WILLIAM DONALD SCHAEFER, Governor                        Ch. 3

BASED ON A FINDING   IN THE PROCEEDING THAT THE PERSON'S 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; OR

(3) WITH RESPECT TO ANY ACTION DESCRIBED IN
SUBSECTION (B) OF THIS SECTION.

(B)  THIS SECTION DOES NOT APPLY TO AN ACTION BROUGHT BY OR
ON BEHALF OF A STATE GOVERNMENTAL ENTITY, RECEIVER, CONSERVATOR,
OR DEPOSITOR AGAINST A DIRECTOR OR OFFICER OF:

(1)  A BANKING INSTITUTION AS DEFINED IN § 1-101 OF
THE FINANCIAL INSTITUTIONS ARTICLE;

(2)  A CREDIT UNION AS DESCRIBED IN § 6-201 OF THE
FINANCIAL INSTITUTIONS ARTICLE;

(3)  A SAVINGS AND LOAN ASSOCIATION AS DEFINED IN §
8-101 OF THE FINANCIAL INSTITUTIONS ARTICLE; OR

(4)  A SUBSIDIARY OF A BANKING INSTITUTION, CREDIT
UNION, OR SAVINGS AND LOAN ASSOCIATION DESCRIBED IN THIS
SUBSECTION.

(C)  THIS SECTION MAY NOT BE CONSTRUED TO AFFECT THE
LIABILITY OF A PERSON IN ANY CAPACITY OTHER THAN THE PERSON'S
CAPACITY AS A DIRECTOR OR OFFICER.

2-418.

(b) (1) A corporation may indemnify any director made a
party to any proceeding by reason of service in that capacity [if
the director:

(i) Acted in good faith;

(ii) Reasonably believed:

1.  In the case of conduct in the
director's official capacity with the corporation, that the
conduct was in the best interests of the corporation; and

2.  In all other cases, that the conduct
was at least not opposed to the best interests of the
corporation; and] UNLESS IT IS PROVED THAT:

(I) THE ACT OR OMISSION OF THE DIRECTOR WAS
MATERIAL TO THE CAUSE OF ACTION ADJUDICATED IN THE PROCEEDING;
AND

1. WAS COMMITTED IN BAD FAITH; OR

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