Exhibit 99(b)
VIRGINIA STOCK CORPORATIONS ACT
Article 10.
INDEMNIFICATION.
SECTION 13.1-696. DEFINITIONS. - In this article:
"Corporation" includes any domestic or foreign predecessor
entity of a corporation in a merger or other transaction in which
the predecessor's existence ceased upon consummation of the
transaction.
"Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a
corporation, is or was serving at the corporation's request as a
director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise. A
director is considered to be serving an employee benefit plan at
the corporation's request if his duties to the corporation also
impose duties on, or otherwise involve services by, him to the
plan or to participants in or beneficiaries of the plan.
"Director" includes, unless the context requires otherwise, the
estate or personal representative of a director.
"Expenses" includes counsel fees.
"Liability" means the obligation to pay a judgment, settlement,
penalty, fine, including any excise tax assessed with respect to
an employee benefit plan, or reasonable expenses incurred with
respect to a proceeding.
"Official capacity" means, (i) when used with respect to a
director, the office of director in a corporation; or (ii) when
used with respect to an individual other than a director, as
contemplated in Section 13.1-702, the office in a corporation
held by the officer or the employment or agency relationship
undertaken by the employee or agent on behalf of the corporation.
"Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint
venture, trust, employee benefit plan, or other enterprise.
"Party" includes an individual who was, is, or is threatened to
be made a named defendant or respondent in a proceeding.
"Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal.
(Code 1950, Section 13.1-3.1; 1968, c.570; 1975, c.500; 1979,
c.99; 1985, c.522.)
SECTION 13.1-697. AURHORITY TO INDEMNIFY.-A. Except as provided
in subsection D of this section, a corporation may indemnify an
individual made a party to a proceeding because he is or was a
director against liability incurred in the proceeding if:
1. He conducted himself in good faith; and
2. He believed:
a. In the case of conduct in his official capacity with
the corporation, that his conduct was in its best interests; and
b. In all other cases, that his conduct was at least not
opposed to its best interests; and
3. In the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
B. A director's conduct with respect to an employee benefit
plan for a purpose he believed to be in the interests of the
participants in and beneficiaries of the plan is conduct that
satisfies the requirement of subdivision 2b of subsection A of
this section.
C. The termination of a proceeding by judgment, order,
settlement or conviction is not, of itself, determinative that
the director did not meet the standard of conduct described in
this section.
D. A corporation may not indemnify a director under this
section:
1. In connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the
corporation; or
2. In connection with any other proceeding charging
improper personal benefit to him, whether or not involving action
in his official capacity, in which he was adjudged liable on the
basis that personal benefit was improperly received by him.
E. Indemnification permitted under this section in connection
with a proceeding by or in the right of the corporation is
limited to reasonable expenses incurred in connection with the
proceeding. (Code 1950, Section 13.1-3.1; 1968, c.570; 1975,
c.500; 1979, c.99; 1985, c.522.)
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SECTION 13.1-698. MANDATORY INDEMNIFICATION.-Unless limited by
its articles of incorporation, a corporation shall indemnify a
director who entirely prevails in the defense of any proceeding
to which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in
connection with the proceeding. (Code 1950, Section 13.1-3.1;
1968, c.570; 1975, c.500; 1979, c.99; 1985, c.522.)
SECTION 13.1-699. ADVANCE FOR EXPENSES.-A. A corporation may
pay for or reimburse the reasonable expenses incurred by a
director who is a party to a proceeding in advance of final
disposition of the proceeding if:
1. The director furnishes the corporation a written
statement of his good faith belief that he has met the standard
of conduct described in Section 13.1-697;
2. The director furnishes the corporation a written
undertaking, executed personally or on his behalf, to repay the
advance if it is ultimately determined that he did not meet the
standard of conduct; and
3. A determination is made that the facts then known to
those making the determination would not preclude indemnification
under this article.
B. The undertaking required by subdivision 2 of subsection A of
this section shall be an unlimited general obligation of the
director but need not be secured and may be accepted without
reference to financial ability to make repayment.
C. Determinations and authorizations of payments under this
section shall be made in the manner specified in Section 13.1-
701. (Code 1950, Section 13.1-3.1; 1968, c.570; 1975, c.500;
1979, c.99; 1985, c.522.)
SECTION 13.1-700: Repealed by Acts 1987, cc.59, 257.
SECTION 13.1-700.1. COURT ORDERS FOR ADVANCES, REIMBURSEMENT OR
INDEMNIFICATION.- A. An individual who is made a party to a
proceeding because he is or was a director of a corporation may
apply to a court for an order directing the corporation to make
advances or reimbursement for expenses or to provide
indemnification. Such application may be made to the court
conducting the proceeding or to another court of competent
jurisdiction.
B. The court shall order the corporation to make advances
and/or reimbursement for expenses or to provide indemnification
if it determines that the director is entitled to such advances,
reimbursement or indemnification and shall also order the
corporation to pay the director's reasonable expenses incurred to
obtain the order.
