All business and affairs of a corporation, whether or not in the ordinary course, shall be managed by or under the direction of a board of directors. All powers of the corporation may be exercised by or under authority of the board of directors except as conferred on or reserved to the stockholders by law or by the charter or bylaws of the corporation.

Each corporation shall have at least one director. Subject to the provisions of subsection (a) of this section and except for a corporation that has elected to be subject to § 3-804(b) of this article, a Maryland corporation shall have the number of directors provided in its charter until changed by the bylaws. Subject to the provisions of subsection (a) of this section and except for a corporation that has elected to be subject to § 3-804(b) of this article, the bylaws may: Alter the number of directors set by the charter; and Authorize a majority of the entire board of directors to alter within specified limits the number of directors set by the charter or the bylaws, but the action may not affect the tenure of office of any director.

Each director and each nominee for director of a corporation shall have the qualifications required by the charter or bylaws of the corporation. Unless required by its charter or bylaws, a director need not be a stockholder in the corporation.

Until successors are elected and qualify, the board of directors consists of the individuals named as directors in the charter. Except as provided in paragraph (2) of this subsection, at each annual meeting of stockholders, the stockholders shall elect directors to hold office until the earlier of: The next annual meeting of stockholders and until their successors are elected and qualify; The time provided in the terms of any class or series of stock pursuant to which such directors are elected; or The time a director ceases to have the qualifications that were required by the charter or bylaws of the corporation at the time the director was elected, if the charter or bylaws at the time the director was elected required the director’s term to end on a failure to have those qualifications. Except for a corporation that has elected to be subject to § 3–803 of this article, if the directors are divided into classes, the term of office may be provided in the bylaws, except that: The term of office of a director may not be longer than 5 years or, except in the case of an initial or substitute director, shorter than the period between annual meetings; and The term of office of at least one class shall expire each year. Each share of stock may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted. Unless the charter or bylaws of a corporation provide otherwise, a plurality of all the votes cast at a meeting at which a quorum is present is sufficient to elect a director.

Except as provided in paragraph (2) of this subsection, in case of failure to elect directors at the designated time, the directors holding over shall continue to serve as directors of the corporation until their successors are elected and qualify. If the number of directors to be elected at the designated time, together with the number of directors who otherwise would hold over, exceeds the number of directors who were to be elected, then the directors who will hold over and continue to serve as directors of the corporation until their successors are elected and qualify shall be determined: By a majority vote of the directors elected at the designated time and, if the board is classified, any directors whose terms did not expire at the designated time, whether or not sufficient to constitute a quorum; or As otherwise provided in the charter or bylaws of the corporation. A director not elected annually in accordance with § 2–501(b) of this title shall be deemed to be continuing in office and shall not be deemed to be holding over under subsection (a) of this section until after the time at which an annual meeting is required to be held under § 2–501(b) of this title or the charter or bylaws of the corporation.

