Exhibit 10.8
INDEMNIFICATION
AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (this “Agreement”) is made
and entered March 10, 2004 (the “Effective Date”), by
and between Hospitality Properties Trust, a Maryland real estate
investment trust (the “Company”), and John G. Murray
(“Indemnitee”).
WHEREAS Indemnitee
currently serves as an officer of the Company and may, in
connection therewith, be subjected to claims, suits or proceedings
arising from such service; and
WHEREAS, as an
inducement to Indemnitee to continue to serve as such officer, the
Company has agreed to indemnify and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or
proceedings, to the fullest extent permitted by law as hereinafter
provided; and
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as
follows:
Section 1.
Definitions . For purposes of this
Agreement:
(a)
“Change in Control” means a change in control of the
Company occurring after the Effective Date of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange
Act of 1934, as amended (the “Act”), whether or not the
Company is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall
be deemed to have occurred if after the Effective Date (i) any
“person” (as such term is used in Sections 13(d) and
14(d) of the Act) is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing 10% or more of the
combined voting power in the election of trustees of the
Company’s then outstanding securities without the prior
approval of at least two-thirds of the members of the Board of
Trustees in office immediately prior to such person attaining such
percentage interest; (ii) there occurs a proxy contest, or the
Company is a party to a merger, consolidation, sale of assets, plan
of liquidation or other reorganization not approved by at least
two-thirds of the members of the Board of Trustees then in office,
as a consequence of which members of the Board of Trustees in
office immediately prior to such transaction or event constitute
less than a majority of the Board of Trustees thereafter; or (iii)
during any period of two consecutive years, other than as a result
of an event described in clause (a)(ii) of this Section 1,
individuals who at the beginning of such period constituted the
Board of Trustees (including for this purpose any new trustee whose
election or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds of the
trustees then still in office
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who were trustees at
the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Trustees.
(b)
“Corporate Status” means the status of a person who is
or was a director, trustee, officer or agent of the
Company.
(c)
“Disinterested Trustee” means a trustee of the Company
who is not and was not a party to the Proceeding in respect of
which indemnification is sought by Indemnitee.
(d)
“Expenses” means all expenses, including, but not
limited to, all reasonable attorneys’ fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, or being or preparing to be a witness in a
Proceeding.
(e)
“Independent Counsel” means a law firm, or a member of
a law firm, that is retained by Indemnitee and is not serving as
counsel to the Company.
(f)
“Proceeding” means any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding,
whether civil, criminal, administrative or investigative (including
on appeal), except one initiated by an Indemnitee pursuant to
Section 9 .
Section 2.
Indemnification - General . The Company shall
indemnify, and advance Expenses to, Indemnitee (a) as provided in
this Agreement and (b) otherwise to the fullest extent permitted by
Maryland law in effect on the date hereof and as amended from time
to time; provided , however , that no change in
Maryland law shall have the effect of reducing the benefits
available to Indemnitee hereunder based on Maryland law as in
effect on the date hereof. The rights of Indemnitee provided
in this Section 2 shall include, without limitation, the
rights set forth in the other sections of this Agreement, including
any additional indemnification permitted by Section 2-418(g) of the
Maryland General Corporation Law (“MGCL”), as
applicable to a Maryland real estate investment trust by virtue of
Section 8-301(15) of the Maryland REIT Law.
Section 3.
Proceedings Other Than Proceedings by or in the Right of the
Company . Indemnitee shall be entitled to the rights of
indemnification provided in this Section 3 if, by reason of
his Corporate Status, he is, or is threatened to be, made a party
to any threatened, pending, or completed Proceeding, other than a
Proceeding by or in the right of the Company. Pursuant to
this Section 3 , Indemnitee shall be indemnified against all
judgments, penalties, fines and amounts paid in settlement and all
Expenses incurred by him or on his behalf in connection with a
Proceeding by reason of Indemnitee’s Corporate Status unless
it is established that (i) the act or omission of Indemnitee 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, (ii) Indemnitee actually received an
improper personal benefit in money, property or services, or (iii)
in the case of any criminal Proceeding, Indemnitee had reasonable
cause to believe that his conduct was unlawful.
