55600.00206\42114283.6
BYLAWS
OF
[THE CITY OF SAN BERNARDINO FOUNDATION FOR
COMMUNITY & ECONOMIC GROWTH]
A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION
55600.00206\42114283.6
TABLE OF CONTENTS
Page
i
ARTICLE 1 NAME ................................ ................................ ................................ ................... 1
1.1 Corporate Name................................ ................................ ............................... 1 ARTICLE 2 OFFICES ................................ ................................ ................................ ............... 1
2.1 Principal Office ................................ ................................ ................................ 1
2.2 Other Offices ................................ ................................ ................................ ....1 ARTICLE 3 OBJECTIVES AND PURPOSES ................................ ................................ ..........1
3.1 General Purpose................................ ................................ ............................... 1
3.2 Specific Purpose ................................ ................................ ............................... 1 ARTICLE 4 LIMITATIONS ................................ ................................ ................................ ......1
4.1 Political Activities ................................ ................................ ............................ 1
4.2 Prohibited Activities ................................ ................................ ........................ 2 ARTICLE 5 DEDICATION OF ASSETS ................................ ................................ .................. 2
5.1 Dedication of Assets ................................ ................................ ......................... 2 ARTICLE 6 DIRECTORS ................................ ................................ ................................ .........2
6.1 Powers ................................ ................................ ................................ .............. 2
6.2 Number of Directors ................................ ................................ ........................ 3
6.3 Election and Appointment of Directors; Term of Office. ............................... 3
6.4 Restrictions on Interested Persons as Directors. ................................ ............3
6.5 Ex-Officio Directors ................................ ................................ ......................... 3
6.6 Vacancies. ................................ ................................ ................................ .........3
6.7 Resignation and Removal of Directors. ................................ ........................... 4
6.8 Place of Meeting; Meeting by Telephone or Other
Telecommunications Equipment ................................ ................................ .....4
6.9 Annual Meeting ................................ ................................ ................................ 4
6.10 Special Meetings................................ ................................ ............................... 4
6.11 Notice of Meetings ................................ ................................ ............................ 4
6.12 Waiver of Notice ................................ ................................ .............................. 4
6.13 Quorum ................................ ................................ ................................ ............5
6.14 Adjournment ................................ ................................ ................................ ....5 55600.00206\42114283.6
TABLE OF CONTENTS
(continued)
Page
ii
6.15 Notice of Adjournment ................................ ................................ .................... 5
6.16 Compensation of Directors ................................ ................................ .............. 5 ARTICLE 7 COMMITTEES ................................ ................................ ................................ .....5
7.1 Committees of Directors ................................ ................................ .................. 5
7.2 Executive Committee ................................ ................................ ....................... 5
7.3 Audit Committee ................................ ................................ .............................. 6
7.4 Meeting and Action of Committees ................................ ................................ .6 ARTICLE 8 OFFICERS ................................ ................................ ................................ ............6
8.1 Officers ................................ ................................ ................................ ............. 6
8.2 Election of Officers ................................ ................................ .......................... 6
8.3 Subordinate Officers ................................ ................................ ........................ 6
8.4 Removal of Officers ................................ ................................ ......................... 6
8.5 Resignation of Officers ................................ ................................ .................... 6
8.6 Vacancies in Office ................................ ................................ ........................... 7
8.7 Responsibilities of Officers ................................ ................................ .............. 7 ARTICLE 9 RECORDS AND REPORTS................................ ................................ .................. 8
9.1 Maintenance of Articles and Bylaws ................................ ............................... 8
9.2 Maintenance of Other Corporate Records ................................ ..................... 8
9.3 Inspection by Directors ................................ ................................ .................... 8
9.4 Annual Report................................ ................................ ................................ ..8