In this section, “act” includes, as the context requires: An act, an omission, a failure to act, or a determination made not to act; or To act, omit to act, fail to act, or make a determination not to act. This section applies to acts of an individual who: Is or was a director of a corporation; and Is acting or was acting in the individual’s official capacity as a director of a corporation. A director of a corporation shall act: In good faith; In a manner the director reasonably believes to be in the best interests of the corporation; and With the care that an ordinarily prudent person in a like position would use under similar circumstances. A director is entitled to rely on any information, opinion, report, or statement, including any financial statement or other financial data, prepared or presented by: An officer or employee of the corporation whom the director reasonably believes to be reliable and competent in the matters presented; A lawyer, certified public accountant, or other person, as to a matter which the director reasonably believes to be within the person’s professional or expert competence; or A committee of the board on which the director does not serve, as to a matter within its designated authority, if the director reasonably believes the committee to merit confidence. A director is not acting in good faith if the director has any knowledge concerning the matter in question which would cause the reliance to be unwarranted. A director who acts in accordance with the standard of conduct provided in this section shall have the immunity from liability described under § 5–417 of the Courts Article. The standard of conduct provided in this section does not require a director of a corporation to: Act to accept, recommend, or respond on behalf of the corporation to a proposal by an acquiring person as defined in § 3–801 of this article; Act to authorize the corporation to redeem any rights under, modify, or render inapplicable, a stockholder rights plan; Act to elect on behalf of the corporation to be subject to or refrain from electing on behalf of the corporation to be subject to any or all of the provisions of Title 3, Subtitle 8 of this article; Act to make a determination under the provisions of Title 3, Subtitle 6 or Subtitle 7 of this article; or Act solely because of: The effect the act may have on an acquisition or potential acquisition of control of the corporation; or The amount or type of consideration that may be offered or paid to stockholders of the corporation in an acquisition or a potential acquisition of control of the corporation. An act of a director of a corporation is presumed to be in accordance with subsection (c) of this section. An act of a director of a corporation relating to or affecting an acquisition or a potential acquisition of control of the corporation or any other transaction or potential transaction involving the corporation may not be subject to a higher duty or greater scrutiny than is applied to any other act of a director. This section: Is the sole source of duties of a director to the corporation or the stockholders of the corporation, whether or not a decision has been made to enter into an acquisition or a potential acquisition of control of the corporation or enter into any other transaction involving the corporation; and Applies to any act of a director, including an act as a member of a committee of the board of directors.

The charter of the corporation may include any provision expanding or limiting the liability of its directors and officers to the corporation or its stockholders as described under § 5-418 of the Courts and Judicial Proceedings Article.

This section applies to a corporation that is an investment company, as defined by the Investment Company Act of 1940. A director of a corporation who with respect to the corporation is not an interested person, as defined by the Investment Company Act of 1940, shall be deemed to be independent and disinterested when making any determination or taking any action as a director.

The stockholders of a corporation may remove any director, with or without cause, by the affirmative vote of a majority of all the votes entitled to be cast generally for the election of directors, except: As provided in subsection (b) of this section; As otherwise provided in the charter of the corporation; or For a corporation that has elected to be subject to § 3–804(a) of this article. Unless the charter of the corporation provides otherwise: If the stockholders of any class or series are entitled separately to elect one or more directors, a director elected by stockholders of that class or series may not be removed without cause except by the affirmative vote of a majority of all the votes of that class or series; If a corporation has cumulative voting for the election of directors and fewer than all directors are to be removed, a director may not be removed without cause if the votes cast against the director’s removal would be sufficient to elect the director if then cumulatively voted at an election of the entire board of directors, or, if there is more than one class of directors, at an election of the class of directors of which the director is a member; and If the directors have been divided into classes, a director may not be removed without cause. A resignation of a director given in writing or by electronic transmission may provide that: The resignation will be effective at a later time or on the occurrence of an event; The resignation is irrevocable on the occurrence of the event; and If the resignation will be effective on the failure of the director to receive a specified vote for reelection, the resignation is irrevocable.

Except as provided in paragraph (2) of this subsection and except for a corporation that has elected to become subject to § 3-804(c) of this article, the stockholders may elect a successor to fill a vacancy on the board of directors which results from the removal of a director. If the stockholders of any class or series are entitled separately to elect one or more directors, the stockholders of that class or series may elect a successor to fill a vacancy on the board of directors which results from the removal of a director elected by that class or series. Except as provided in paragraph (2) of this subsection or unless the charter or the bylaws of the corporation provide otherwise: A majority of the remaining directors, whether or not sufficient to constitute a quorum, may fill a vacancy on the board of directors which results from any cause except an increase in the number of directors; and A majority of the entire board of directors may fill a vacancy which results from an increase in the number of directors. If the stockholders of any class or series are entitled separately to elect one or more directors, a majority of the remaining directors elected by that class or series or the sole remaining director elected by that class or series may fill any vacancy among the number of directors elected by that class or series. Unless the corporation has elected to be subject to § 3–804(c)(3) of this article, a director elected by the board of directors to fill a vacancy serves until the next annual meeting of stockholders and until his successor is elected and qualifies. A director elected by the stockholders to fill a vacancy which results from the removal of a director serves for the balance of the term of the removed director.

