The governing body of a municipality shall provide its municipal clerk with necessary means for the defense of any action or legal proceeding arising out of and directly related to the clerk's lawful exercise of authority in the furtherance of official duties, except for:
If any such disciplinary or criminal proceeding shall be dismissed or finally determined in favor of the municipal clerk, the municipality shall reimburse the municipal clerk for the reasonable costs of the defense. Where the costs of defense are based on the same hourly rate authorized by the municipality for services rendered to it by the municipal attorney, there shall be a presumption that the hourly rate is reasonable.
N.J.S. § 40A:9-134.1