9.5 Financial Audit ................................ ................................ ................................ 9 ARTICLE 10 INDEMNIFICATION OF DIRECTORS AND OFFICERS ................................ .9
10.1 Right to Indemnification ................................ ................................ .................. 9
10.2 Insurance ................................ ................................ ................................ ........ 10 ARTICLE 11 CONTRACTS AND LOANS WITH DIRECTORS AND OFFICERS ............... 10
11.1 Contracts with Directors and Officers ................................ .......................... 10
11.2 Loans to Directors and Officers ................................ ................................ .... 10 ARTICLE 12 FISCAL YEAR ................................ ................................ ................................ .. 10
12.1 Fiscal Year................................ ................................ ................................ ...... 10 ARTICLE 13 AMENDMENTS ................................ ................................ ............................... 10 55600.00206\42114283.6
TABLE OF CONTENTS
(continued)
Page
iii
13.1 Amendments ................................ ................................ ................................ .. 10 ARTICLE 14 MEMBERS ................................ ................................ ................................ ........ 10
14.1 Members ................................ ................................ ................................ ......... 10 ARTICLE 15 CONFLICT OF INTEREST/SELF-DEALING ................................ .................. 10
15.1 Conflict of Interest. ................................ ................................ ........................ 11
15.2 Self-Dealing ................................ ................................ ................................ .... 11 ARTICLE 16 EMERGENCY PROVISIONS ................................ ................................ ........... 11
16.1 Emergency ................................ ................................ ................................ ...... 11 ARTICLE 17 CONSTRUCTION AND DEFINITIONS ................................ ........................... 12
17.1 Construction and Definitions ................................ ................................ ......... 12
17.2 Electronic Transmission ................................ ................................ ................ 12 55600.00206\42114283.6
1 BYLAWS
OF
[THE CITY OF SAN BERNARDINO FOUNDATION FOR COMMUNITY &
ECONOMIC GROWTH]
A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION
ARTICLE 1
NAME
1.1 Corporate Name. The name of the corporation is [The City of San Bernardino Foundation for Community & Economic Growth] (the “Corporation”).
ARTICLE 2
OFFICES
2.1 Principal Office. The principal office for the transaction of the business of the Corporation shall be 290 North D Street, 3rd Floor, San Bernardino, CA 92401, or may be relocated to any place or places within or outside the State of California by resolution of the Board of Directors of the Corporation (the “Board”).
2.2 Other Offices. The Board may at any time establish branch offices, either within or outside the State of California where the Corporation is qualified to transact business, in order to advance the general and specific purposes of the Corporation.
ARTICLE 3
OBJECTIVES AND PURPOSES
3.1 General Purpose. The Corporation is a Nonprofit Public Benefit Corporation and is not organized for the private gain of any person. It is organized under the California Nonprofit Corporation Law for public purposes. The Corporation is organized exclusively for educational purposes under Section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code.
3.2 Specific Purpose . The specific purpose of the Corporation is to (i) develop a business and visitor center in the City of San Bernardino (the “City”) in the State of California; (ii) promote and expand businesses in the City ; and (ii) provide information and resources to businesses and visitors to the City.
ARTICLE 4
LIMITATIONS
4.1 Political Activities . The Corporation has been formed under the California Nonprofit Corporation Law for the public purposes described in Article 3, and it shall be nonprofit and nonpartisan. No substantial part of the activities of the Corporation will consist of carrying on propaganda, or otherwise attempting to influence legislation, and the Corporation will not participate in or intervene in any political campaign (including the publishing or distribution of statements) on behalf of, or in opposition to, any candidate for public office. 55600.00206\42114283.6
2 4.2 Prohibited Activities . The Corporation may not, except in any insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the purposes described in Article 3. The Corporation may not carry on any activity for the profit of its Officers (as defined in Section 8.1), Directors (as defined in Section 6.1(b)) or other private persons or distribute any gains, profits or dividends to its Officers, Directors or other persons as such.
Furthermore, nothing in Article 3 may be construed as allowing the Corporation to engage in any activity not permitted to be carried on (i) by a corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “ Code”) or (ii) by a corporation, contributions to which are deductible under Section 170(c)(2) of the Code.
ARTICLE 5
DEDICATION OF ASSETS
5.1 Dedication of Assets. The properties and assets of the Corporation are irrevocably dedicated to public benefit and/or charitable purposes. No part of the net earning s, properties, or assets of the Corporation, on dissolution or otherwise, may inure to the benefit of any private person or individual, or any Director or Officer of the Corporation. On liquidation or dissolution, all properties and assets remaining after payment, or provision for payment, of all debts an d liabilities of the Corporation shall be distributed to the City or to a nonprofit fund, foundation, or corporation which is organized and operated exclusively for charitable purposes and which has established its exempt status under Section 501(c)(3) of the Code.
