money damages, except to the extent that (1) it is proved that the person actually received an improper benefit or profit in money, property or services; or (2) a judgment or other
final adjudication adverse to the person is entered in a proceeding based on a finding that the persons action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the
proceeding. Our charter provides for elimination of the liability of our directors and officers to us or our stockholders for money damages to the maximum extent permitted by Maryland law from time to time.
The MGCL requires us (unless our charter were to provide otherwise, which it does not) to indemnify a director or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party to by reason of his or her service in that capacity. The MGCL permits us to indemnify our present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to or in which they may be made or threatened to be made a party to or witness in by reason of their service
in those or certain other capacities unless it is established that:
|
|
|
the act or omission of the director or officer was material to the matter giving rise to the proceeding and
(a) was committed in bad faith or (b) was the result of active and deliberate dishonesty;
|
|
|
|
the director or officer actually received an improper personal benefit in money, property or services; or
|
|
|
|
in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or
omission was unlawful.
|
The MGCL prohibits us from indemnifying a director or officer who has been adjudged liable in a
suit by us or on our behalf or in which the director or officer was adjudged liable on the basis that a personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and
reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that a personal benefit was improperly received; however, indemnification for an adverse
judgment in a suit by us or on our behalf, or for a judgment of liability on the basis that a personal benefit was improperly received, is limited to expenses.
In addition, the MGCL permits us to advance reasonable expenses to a director or officer upon our receipt of (a) a written affirmation by
the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification and (b) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed if
it is ultimately determined that the standard of conduct was not met.
To the maximum extent permitted by Maryland law, our charter and
bylaws obligate us to indemnify any individual who is made or threatened to be made a party to or witness in a proceeding by reason of his or her service:
|
|
|
as a director or officer of us; or
|
|
|
|
while a director or officer and at our request, as a director, officer, trustee, member, manager or partner of
another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise,
|
in each case, from and against any claim or liability to which he or she may become subject or that he or she may incur by reason of his or her service in any
of these capacities, and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding. Our charter and bylaws also permit us, with the approval of our Board, to indemnify and advance expenses to any individual
who served any of our predecessors in any of the capacities described above and any employee or agent of ours or any of our predecessors.
2