Unless the charter or bylaws of the corporation require a greater proportion or this article requires a different proportion, the action of a majority of the directors present at a meeting at which a quorum is present is the action of the board of directors. Unless the bylaws of the corporation provide otherwise, a majority of the entire board of directors constitutes a quorum for the transaction of business. The bylaws may provide that less than a majority, but not less than one–third of the entire board of directors, may constitute a quorum unless: There are only two or three directors, in which case not less than two may constitute a quorum; or There is only one director, in which case that one will constitute a quorum. Any action required or permitted to be taken at a meeting of the board of directors or of a committee of the board may be taken without a meeting if a unanimous consent which sets forth the action is: Given in writing or by electronic transmission by each member of the board or committee entitled to vote on the matter; and Filed in paper or electronic form with the minutes of proceedings of the board or committee. Unless the charter requires otherwise, any action required or permitted to be taken at a meeting of the board of directors or of a committee of the board of a corporation that is registered as an open–end investment company under the federal Investment Company Act of 1940 may be taken without a meeting if the consent of a majority of the entire board of directors or a majority of the directors serving on the committee and in the manner and by the vote required under the federal Investment Company Act of 1940 which sets forth the action is: Given in writing or by electronic transmission by the directors who consent to the action; Filed in paper or electronic form with the minutes or proceedings of the board or committee; and Sent within 3 days after the effective date of the action to all directors or to all members of the committee. A director who did not consent and receives a notice under subsection (d) of this section may file a dissent to the action by sending a notice of dissent to the secretary of the corporation within 10 days of receipt of the notice by: Certified mail, return receipt requested, bearing a postmark from the United States Postal Service; or Electronic transmission. An individual, whether or not then a director, may assent to an action by a consent that will be effective at a future time that is no later than 60 days after the consent is delivered to the corporation or its agent. The effective time of a consent under this subsection may include a time determined on the happening of an event that occurs no later than 60 days after the consent is delivered to the corporation or its agent. A consent under this subsection shall be deemed to have been given at the effective time if the individual: Is a director at the effective time; and Did not revoke the consent before the effective time. Unless otherwise provided in the consent, a consent under this subsection is revocable before the effective time. The charter may provide that one or more directors or a class of directors shall have more or less than one vote per director on any matter. If the charter provides that one or more directors shall have more or less than one vote per director on any matter, every reference in this article to a majority or other proportion of directors shall refer to a majority or other proportion of votes entitled to be cast by the directors.

Unless the bylaws of the corporation provide otherwise, a regular or special meeting of the board of directors may be held at any place in or out of the State or by means of remote communication. Notice of each meeting of the board of directors shall be given as provided in the bylaws. Unless the bylaws provide otherwise, the notice: Shall be in writing or delivered by electronic transmission; and Need not state the business to be transacted at or the purpose of any regular or special meeting of the board of directors. Whenever this article or the charter or bylaws of a corporation require notice of the time, place, or purpose of a meeting of the board of directors or a committee of the board, a person who is entitled to the notice waives notice if the person: Before or after the meeting delivers a written waiver or a waiver by electronic transmission which is filed with the records of the meeting; or Is present at the meeting. Unless restricted by the charter or bylaws of the corporation, members of the board of directors or a committee of the board may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means constitutes presence in person at the meeting.

A director of a corporation who is present at a meeting of its board of directors at which action on any corporate matter is taken is presumed to have assented to the action unless: The director announces the director’s dissent at the meeting; and The dissent is entered in the minutes of the meeting; The director files the dissent to the action in writing with or by electronic transmission to the secretary of the meeting before the meeting is adjourned; or The director forwards the dissent within 24 hours after the meeting is adjourned to the secretary of the meeting or the secretary of the corporation by: Certified mail, return receipt requested, bearing a postmark from the United States Postal Service; or Electronic transmission. The right to dissent does not apply to a director who: Voted in favor of the action; or Failed to make the director’s dissent known at the meeting.

