(a) County to indemnify fiduciary. Subject to the provisions of this section, the County shall indemnify a fiduciary who is, or is threatened to be made, a party to an action or proceeding, including an administrative or investigative proceeding, by reason of the fiduciary's service as a fiduciary.
(b) Scope of indemnification.
(1) With respect to a civil, administrative, or investigative action or proceeding, the County shall indemnify a fiduciary for the expenses of the action or proceeding if the fiduciary acted in good faith and in a manner the fiduciary reasonably believed to be in or not opposed to the best interest of the System.
(2) With respect to a criminal action or proceeding, the County shall indemnify a fiduciary for the expenses of the action or proceeding if the fiduciary acted in good faith, acted in a manner the fiduciary reasonably believed to be in or not opposed to the best interest of the System, and did not have reasonable cause to believe that the fiduciary's conduct was unlawful.
(3) The expenses to which a fiduciary is entitled under this subsection include reasonable attorney's fees, judgments, fines, and other expenses that were actually and reasonably incurred by the fiduciary in connection with the action or proceeding.
(c) Termination of action or proceeding. Any termination of an action or proceeding does not, of itself, create a presumption that the fiduciary did not meet the standards for indemnification described in subsection (b)(1) and (b)(2).
(d) Restrictions on indemnification. The County may not indemnify a fiduciary with respect to an action or proceeding in which the fiduciary was held liable for gross negligence or willful misconduct in the performance of the fiduciary's duty to the System.
(e) Limitation on fiduciary's liability. A fiduciary may not be required to pay amounts attributable to liability that is indemnified as described in this section if the County does not provide insurance coverage as required in § 5-2-407 or otherwise fails to indemnify the fiduciary as required under this section.
(1985 Code, Art. 7, § 2-406) (Bill No. 88-96; Bill No. 90-01)