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C. With respect to a proceeding by or in the right of the
corporation, the court may (i) order indemnification of the
director to the extent of his reasonable expenses if it
determines that, considering all the relevant circumstances, the
director is entitled to indemnification even though he was
adjudged liable to the corporation and (ii) also order the
corporation to pay the director's reasonable expenses incurred to
obtain the order of indemnification.
D. Neither (i) the failure of the corporation, including its
board of directors, its independent legal counsel and its
shareholders, to have made an independent determination prior to
the commencement of any action permitted by this section that the
applying director is entitled to receive advances and/or
reimbursement nor (ii) the determination by the corporation,
including its board of directors, its independent legal counsel
and its shareholders, that the applying director is not entitled
to receive advances and/or reimbursement or indemnification shall
create a presumption to that effect or otherwise of itself be a
defense to that director's application for advances for expenses,
reimbursement or indemnification. (1987, cc.59, 257.)
SECTION 13.1-701. DETERMINATION AND AUTHORIZATION OF
INDEMNIFICATION.-A. A corporation may not indemnify a director
under Section 13.1-697 unless authorized in the specific case
after a determination has been made that indemnification of the
director is permissible in the circumstances because he has met
the standard of conduct set forth in Section 13.1-697.
B. The determination shall be made:
1. By the board of directors by a majority vote of a
quorum consisting of directors not at the time parties to the
proceeding;
2. If a quorum cannot be obtained under subdivision 1 of
this subsection, by majority vote of a committee duly designated
by the board of directors (in which designation directors who are
parties may participate), consisting solely of two or more
directors not at the time parties to the proceeding;
3. By special legal counsel:
a. Selected by the board of directors or its committee in
the manner prescribed in subdivisions 1 and 2 of this subsection;
or
b. If a quorum of the board of directors cannot be
obtained under subdivision 1 of this subsection and a committee
cannot be designated under subdivision 2 of this subsection,
selected by majority vote of the full board of directors, in
which selection directors who are parties may participate; or
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4. By the shareholders, but shares owned by or voted under
the control of directors who are at the time parties to the
proceeding may not be voted on the determination.
C. Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible except that
if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under
subdivision 3 of subsection B of this section to select counsel.
(Code 1950, Section 13.1-3.1; 1968, c.570; 1975, c.500; 1979,
c.99; 1985, c.522.)
SECTION 13.1-702. INDEMNIFICATION OF OFFICERS, EMPLOYEES AND
AGENTS. - Unless limited by a corporation's articles of
incorporation,
1. An officer of the corporation is entitled to mandatory
indemnification under Section 13.1-698, and is entitled to apply
for court-ordered indemnification under Section 13.1-700.1, in
each case to the same extent as a director; and
2. The corporation may indemnify and advance expenses
under this article to an officer, employee, or agent of the
corporation to the same extent as to a director. (Code 1950,
Section 13.1-3.1; 1968, c.570; 1975, c.500; 1979, c.99; 1985,
c.522.)
SECTION 13.1-703. INSURANCE.-A corporation may purchase and
maintain insurance on behalf of an individual who is or was a
director, officer, employee, or agent of the corporation, or who,
while a director, officer, employee, or agent of the corporation,
is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise,
against liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer,
employee, or agent whether or not the corporation would have
power to indemnify him against the same liability under Section
13.1-697 or Section 13.1-698. (Code 1950, Section 13.1-3.1; 1968,
c.570; 1975, c.500; 1979, c.99; 1985, c.522.)
SECTION 13.1-704. APPLICATION OF ARTICLE.-A. Unless the articles
of incorporation or bylaws expressly provide otherwise, any
authorization of indemnification in the articles of incorporation
or bylaws shall not be deemed to prevent the corporation from
providing the indemnity permitted or mandated by this article.
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B. Any corporation shall have power to make any further
indemnity, including indemnity with respect to a proceeding by or
in the right of the corporation, and to make additional provision
for advances and reimbursement of expenses, to any director,
officer, employee or agent that may be authorized by the articles
of incorporation or any bylaw made by the shareholders or any
resolution adopted, before or after the event, by the
shareholders, except an indemnity against (i) his willful
misconduct, or (ii) a knowing violation of the criminal law.
Unless the articles of incorporation, or any such bylaw or
resolution expressly provide otherwise, any determination as to
the right to any further indemnity shall be made in accordance
with Section 13.1-701 B. Each such indemnity may continue as to
a person who has ceased to have the capacity referred to above
and may inure to the benefit of the heirs, executors and
administrators of such a person.
C. No right provided to any person pursuant to this section may
be reduced or eliminated by any amendment of the articles of
incorporation or bylaws with respect to any act or omission
occurring before such amendment. (Code 1950, Section 13.1-3.1;
1968, c.570; 1975, c.500; 1979, c.99; 1985, c.522; 1987, cc.59,
257; 1988, c.561.)