The board of directors of a corporation may: Appoint from among its members an executive committee and other committees composed of one or more directors; and Delegate to these committees any of the powers of the board of directors, except the power to: Authorize the issuance of stock other than as provided in subsection (b) of this section; Recommend to the stockholders any action which requires stockholder approval, other than the election of directors; Amend the bylaws; or Approve any merger or share exchange which does not require stockholder approval. If the board of directors has given general authorization for the issuance of stock providing for or establishing a method or procedure for determining the maximum number or the maximum aggregate offering price of shares to be issued, a committee of the board, in accordance with that general authorization or any stock option or other plan or program adopted by the board, may authorize or fix the terms of stock subject to classification or reclassification and the terms on which any stock may be issued, including all terms and conditions required or permitted to be established or authorized by the board of directors under §§ 2–203 and 2–208 of this title. The bylaws may authorize the members of a committee present at any meeting, whether or not they constitute a quorum, to appoint a director to act in the place of an absent member. The appointment of any committee, the delegation of authority to it, or action by it under that authority does not constitute, of itself, compliance by any director, not a member of the committee, with the standard provided in § 2-405.1 of this subtitle for the performance of duties of directors. Notwithstanding subsection (a) of this section or § 2–408(e) of this subtitle, the charter or bylaws of a corporation, or any agreement to which the corporation is a party and which has been approved by the board of directors, may provide for: The establishment of one or more standing committees or for the creation of one or more committees upon the occurrence of certain events; and The composition of the membership, and the qualifications and the voting and other rights of members of any such committee, subject to the continued service of members of the committee as directors.

Each Maryland corporation shall have the following officers: A president; A secretary; and A treasurer. In addition to the required officers, a Maryland corporation may have any other officer provided for in the bylaws.

Unless the bylaws provide otherwise, the board of directors shall elect the officers. Unless the bylaws provide otherwise, an officer serves for one year and until his successor is elected and qualifies. The board of directors may remove any officer or agent of the corporation. The removal of an officer or agent does not prejudice any of his contract rights. Unless the bylaws provide otherwise, the board of directors may fill a vacancy which occurs in any office.

As between himself and the corporation, an officer or agent of the corporation has the authority and shall perform the duties in the management of the assets and affairs of the corporation as: Provided in the bylaws; and Determined from time to time by resolution of the board of directors not inconsistent with the bylaws. The rights of any third party are not affected or impaired by any bylaw or resolution referred to in subsection (a) of this section unless the third party has knowledge of the bylaw or resolution.

If permitted by the bylaws, a person may hold more than one office in a corporation but may not serve concurrently as both president and vice president of the same corporation. A person who holds more than one office in a corporation may not act in more than one capacity to execute, acknowledge, or verify an instrument required by law to be executed, acknowledged, or verified by more than one officer.

A corporation may lend money to, guarantee an obligation of, or otherwise assist an officer or other employee of the corporation or of its direct or indirect subsidiary, including an officer or employee who is a director of the corporation or the subsidiary, if the loan, guarantee, or assistance: In the judgment of the directors, reasonably may be expected to benefit the corporation; or Is an advance made against indemnification in accordance with § 2-418(f) of this subtitle. The loan, guarantee, or other assistance may be: With or without interest; Unsecured; or Secured in any manner that the board of directors approves, including a pledge of the stock of the corporation.