Section 4.
Proceedings by or in the Right of the Company .
Indemnitee shall be entitled to the rights of indemnification
provided in this Section 4 if, by reason of his Corporate
Status, he is, or is threatened to be, made a party to any
threatened, pending or completed Proceeding brought by or in the
right of the Company to procure a judgment in its favor.
Pursuant to this Section 4 , Indemnitee shall be indemnified
against all amounts paid in settlement and all Expenses incurred by
him or on his behalf in connection with such Proceeding unless it
is established that (i) the act or omission of Indemnitee was
material to the matter giving rise to such a Proceeding and (a) was
committed in bad faith or (b) was the result of active and
deliberate dishonesty or (ii) Indemnitee actually received an
improper personal benefit in money, property or
services.
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Section 5.
Indemnification for Expenses of a Party Who is Partly
Successful . Without limitation on Section 3 and
Section 4 , if Indemnitee is not wholly successful in any
Proceeding covered by this Agreement, but is successful, on the
merits or otherwise, as to one or more but less than all claims,
issues or matters in such Proceeding, the Company shall indemnify
Indemnitee under this Section 5 for all Expenses incurred by
him or on his behalf in connection with each successfully resolved
claim, issue or matter, allocated on a reasonable and proportionate
basis. For purposes of this Section and without limitation,
the termination of any claim, issue or matter in such a Proceeding
by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
Section 6.
Advance of Expenses . The Company shall advance all
Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding to which Indemnitee is, or is threatened to be, made
a party or a witness, within ten days after the receipt by the
Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by a
written affirmation by Indemnitee of Indemnitee’s good faith
belief that the standard of conduct necessary for indemnification
by the Company as authorized by law and by this Agreement has been
met and a written undertaking by or on behalf of Indemnitee, in
substantially the form attached hereto as Exhibit A or in
such form as may be required under applicable law as in effect at
the time of the execution thereof, to reimburse the portion of any
Expenses advanced to Indemnitee relating to claims, issues or
matters in the Proceeding as to which it shall ultimately be
established that the standard of conduct has not been met and which
have not been successfully resolved as described in Section
5 . To the extent that Expenses advanced to Indemnitee do
not relate to a specific claim, issue or matter in the Proceeding,
such Expenses shall be allocated on a reasonable and proportionate
basis. The undertaking required by this Section 6 shall be an
unlimited general obligation by or on behalf of Indemnitee and
shall be accepted without reference to Indemnitee’s financial
ability to repay such advanced Expenses and without any requirement
to post security therefor.
Section 7.
Procedure for Determination of Entitlement to
Indemnification .
(a)
To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including such
documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification. The
Secretary of the Company shall, promptly upon receipt of such a
request for indemnification, advise the Board of Trustees in
writing that Indemnitee has requested indemnification.
(b)
Upon written request by Indemnitee for indemnification pursuant to
the first sentence of Section 7(a) hereof, a determination,
if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall promptly be made in the specific case:
(i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board of Trustees, a copy of
which shall be delivered to Indemnitee; or (ii) if a Change of
Control shall not have occurred or if after a Change of Control
Indemnitee shall so request, (A) by the Board of Trustees (or a
duly authorized committee thereof) by a majority vote of a quorum
consisting of Disinterested Trustees (as herein defined), or (B) if
a quorum of the Board of Trustees consisting of Disinterested
Trustees is not obtainable or, even if obtainable, such quorum of
Disinterested Trustees so directs, by Independent Counsel in a
written opinion to the Board of Trustees, a copy of which shall be
delivered to Indemnitee, or (C) if so directed by a majority of the
members of the Board of Trustees, by the shareholders of the
Company; and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten
days after such determination. Indemnitee shall cooperate
with the person, persons or entity making such determination with
respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon
reasonable advance request any documentation or information which
is not privileged or otherwise protected from disclosure and which
is reasonably available to Indemnitee and reasonably necessary to
such determination. Any Expenses incurred by Indemnitee in so
cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the
dete
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