§ 2-416. Financial assistance to officers and employees

   (a) When assistance permitted. -- 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:

   (1) In the judgment of the directors, reasonably may be expected to benefit the corporation; or

   (2) Is an advance made against indemnification in accordance with § 2-418(f) of this subtitle.

(b) Scope of assistance. -- The loan, guarantee, or other assistance may be:

   (1) With or without interest;

   (2) Unsecured; or

   (3) Secured in any manner that the board of directors approves, including a pledge of the stock of the corporation.

HISTORY: An. Code 1957, art. 23, § 62; 1975, ch. 311, § 2; 1976, ch. 567, § 1, 4.