive Officer and the other actively employed named executive officers, have interests in the proposal that may be different from, or in addition to, the interests of our stockholders more generally because they will receive the liability exculpation protections afforded by the proposed Amendment if it is adopted. The Board was aware of these interests and considered them, among other matters in reaching its decision to approve the proposed Amendment. The proposed Amendment is not being proposed in response to any specific resignation, threat of resignation or refusal to serve by any officer.

If the proposed Amendment is approved by our stockholders, it would become effective immediately upon the filing of the Amendment with the Secretary of State of the State of Delaware, which we would expect to file promptly after the Annual Meeting. After effectiveness of the Amendment, the new officer exculpation provision would apply only with respect to acts or omissions by our officers occurring after the date of the Amendment.

In accordance with the DGCL, the Board may elect to abandon the proposed Amendment without further action by our stockholders at any time prior to the effectiveness of the filing of the Amendment with the Secretary of State of the State of Delaware, notwithstanding stockholder approval of the proposed Amendment at the Annual Meeting.


THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE OR LIMIT THE PERSONAL LIABILITY OF OFFICERS