(a) Directors and officers occupy a fiduciary relationship to the savings bank of which they are directors or officers, and a director or officer shall not engage or participate, directly or indirectly, in any business or transaction conducted on behalf of or involving the savings bank that would result in a conflict of their own personal interests with those of the savings bank which they serve, unless: (i) the business or transactions are conducted in good faith and are honest, fair, and reasonable to the savings bank; (ii) a full disclosure of the business or transaction and the nature of the director’s or officer’s interest is made to the board of directors; and (iii) the business or transaction is approved in good faith by the board of directors with any interested director abstaining. The approval of the business or transaction shall be recorded in the minutes. Any profits inuring to the officer or director shall not be at the expense of the savings bank. The business or transaction shall not represent a breach of the officer’s or director’s fiduciary duty and shall not be fraudulent or illegal. Notwithstanding any other provisions of this Section, the Commissioner may require the disclosure by directors, officers, and employees of their personal interest, directly or indirectly, in any business or transaction on behalf of or involving the savings bank and of their control of or active participation in enterprises having activities related to the business of the savings bank. The following restrictions governing the conduct of directors and officers expressly are specified, but that specification does not excuse those persons from the observance of any other aspect of the general fiduciary duty owed by them to the savings bank which they serve:
        (1) An officer or director of a mutual savings bank
    
shall not hold office or status as a director or officer of another mutual savings bank subject to this Act.
        (2) A director shall receive as remuneration only
    
reasonable fees for services as a director or for service as a member of a committee of directors. A director who is also an officer or employee of the savings bank may receive compensation for service as an officer or employee.
        (3) A director or officer shall not have any
    
interest, direct or indirect, in the purchase at less than its face value of any evidence of a savings account, deposit, or other indebtedness issued by the savings bank.
        (4) A savings bank or director or officer thereof
    
shall not directly or indirectly require, as a condition to the granting of any loan or the extension of any other service by the savings bank or its affiliates that the borrower or any other person undertake a contract of insurance or any other agreement or understanding with respect to the direct or indirect furnishing of any other goods or services with any specific company, agency, or individual.
        (5) An officer or director acting as proxy for a
    
member of a mutual savings bank shall not exercise, transfer, or delegate that right in any consideration of a private benefit or advantage, direct or indirect, accruing to himself nor surrender control or pass his office to any other for any consideration of a private benefit or advantage, direct or indirect. The voting rights of members shall not be the subject of sale or similar transaction, either directly or indirectly. Any officer or director who violates the provisions of this subsection shall be held accountable to the savings bank for any increment.
        (6) A director or officer shall not solicit, accept,
    
or agree to accept, directly or indirectly, from any person other than the savings bank any gratuity, compensation, or other personal benefit for any action taken by the savings bank or for endeavoring to procure any action by the savings bank.
        (7) Subject to the approval of the Commissioner, a
    
savings bank’s bylaws may provide for reasonable indemnification to its officers, directors, and employees in connection with the faithful performance of their duties for the savings bank. The Commissioner may promulgate model indemnification provisions and may consider provisions available under the Business Corporation Act of 1983, the Illinois Banking Act, and those available to national banks.
    (b) The bylaws of a savings bank may contain a provision providing that a director is not personally liable to the savings bank or its shareholders for monetary damages for a breach of the director’s fiduciary duty; provided, however, that such provision may not eliminate or limit the liability of a director for any of the following:
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Terms Used In Illinois Compiled Statutes 205 ILCS 205/4010

  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Fiduciary: A trustee, executor, or administrator.
  • Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
  • individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See Illinois Compiled Statutes 5 ILCS 70/1.36

        (1) An act or omission that is grossly negligent.
        (2) A breach of the director’s duty of loyalty to the
    
savings bank or its shareholders.
        (3) Acts or omissions not in good faith or that
    
involve intentional misconduct or a knowing violation of law.
        (4) A transaction from which the director derived an
    
improper personal benefit.
        (5) An act or omission occurring before the effective
    
date of the provision in the bylaws authorized by this subsection.
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