ITEM 4. Description of the Notes.
ITEM 5. Interests of appointed experts and counsel.
ARTICLE 6. Indemnification of directors and officers.
Maryland law permits a Maryland corporation to include in its charter a provision that limits the liability of its directors and officers to the corporation and its shareholders for damages, except liability arising out of (1 ) the actual receipt of an advantage or improper gain in money, goods or services or (2) active or willful dishonesty which is established by a final judgment and which is material to the cause of action. Our Articles of Amendment and Restatement (the “Charter”) contain a provision that limits, to the maximum extent permitted by Maryland law, the liability of our directors, but not our officers, to us and our shareholders for damages.
Maryland law requires a Maryland corporation (unless otherwise provided in its charter, which our charter does not) to indemnify a director or officer who has succeeded, on the merits or otherwise, in the defense of any proceeding which he or she is made or threatened to be implicated by virtue of his or her functions in that capacity. Maryland law permits a Maryland corporation to indemnify its current and former directors and officers against, among other things, judgments, penalties, fines, settlements, and reasonable expenses actually incurred by them in any proceeding to which they might be engaged or threatened to be engaged a party by reason of their service in that capacity, 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 (1) was committed in bad faith or (2) was the result of active dishonesty and deliberate;
the director or officer has actually received an undue personal advantage in money, goods or services; Where
in the case of a criminal prosecution, the director or officer had reasonable cause to believe that the act or omission was illegal.
Under the MGCL, we cannot indemnify a director or officer in any action brought by us or in our rights in which the director or officer has been found liable to us or in any action in which the director or the executive was found liable on the basis that the benefit was received improperly. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even if the director or officer has failed to meet the prescribed standard of conduct or has been found liable in grounds that a personal benefit was improperly received. However, compensation for an adverse judgment in an action brought by the company or in its law, or a judgment of liability on the basis that a personal benefit was improperly received, will be limited to expenses.
In addition, Maryland law permits a Maryland corporation to advance reasonable expenses to a director or officer upon receipt (1) of a written affirmation by the director or officer of his or her belief in good faith that he has met the standard of conduct necessary for indemnification and (2) a written undertaking by him, or on his behalf, to refund the amount paid or reimbursed if it is ultimately determined that the standard of conduct has not not been respected.
Our Charter and Bylaws (the “Bylaws”) require that we indemnify our directors and officers (including any person who is or was a director or officer of us serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other business) to the fullest extent permitted by Maryland law as in effect from time to time. This right to indemnification continues for our former directors or officers and also applies to the benefit of the heirs, executors and personal and legal representatives of our directors and officers. We are not obligated to indemnify any director or officer (or their heirs, executors or personal or legal representatives) or to advance any expenses in connection with any proceeding (or any part thereof) initiated by a director or officer unless such proceeding (or any part thereof) has been authorized or consented to by the board of directors, with the exception of proceedings to assert rights of indemnification. Our directors and officers are also entitled to advance to us any expenses incurred in defending or otherwise participating in any proceeding prior to its final determination upon receipt of a recognizance by or on behalf of the director or officer receiving the advance from refund the amount advanced if it is ultimately determined that such person is not entitled to indemnification by us under our Charter and a written affirmation by the director or officer of his or her good faith belief that the standard necessary for compensation has been complied with. Our Charter and Bylaws also provide that we may, to the extent authorized from time to time by our Board of Directors, grant rights to indemnification and advancement of expenses to our employees and agents similar to those conferred in our charter and bylaws to our directors and officers and to the fullest extent permitted by applicable Maryland law.