Company: NGVC
Filing Date: 2025-01-24
Form Type: DEF 14A
Source: 0001437749-25-001800
Chunk: 14

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-01-24
Form: DEF 14A
Chunk 14
---
 and Insurance Costs for Stockholders

Prior to the DGCL amendment, stockholder plaintiffs brought certain claims in Delaware – which would otherwise have been exculpated if brought against directors – against individual officers to avoid dismissal of such claims. The amendment of the DGCL was adopted in part to address rising litigation and insurance costs for corporations that resulted from the inconsistent treatment under Delaware corporate law of exculpation of directors and officers. Accordingly, this amendment of our Certificate of Incorporation will more closely align the protections available to our officers with those currently available to our directors. In addition, we are not proposing this change to the Certificate of Incorporation in anticipation of any specific litigation confronting the Company; instead, we are proposing this change on a prospective basis to help mitigate potential future harm to the Company and its stockholders.

<div align='center'>7</div>

Enhanced Ability to Attract and Retain Officers

The Board believes that enhancing our ability to retain and attract experienced officers is in the best interests of the Company, and we should seek to assure such persons that exculpation under certain circumstances is available. We believe that failing to adopt this proposal to amend our Certificate of Incorporation could impact our recruitment and retention of exceptional officer candidates who conclude that the potential exposure to liabilities, costs of defense, and other risks of proceedings exceeds the benefits of serving as an officer of the Company. The protections provided by this amendment have long been available to directors, and the Board believes that aligning these protections are in the best interests of the Company.

Accordingly, in response to the benefits we believe would accrue to the Company and our stockholders in the form of an enhanced ability to attract and retain talented officers and address rising litigation and insurance costs for stockholders, the Board recommends that our stockholders approve the amendment of our Certificate of Incorporation to limit the liability of certain officers of the Company as permitted under Delaware law.

Proposal

Stockholders are being asked to approve an amendment to Section 10.1 of Article 10 of our Certificate of Incorporation to provide for exculpation of certain of our officers from liability in specific circumstances. If approved, this proposal would amend and restate Section 10.1 of Article 10 of the Certificate of Incorporation to read in its entirety as follows (additions are indicated by double underlining):

Limitation on Director and Officer Liability. No director or officer of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director