Exemption from Section 16(b) Liability Clause Samples
The Exemption from Section 16(b) Liability clause serves to protect certain individuals or transactions from the short-swing profit liability provisions under Section 16(b) of the Securities Exchange Act of 1934. Typically, this clause applies to officers, directors, or significant shareholders who might otherwise be subject to disgorgement of profits realized from buying and selling company stock within a six-month period. By specifying exemptions, the clause clarifies which transactions or parties are not subject to these strict liability rules, thereby reducing the risk of inadvertent violations and ensuring smoother operation of equity transactions within the company.
Exemption from Section 16(b) Liability. Limestone and Peoples agree that, in order to most effectively compensate and retain those officers and directors of Limestone subject to the reporting requirements of Section 16(a) of the Exchange Act (the “Limestone Insiders”), both before and after the Effective Time, it is desirable that Limestone Insiders not be subject to a risk of liability under Section 16(b) of the Exchange Act to the fullest extent permitted by applicable law in connection with the conversion of shares of Limestone Common Stock in the Merger, and for that compensatory and retentive purpose agree to the provisions of this Section 6.20. Limestone shall deliver to Peoples in a reasonably timely fashion before the Effective Time accurate information regarding the Limestone Insiders, and the Boards of Directors of Peoples and of Limestone, or a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall before the Effective Time take all steps as may be necessary or appropriate to cause (a) in the case of Limestone, any dispositions of Limestone Common Stock by Limestone Insiders and (b) in the case of Peoples, any acquisitions of Peoples Common Shares by any Limestone Insiders who, immediately following the Merger, will be officers or directors of Peoples subject to the reporting requirements of Section 16(a) of the Exchange Act, in each case pursuant to the transactions contemplated by this Agreement, to be exempt from liability pursuant to Rule 16b-3 under the Exchange Act to the fullest extent permitted by applicable law.
Exemption from Section 16(b) Liability. SmartFinancial acknowledges that, in order to most effectively compensate and retain those officers and directors of the Bancshares Parties, if any, that will become officers or directors of SmartFinancial subject to the reporting requirements of Section 16(a) of the Exchange Act in connection with or as a result of the transactions contemplated by this Agreement (the “Bancshares Insiders”), it is desirable that the Bancshares Insiders not be subject to a risk of Liability under Section 16(b) of the Exchange Act to the fullest extent permitted by applicable Law in connection with the conversion or exchange of shares of Bancshares Common Stock in the Parent Merger, and for that compensatory and retentive purpose agrees to the provisions of this Section 7.15. The board of directors of SmartFinancial, or a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall prior to the Effective Time take all such action as may be reasonably required to cause any acquisitions of SmartFinancial Common Stock by Bancshares Insiders as Merger Consideration in accordance with Article III of this Agreement to be exempt from Liability pursuant to Rule 16b-3 under the Exchange Act to the fullest extent permitted by applicable Law.
Exemption from Section 16(b) Liability. BancShares and the Company agree that, in order to most effectively compensate and retain those officers and directors of the Company subject to the reporting requirements of Section 16(a) of the Exchange Act, both prior to and after the Effective Time, it is desirable that such individuals not be subject to a risk of liability under Section 16(b) of the Exchange Act to the fullest extent permitted by applicable Law in connection with the conversion or exchange of shares of Company Common Stock and Company Equity Awards in connection with the transactions contemplated by this Agreement, and for that compensatory and retentive purpose agree to the provisions of this Section 7.12. The board of directors of the Company, or a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall prior to the Effective Time take all such action as may be reasonably required to cause to be exempt from liability pursuant to Rule 16b-3 under the Exchange Act, to the fullest extent permitted by applicable Law, any dispositions of shares of Company Common Stock or Company Equity Awards that are treated as dispositions under such rule and result from the transactions contemplated by this Agreement by each officer or director of the Company who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company immediately prior to the Effective Time.
Exemption from Section 16(b) Liability. Premier Financial and Peoples agree that, in order to most effectively compensate and retain those officers and directors of Premier Financial subject to the reporting requirements of Section 16(a) of the Exchange Act (the “Premier Financial Insiders”), both before and after the Effective Time, it is desirable that Premier Financial Insiders not be subject to a risk of liability under Section 16(b) of the Exchange Act to the fullest extent permitted by applicable law in connection with the conversion of shares of Premier Financial Common Stock in the Merger, and for that compensatory and retentive purpose agree to the provisions of this Section 6.20. Premier Financial shall deliver to Peoples in a reasonably timely fashion before the Effective Time accurate information regarding the Premier Financial Insiders, and the Peoples Board and Premier Financial Board, or a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall before the Effective Time take all steps as may be necessary or appropriate to cause (a) in the case of Premier Financial, any dispositions of Premier Financial Common Stock by Premier Financial Insiders and (b) in the case of Peoples, any acquisitions of Peoples Common Shares by any Premier Financial Insiders who, immediately following the Merger, will be officers or directors of Peoples subject to the reporting Table of Contents requirements of Section 16(a) of the Exchange Act, in each case pursuant to the transactions contemplated by this Agreement, to be exempt from liability pursuant to Rule 16b-3 under the Exchange Act to the fullest extent permitted by applicable law.
Exemption from Section 16(b) Liability. Park and Vision Bancshares shall take all such steps as may be required or reasonably requested to cause the transactions contemplated by this Agreement and any other dispositions of shares of Vision Bancshares Common Stock or other equity securities of Vision Bancshares in connection with this Agreement by each individual who is a director or officer of Vision Bancshares to be exempt under Exchange Act Rule 16b-3, such steps to be taken in accordance with the No-Action Letter dated January 12, 1999, issued by the SEC to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, or as may otherwise be reasonably requested by Vision Bancshares.
Exemption from Section 16(b) Liability. Commerce Union acknowledges that, in order to most effectively compensate and retain those officers and directors of the Community First Parties that will become officers or directors of Commerce Union subject to the reporting requirements of Section 16(a) of the Exchange Act in connection with or as a result of the transactions contemplated by this Agreement (the “CFI Insiders”), it is desirable that the CFI Insiders not be subject to a risk of liability under Section 16(b) of the Exchange Act to the fullest extent permitted by applicable Law in connection with the conversion or exchange of shares of CFI Common Stock in the Merger, and for that compensatory and retentive purpose agrees to the provisions of this Section 7.17. The board of directors of Commerce Union, or a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall prior to the Effective Time take all such action as may be reasonably required to cause any acquisitions of Commerce Union Common Stock by any CFI Insiders to be exempt from liability pursuant to Rule 16b-3 under the Exchange Act to the fullest extent permitted by applicable Law.
Exemption from Section 16(b) Liability. Reliant acknowledges that, in order to most effectively compensate and retain those officers of the TCB Holdings Parties, if any, that will become officers of Reliant subject to the reporting requirements of Section 16(a) of the Exchange Act in connection with or as a result of the transactions contemplated by this Agreement (the “TCB Holdings Insiders”), it is desirable that the TCB Holdings Insiders not be subject to a risk of liability under Section 16(b) of the Exchange Act to the fullest extent permitted by applicable Law in connection with the conversion or exchange of shares of TCB Holdings Common Stock in the Parent Merger, and for that compensatory and retentive purpose agrees to the provisions of this Section 7.14. The board of directors of Reliant, or a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall prior to the Effective Time take all such action as may be reasonably required to cause any acquisitions of Reliant Common Stock by TCB Holdings Insiders as Merger Consideration in accordance with Article III of this Agreement to be exempt from liability pursuant to Rule 16b-3 under the Exchange Act to the fullest extent permitted by applicable Law.