In this section the following words have the meanings indicated. “Corporation” includes any domestic or foreign predecessor entity of a corporation in a merger, consolidation, or other transaction in which the predecessor’s existence ceased upon consummation of the transaction. “Director” means any person who is or was a director of a corporation and any person who, while a director of a corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, limited liability company, other enterprise, or employee benefit plan. “Expenses” include attorney’s fees. “Official capacity” means: When used with respect to a director, the office of director in the corporation; and When used with respect to a person other than a director as contemplated in subsection (j) of this section, the elective or appointive office in the corporation held by the officer, or the employment or agency relationship undertaken by the employee or agent in behalf of the corporation. “Official capacity” does not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, other enterprise, or employee benefit plan. “Party” includes a person who was, is, or is threatened to be made a named defendant or respondent in a proceeding. “Proceeding” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative. A corporation may indemnify any director made a party to any proceeding by reason of service in that capacity unless it is established that: The act or omission of the director was material to the matter giving rise to the proceeding; and Was committed in bad faith; or Was the result of active and deliberate dishonesty; or The director actually received an improper personal benefit in money, property, or services; or In the case of any criminal proceeding, the director had reasonable cause to believe that the act or omission was unlawful. Indemnification may be against judgments, penalties, fines, settlements, and reasonable expenses actually incurred by the director in connection with the proceeding. However, if the proceeding was one by or in the right of the corporation, indemnification may not be made in respect of any proceeding in which the director shall have been adjudged to be liable to the corporation. The termination of any proceeding by judgment, order, or settlement does not create a presumption that the director did not meet the requisite standard of conduct set forth in this subsection. The termination of any proceeding by conviction, or a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the director did not meet that standard of conduct. A corporation may not indemnify a director or advance expenses under this section for a proceeding brought by that director against the corporation, except: For a proceeding brought to enforce indemnification under this section; or If the charter or bylaws of the corporation, a resolution of the board of directors of the corporation, or an agreement approved by the board of directors of the corporation to which the corporation is a party expressly provide otherwise. A director may not be indemnified under subsection (b) of this section in respect of any proceeding charging improper personal benefit to the director, whether or not involving action in the director’s official capacity, in which the director was adjudged to be liable on the basis that personal benefit was improperly received. Unless limited by the charter: A director who has been successful, on the merits or otherwise, in the defense of any proceeding referred to in subsection (b) of this section, or in the defense of any claim, issue, or matter in the proceeding, shall be indemnified against reasonable expenses incurred by the director in connection with the proceeding, claim, issue, or matter in which the director has been successful. A court of appropriate jurisdiction, upon application of a director and such notice as the court shall require, may order indemnification in the following circumstances: If it determines a director is entitled to reimbursement under paragraph (1) of this subsection, the court shall order indemnification, in which case the director shall be entitled to recover the expenses of securing such reimbursement; or If it determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director has met the standards of conduct set forth in subsection (b) of this section or has been adjudged liable under the circumstances described in subsection (c) of this section, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any proceeding by or in the right of the corporation or in which liability shall have been adjudged in the circumstances described in subsection (c) of this section shall be limited to expenses. A court of appropriate jurisdiction may be the same court in which the proceeding involving the director’s liability took place. Indemnification under subsection (b) of this section may not be made by the corporation unless authorized for a specific proceeding after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in subsection (b) of this section. Such determination shall be made: By the board of directors by a majority vote of a quorum consisting of directors not, at the time, parties to the proceeding, or by a majority vote of a committee of the board consisting solely of one or more directors not, at the time, parties to such proceeding and who were duly designated to act in the matter by a majority vote of the directors who are not parties to the proceeding; By special legal counsel selected by the board of directors or a committee of the board by vote as set forth in item (i) of this paragraph, or, if the requisite quorum of the full board cannot be obtained therefor and the committee cannot be established, by a majority vote of the full board in which directors who are parties may participate; or By the stockholders. Authorization of indemnification and determination as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible. However, if the determination that indemnification is permissible is made by special legal counsel, authorization of indemnification and determination as to reasonableness of expenses shall be made in the manner specified in paragraph (2)(ii) of this subsection for selection of such counsel. Shares held by directors who are parties to the proceeding may not be voted on the subject matter under this subsection. Reasonable expenses incurred by a director who is a party to a proceeding may be paid or reimbursed by the corporation in advance of the final disposition of the proceeding upon receipt by the corporation of: A written affirmation by the director of the director’s good faith belief that the standard of conduct necessary for indemnification by the corporation as authorized in this section has been met; and A written undertaking by or on behalf of the director to repay the amount if it shall ultimately be determined that the standard of conduct has not been met. The undertaking required by paragraph (1)(ii) of this subsection shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make the repayment. Payments under this subsection shall be made as provided by the charter, bylaws, or contract or as specified in subsection (e)(2) of this section. The indemnification and advancement of expenses provided or authorized by this section may not be deemed exclusive of any other rights, by indemnification or otherwise, to which a director may be entitled under the charter, the bylaws, a resolution of stockholders or directors, an agreement or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. This section does not limit the corporation’s power to pay or reimburse expenses incurred by a director in connection with an appearance as a witness in a proceeding at a time when the director has not been made a named defendant or respondent in the proceeding. For purposes of this section: The corporation shall be deemed to have requested a director to serve an employee benefit plan where the performance of the director’s duties to the corporation also imposes duties on, or otherwise involves services by, the director to the plan or participants or beneficiaries of the plan; Excise taxes assessed on a director with respect to an employee benefit plan pursuant to applicable law shall be deemed fines; and Action taken or omitted by the director with respect to an employee benefit plan in the performance of the director’s duties for a purpose reasonably believed by the director to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation. Unless limited by the charter: An officer of the corporation shall be indemnified as and to the extent provided in subsection (d) of this section for a director and shall be entitled, to the same extent as a director, to seek indemnification pursuant to the provisions of subsection (d) of this section; A corporation may indemnify and advance expenses to an officer, employee, or agent of the corporation to the same extent that it may indemnify directors under this section; and A corporation, in addition, may indemnify and advance expenses to an officer, employee, or agent who is not a director to such further extent, consistent with law, as may be provided by its charter, bylaws, general or specific action of its board of directors, or contract. A corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, limited liability company, other enterprise, or employee benefit plan against any liability asserted against and incurred by such person in any such capacity or arising out of such person’s position, whether or not the corporation would have the power to indemnify against liability under the provisions of this section. A corporation may provide similar protection, including a trust fund, letter of credit, or surety bond, not inconsistent with this section. The insurance or similar protection may be provided by a subsidiary or an affiliate of the corporation. Any indemnification of, or advance of expenses to, a director in accordance with this section, if arising out of a proceeding by or in the right of the corporation, shall be reported in writing to the stockholders with the notice of the next stockholders’ meeting or prior to the meeting.