ARTICLE 6
DIRECTORS
6.1 Powers
(a) General Corporate Powers . The business and affairs of the Corporation shall be managed, and all corporate powers shall be exercised, by or under the direction of the Board. (b) Specific Powers . Without prejudice to their general powers, the directors (“Directors”) shall have the power to:
(i) Appoint and remove at the pleasure amd discretion of the Board all of the Corporation’s O fficers, agents and employees; prescribe powers and duties for them that are consistent with law, with the Articles of Incorporation and with the Bylaws; fix their compensation (if any); and, require from them security for faithful performance of their duties. (ii) Change the principal executive office or the principal business office of the Corporation from one location to another.
(iii) Adopt, make, and use a corporate seal and alter the form of the seal. (iv) Conduct, manage, and control the affairs of the Corporation, and make rules and regulations not inconsistent with law, the Articles of Incorporation, or the Bylaws; (v) Approve or ratify approval of contracts in the amount of $________ or more in the name of the Corporation;
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3 (vi) Bring or defend any action at law or in equity on behalf of the Corporation; and
(vii) Borrow money and incur indebtedness on behalf of the Corporation and cause to be executed and delivered for the Corporation’s purposes, in the Corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations, and other evidences of debt.
6.2 Number of Directors. The number of Directors shall be not less than nine (9) nor more than thirteen (13) until changed by amendment to the Bylaws provided that any amendment which reduces the number of Directors shall not have the effect of terminating the unexpired term of any Director. The exact number of Directors shall be fixed, within those limits, by a resolution adopted by the Board.
6.3 Election and Appointment of Directors; Term of Office. The initial Directors of the Corporation shall be appointed by the City. Except for the Ex-Officio Directors (defined below) the term of office for each Director shall be one (1) year, with a maximum of six (6) consecutive one (1)-year terms. Appointment as a Director to fill a vancay of an unexpired term shall not count as the first one (1) -year term. Each Director shall be elected at the Annual M eeting or any other scheduled meeting of the Board by a majority of Directors then in office. Each Director, including a Director elected or appointed to fill a vacancy or elected or appointed at a special meeting or by written ballot or appointment, shall hold office until expiration of the term for which elected.
6.4 Restrictions on Interested Persons as Directors. No more than forty-nine percent (49%) of the persons serving on the Board may be Interested Persons. An “Interested Person” is (a) any person compensated by the Corporation for services rendered to it within the previous twelve (12) months, whether as a full -time or part -time employee, independent contractor or otherwise, excluding any reasonable compensation paid to a Directo r for his/her service as Director; and (b) any sibling, ancestor, descendant, spous e, brother-in-law, sister-in-law, son-in- law, daughter-in-law, mother-in-law, or father-in-law of such person. However, any violation of the provisions of this paragraph shall not affect the validity or enforceability of any transaction entered into by the Corporation.
6.5 Ex-Officio Directors . The City’s then-named Economic Development Director and Finance and Management Services Director shall serve as ex -officio directors of the Corporation (“Ex-Officio Directors”), for a term concurrent with the ir appointment as Directors of their respective departments. The Ex-Officio Directors will have all the rights of any D irector of the Corporation, including the right to vote on any matter, unless otherwise provided in t he Bylaws. The Chairperson of the Board shall be selected by a majority vote of the Directors.
6.6 Vacancies. A vacancy or vacancies on the Board shall exist upon the occurrence of the following:
(a) The death, disqualification, resignation, suspension, expulsion or termination of any Director;
(b) The declaration by the resolution of the Board of a vacancy in the office of the Director who has been declared of unsound mind by an order of court, convicted of a felony, or 55600.00206\42114283.6
4 found by final order or judgment of any court to have breached a duty under Article 3 (commencing with Section 5230) of the California Corporations Code; (c) Upon resignation or removal of any Director or Directors pursuant to Section 6.7, below;
(d) An increase in the authorized number of Directors. No reduction of the authorized number of Directors shall have the effect of removing any Director before that Director’s term of office expires.
