BCSI » Topics » Item 13. Certain Relationships and Related Transactions, and Director Independence

This excerpt taken from the BCSI 10-K filed Jun 22, 2009.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated by reference from the responsive information to be contained in our Proxy Statement to be issued in conjunction with our annual stockholder’s meeting to be held on October 2, 2009.

This excerpt taken from the BCSI 10-K filed Jun 30, 2008.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated by reference from the responsive information to be contained in our Proxy Statement.

This excerpt taken from the BCSI 10-K filed Jul 13, 2007.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information under the captions “Certain Relationships and Related Transactions,” and “Independence of Directors,” appearing in the Proxy Statement, is hereby incorporated by reference.

This excerpt taken from the BCSI 10-K filed Mar 28, 2007.

Item 13. Certain Relationships and Related Transactions and Director Independence.

 

Our Certificate of Incorporation limits the liability of our directors for monetary damages arising from a breach of their fiduciary duty as directors, except to the extent otherwise required by the Delaware General Corporation Law. Such limitation of liability does not affect the availability of equitable remedies such as injunctive relief or rescission.

 

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Our Bylaws provide that we shall indemnify our directors and officers to the fullest extent permitted by Delaware law, including in circumstances in which indemnification is otherwise discretionary under Delaware law. We have also entered into indemnification agreements with our officers and directors containing provisions that may require us, among other things, to indemnify such officers and directors against certain liabilities that may arise by reason of their status or service as directors or officers and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. We expect to have indemnification obligations to certain current and former officers and directors in connection with matters relating to the stock option investigation and related litigation, and may have indemnification obligations to certain current and former officers and directors in connection with certain of our outstanding litigation matters. See Item 3, “Legal Proceedings,” Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Background of the Stock Option Investigation, Findings, Restatement of Consolidated Financial Statements, Remedial Measures and Related Proceedings,” Note 3 of the Notes to Consolidated Financial Statements, and Item 9A, “Controls and Procedures.”

 

On June 22, 2006, we sold an aggregate of $42,060,000 in equity securities to entities affiliated with Francisco Partners and entities affiliated with Sequoia Capital (the “Pipe Financing”). The Pipe Financing consisted of 42,060 shares of Blue Coat’s Series A Preferred Stock priced at $1,000 per share. Entities affiliated with Francisco Partners purchased $25,236,000 of Series A Preferred Stock in the financing and entities affiliated with Sequoia Capital purchased $16,824,000 of Series A Preferred Stock in the financing. The 42,060 shares of Series A Preferred Stock are initially convertible into 2,400,000 shares of our Common Stock. The conversion price of each share of Series A Preferred Stock is $17.525 per share. The rights, preferences and privileges of the Series A Preferred Stock are contained in the Certificate of Designation, Preferences and Rights of Series A Preferred Stock, which is attached as Exhibit 3.5 to this Report on Form 10-K. The securities were sold pursuant to a Series A Preferred Stock Purchase Agreement, which is attached as Exhibit 10.24 to this Report on Form 10-K. In connection with the sale of the shares of Series A Preferred Stock, we also entered into an Investors’ Rights Agreement with entities affiliated with Francisco Partners, entities affiliated with Sequoia Capital and Network Appliance. The Investors’ Rights Agreement is attached as Exhibit 10.25 to this Report on Form 10-K. Entities affiliated with Francisco Partners, entities affiliated with Sequoia Capital and us entered into a Voting Agreement pursuant to which Francisco Partners and Sequoia Capital agree to vote their shares in the case of an election of the director to be elected by the Series A Preferred Stock. A copy of such Voting Agreement is attached as Exhibit 9.1 to this Report on Form 10-K. On June 22, 2006, in connection with the Pipe Financing, we appointed Keith Geeslin to our Board of Directors. Mr. Geeslin has been a Partner at Francisco Partners since January 2004.

 

Independence of Directors

 

The Board of Directors is comprised of a majority of directors who qualify as independent directors under applicable SEC and Nasdaq rules. The Board of Directors has determined Messrs. Barth, Hanna, Geeslin and Howes to be independent under NASDAQ Rule 4200.

 

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