If subsection (b) of this section is complied with, a contract or other transaction between a corporation and any of its directors or between a corporation and any other corporation, firm, or other entity in which any of its directors is a director or has a material financial interest is not void or voidable solely because of any one or more of the following: The common directorship or interest; The presence of the director at the meeting of the board or a committee of the board which authorizes, approves, or ratifies the contract or transaction; or The counting of the vote of the director for the authorization, approval, or ratification of the contract or transaction. Subsection (a) of this section applies if: The fact of the common directorship or interest is disclosed or known to: The board of directors or the committee, and the board or committee authorizes, approves, or ratifies the contract or transaction by the affirmative vote of a majority of disinterested directors, even if the disinterested directors constitute less than a quorum; or The stockholders entitled to vote, and the contract or transaction is authorized, approved, or ratified by a majority of the votes cast by the stockholders entitled to vote other than the votes of shares owned of record or beneficially by the interested director or corporation, firm, or other entity; or The contract or transaction is fair and reasonable to the corporation. Common or interested directors or the stock owned by them or by an interested corporation, firm, or other entity may be counted in determining the presence of a quorum at a meeting of the board of directors or a committee of the board or at a meeting of the stockholders, as the case may be, at which the contract or transaction is authorized, approved, or ratified. If a contract or transaction is not authorized, approved, or ratified in one of the ways provided for in subsection (b)(1) of this section, the person asserting the validity of the contract or transaction bears the burden of proving that the contract or transaction was fair and reasonable to the corporation at the time it was authorized, approved, or ratified. This subsection does not apply to the fixing by the board of directors of reasonable compensation for a director, whether as a director or in any other capacity. Any procedures authorized by § 2–418 of this subtitle shall be deemed to satisfy subsection (b)(1) of this section. Any charter, bylaw, contract, or transaction requiring or permitting indemnification, including advances of expenses, in accordance with § 2–418 of this subtitle is fair and reasonable to the corporation.