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An employee or official of the city, against whom a claim is made or a proceeding threatened or brought by reason of being or having been an employee or official of the city, may be indemnified against:

A. Reasonable expenses incurred in defending against the claim including legal fees; and

B. Liabilities imposed on the official or employee by reason of the claim, including any amount paid in settlement in order to satisfy a judgement or order. [Ord. 94-26 § 2.]