Any person referred to in Section 1 hereof who has been wholly successful, on the merits or otherwise, in the defense of any suit of proceeding of the character described in Section 1 hereof shall be entitled to indemnification against reasonable expenses incurred by him in connection with the suit or proceeding as of right without any further action or approval by the Board. Except as provided in the immediately preceding sentence, any indemnification under Section 1 next above shall be made at the discretion of the Association, but only if approved (a) by the Board, acting by majority vote of a committee duly designated by the Board (in which designation directors who are parties may participate), consisting solely of two (2) or more directors not at the time parties to the suit or proceeding, which committee shall make the same finding, or (c) by independent special legal counsel selected by the Board or its committee in the manner prescribed in (a) or (b) above, or its selection cannot be made in such a manner then selected by majority vote of the full Board (in which selection directors who are parties may participate), which counsel shall deliver to the Association their written opinion that indemnification is proper in the circumstances because such director, officer, employee or agent has met such standard; however, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled to select independent special legal counsel under this Article XIV, Section 2(c), or (d) by the Association Members then entitled to vote for the election of directors which shall determine by majority vote that such person has met such standard, but directors, officers, employees or agents of the Association who are at the time parties to the suit or proceeding may not vote on the determination.
