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EXHIBIT 99.3
PENNSYLVANIA BUSINESS CORPORATION LAW
SUBCHAPTER D. INDEMNIFICATION
1741 THIRD-PARTY ACTIONS. -- Unless otherwise restricted in its
bylaws, a business corporation shall have power to indemnify any person who was
or is a party or threatened to be made a party to any threatened, pending or
completed action 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 representative of the corporation, or is
or was 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, against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with the action 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 proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action or proceeding by judgment, order,
settlement or 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 that he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any criminal
proceeding, had reasonable cause to believe that his conduct was unlawful.
1742 DERIVATIVE AND CORPORATE ACTIONS. -- Unless otherwise
restricted in its bylaws, a business 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 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
representative of the corporation or is or was 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, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of the
action 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. Indemnification
shall not be made under this section in respect of any claim, issue or matter
as to which the person has been adjudged to be liable to the corporation unless
and only to the extent that the court of common pleas of the judicial district
embracing the county in which the registered office of the corporation is
located or the court in which the action was brought determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for the expenses that the court of common pleas or other court deems
proper.
1743 MANDATORY INDEMNIFICATION. -- To the extent that a
representative of a business corporation has been successful on the merits or
otherwise in defense of any action or proceeding referred to in Section 1741
(relating to third-party actions) or 1742 (relating to derivative and corporate
actions) or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney fees) actually and reasonably
incurred by him in connection therewith.
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1744 PROCEDURE FOR EFFECTING INDEMNIFICATION. -- Unless ordered by a
court, any indemnification under Section 1741 (relating to third-party actions)
or 1742 (relating to derivative and corporate actions) shall be made by the
business corporation only as authorized in the specific case upon a
determination that indemnification of the representative is proper in the
circumstances because he has met the applicable standard of conduct set for in
those sections. The 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 the action or proceeding;
(2) if such 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
(3) by the shareholders.
1745 ADVANCING EXPENSES. -- Expenses (including attorneys' fees)
incurred in defending any action or proceeding referred to in this subchapter
may be paid by a business corporation in advance of the final disposition of
the action or proceeding upon receipt of an undertaking by or on behalf of the
representative to repay the amount if it is ultimately determined that he is
not entitled to be indemnified by the corporation as authorized in this
subchapter or otherwise.
1746 SUPPLEMENTARY COVERAGE. -- (a) General rule. -- The
indemnification and advancement of expenses provided by, or granted pursuant
to, the other sections of this subchapter shall not be deemed exclusive of any
other rights to which a person 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 his official
capacity and as to action in another capacity while holding that office.
Section 1728 (relating to interested directors or officers; quorum) and, in the
case of a registered corporation, section 2538 (relating to approval of
transactions with interested shareholders) shall be applicable to any bylaw,
contract or transaction authorized by the directors under this section. A
corporation may create a fund of any nature, which may, but need not be, under
the control of a trustee, or otherwise secure or insure in any manner its
indemnification obligations, whether arising under or pursuant to this section
or otherwise.
(b) When indemnification is not to be made. -- Indemnification
pursuant to subsection (a) shall not 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. The articles may
not provide for indemnification in the case of willful misconduct or
recklessness.
(c) Grounds. -- Indemnification pursuant to subsection (a) under
any bylaw, agreement, vote of shareholders or directors or otherwise may be
granted for any action taken and may be made whether or not the corporation
would have the power to indemnify the person under any other provision of law
except as provided in this section and whether or not the indemnified liability
arises or arose from any threatened, pending or completed action by or in the
right of the corporation. Such indemnification is declared to be consistent
with the public policy of this Commonwealth.
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1747 POWER TO PURCHASE INSURANCE. -- Unless otherwise restricted in
its bylaws, a business corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a representative of the
corporation or is or was 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 against
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have
the power to indemnify him against that liability under the provisions of this
subchapter. Such insurance is declared to be consistent with the public policy
of this Commonwealth.
1748 APPLICATION TO SURVIVING OR NEW CORPORATIONS. -- For the
purposes of this subchapter, references to "the corporation" include all
constituent corporations absorbed in a consolidation, merger or division, as
well as the surviving or new corporations surviving or resulting therefrom, so
that any person who is or was a representative of the constituent, surviving or
new corporation, or is or was serving at the request of the constituent,
surviving or new corporation as a representative of another domestic or foreign
corporation for profit or not-for-profit, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the provisions of this
subchapter with respect to the surviving or new corporation as he would if he
had served the surviving or new corporation in the same capacity.
1749 APPLICATION TO EMPLOYEE BENEFIT PLANS. -- For purposes of this
subchapter:
(1) References to "other enterprises" shall include employee
benefit plans and references to "serving at the request of the corporation"
shall include any service as a representative of the business corporation that
imposes duties on, or involves services by, the representative with respect to
an employee benefit plan, its participants or beneficiaries.
(2) Excise taxes assessed on a person with respect to an employee
benefit plan pursuant to applicable law shall be deemed "fines."
(3) Action with respect to an employee benefit plan taken or
omitted in good faith by a representative of the corporation in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of the plan shall be deemed to be action in a manner that is not opposed to the
best interests of the corporation.
1750 DURATION AND EXTENT OF COVERAGE. -- The indemnification and
advancement of expenses provided by, or granted pursuant to, this subchapter
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a representative of the corporation and shall inure
to the benefit of the heirs and personal representative of that person.
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