§ 645. Limited liability. 1. As used in this section, the term
"employee" shall mean the members of the board, president, officers,
employees, or a former employee, his or her estate or judicially
appointed personal representative.

2. Neither the members of the board nor any officers or employee of
the trust acting on behalf thereof, while acting within the scope of
such person's authority, shall be subject to any liability resulting
from carrying out any of the powers expressly given in this article.

3. At the request of the employee, and upon compliance by the employee
with the provisions of this section, the trust shall provide for the
defense of an employee in any civil action or proceeding in any state or
federal court, arising out of any alleged act or omission which the
trust finds occurred while the employee was acting within the scope of
his or her public employment and in the discharge of his or her public
duties and was not in violation of any rule or regulation of the trust
at the time the alleged act or omission occurred. This duty to provide
for a defense and indemnification shall not arise where such civil
action or proceeding is brought by or on behalf of the trust against the
employee.

4. The trust shall indemnify and hold harmless its employees in the
amount of any civil judgment obtained against such employees in any
state or federal court, or in the amount of any settlement of a claim
approved by the trust provided that the act or omission from which such
judgment or settlement arose occurred while the employee was acting
within the scope of his or her public employment and in the discharge of
his or her public duties and was not in violation of any rule or
regulation of the trust at the time the alleged damages were sustained.
The duty to indemnify and hold harmless prescribed by this section shall
not arise where the injury or damage resulted from an intentional
wrongdoing, or recklessness on the part of the employee. Nothing in this
section shall authorize the trust to indemnify or hold harmless an
employee with respect to punitive or exemplary damages, fines or
penalties.

5. The duty to defend and indemnify and hold harmless prescribed by
this section shall be conditioned upon (a) delivery by the employee to
the president or general counsel of the trust at the office of the trust
of the original or a copy of any summons, complaint, claim, process,
notice, demand or pleading within ten days after the employee is served
with such document, and (b) the full cooperation of the employee in the
defense of such action or proceeding and in defense of any action or
proceeding against the trust based upon the same act or omission, and in
the prosecution of any appeal. Such delivery shall be deemed a request
by the employee that the trust provide for his or her defense pursuant
to this section. In the event that the trust shall assume an employee's
defense and thereafter the employee fails or refuses to cooperate in the
formation or presentation of his or her defense, the court shall permit
the trust to withdraw its representation ten days after giving written
notice to the employee of its intention to discontinue such
representation.

6. In the event that the act or omission upon which the court
proceeding against the employee is based was or is also the basis of a
disciplinary proceeding by the trust against the employee,
representation and indemnification by the trust, as set forth in this
section, may be withheld (a) until such disciplinary proceeding has been
resolved, and (b) unless the resolution of the disciplinary proceeding
exonerated the employee as to such act or omission.

7. Subject to the conditions set forth in this section, such employee
shall be entitled to representation by the general counsel of the trust
or by any attorney or attorneys designated by the general counsel,
provided, however, that the employee shall be entitled to be represented
by private counsel of his or her choice in any civil action or
proceeding whenever the trust determines that representation would be
inappropriate, or whenever a court, upon appropriate motion or otherwise
by a special proceeding, determines that a conflict of interest exists
and that the employee is entitled to be represented by private counsel
of the employee's choice. The general counsel of the trust shall notify
the employee in writing of such determination that the employee is
entitled to be represented by private counsel. Provided, however, that
the trust may require, as a condition to payment of the fees and
expenses of such representation, that appropriate groups of such
employees be represented by the same counsel. Reasonable attorneys' fees
and litigation expenses shall be paid by the trust to such private
counsel from time to time during the pendency of a civil action or
proceeding.

8. Any dispute with respect to representation of multiple employees by
a single counsel or the reasonableness of attorneys' fees or the amount
of litigation expenses shall be resolved by the court upon motion or by
way of a special proceeding.

9. The benefits of this section shall inure only to employees as
defined in this section and shall not enlarge or diminish the rights of
any other party nor shall any provision of this section be construed to
affect, alter or repeal any provision of the workers' compensation law.

10. The provisions of this section shall not be construed in any way
to impair, alter, limit or modify the rights and obligations of any
insurer under any policy of insurance.

11. Except as otherwise specifically provided in this section, the
provisions of this section shall not be construed in any way to impair,
alter, limit, modify, abrogate or restrict any immunity available to or
conferred upon any unit, entity, member, officer or employee of the
trust, or any right to defense or indemnification provided for any
member, officer or employee by, in accordance with, or by reason of, any
other provision of state, federal or local law or common law.

12. Every action or proceeding instituted pursuant to the provisions
of this section shall be commenced pursuant to section six hundred
forty-one of this article, and subject to any condition or limitation
set forth in such section.

13. The provisions of this section shall apply to the actions and
proceedings set forth herein notwithstanding any inconsistent provisions
of state or local law.