6.7 Resignation and Removal of Directors. Except as provided herein, any Director may resign by giving written notice to the Chairperson of the Board or the Secretary. The resignation shall be effective when the notice is given unless it specifies a later time for the resignation to become effective. If a Director’s resignation becomes effective at a later time, the Board may elect a successor to take office as of the date when the resignation becomes effective .
Any or all Directors may be removed with or wit hout cause if such removal is approved by a majority of the Directors then in office.
6.8 Place of Meeting; Meeting by Telephone or Other Telecommunications Equipment. Regular meetings of the Board may be held at any place within the City. In the absence of such designation, regular meetings shall be held at the principal office of the Corporation. Special meetings of the Board shall be held at any place within the City. The place of meetings and the use of telecommunication equipment for conducting meetings shall be governed by California Government Code Section 54950 et. seq. (the “Brown Act”).
6.9 Annual Meeting . The Board shall hold a meeting annually (the “ Annual Meeting”) at a time and place designated by the Board for purposes of electing O fficers, designating committees, and transacting regular business. Notice of these meetings shall be in accordance with Section 6.11.
6.10 Special Meetings. Special meetings of the Board for any purpose may be called in accordance with Section 6.11.
6.11 Notice of Meetings . Notice of any meeting of the Board shall be given in accordance with the notice and agenda posting requirements set forth in the Brown Act as the same apply to the calling of regular and special meetings of the Board.
6.12 Waiver of Notice. The transactions of any meeting of the Board, however called and noticed and wherever held, shall be as valid as though taken at a meeting duly held after regular call and notice if (a) a quorum is present and (b) either before or after the meeting, each of the Directors not present signs a written waiver of notice, a consent to holding of the meeting, or an approval of the minutes. The waiver of notice or consent need not specify the purpose of the meeting. All waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of a meeting shall also be deemed given to any Director who attends the meeting without protesting before or at its commencement about lack of adequate notice.
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5 6.13 Quorum. A majority of the Board shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 6.14. Every act or decision done or made by a majority of the Board shall be regarded as the act of the Board, subject to the provisions of the California Nonprofit Corporation Law.
6.14 Adjournment. A meeting may be adjourned in accordance with the provisions of the Brown Act.
6.15 Notice of Adjournment . Notice of the time and place of holding an adjourned meeting shall be in accordance with the provisions of the Brown Act.
6.16 Compensation of Directors . The Board may authorize the reimbursement of actual reasonable expenses incurred by a Director or member of a committee in carrying out their duties. Directors may not otherwise be compensated.
ARTICLE 7
COMMITTEES
7.1 Committees of Directors. The Board may, by resolution adopted by a majority of the Directors then in office, designate one (1) or more committees consisting of two (2) or more Directors, to serve at the sole direction of the Board. Any member of any committee may be removed, with or without cause, at any time by the Board. Any committee, to the extent provided in the resolution of the Board, shall have all or a portion of the authority of the Board, except that no committee, regardless of the Board resolution, may:
(a) Fill vacancies on the Board or on any committee;
(b) Amend or repeal the Articles of Incorporation or Bylaws or adopt new Bylaws; (c) Amend or repeal any resolution of the Board;
(d) Designate any other committee of the Board or appoint the members of any committee; and
(e) Approve any transaction (i) to which the Corporation is a party and as to which one (1) or more Directors has a material financial interest, or (ii) between the Corporation and one (1) or more of its Directors or between the Corporation and any corporation or firm in which one (1) or more of its Directors has a material financial interest.
7.2 Executive Committee. The Board may appoint two (2) or more Directors and the Chairperson of the Board of the Corporation, to serve as the Executive Committee of the Board.
The Chair person of the Board shall serve as chair person of the Executive Committee. The Executive Committee, unless limited by a resolution of the Board, shall have and may exercise all the authority of the Board in the management of the business and affairs of the Corporation between meetings of the Board; pr ovided, however, that the Executive Committee does not have the authority of the Board in reference to those matters enumerated in Section 7.1. 55600.00206\42114283.6
6 7.3 Audit Committee. At all times that the Corporation is required by applicable law to have an independent audit, or at any time the Corporation voluntarily chooses to do so, the Corporation shall have an Audit Committee consisting of at least two (2) Directors and which may include non -voting advisors. Directors who are employees of the Corporation or who receive, directly or indirectly, any consulting, advisory, or other compensatory fees from the Corporation (other than for service as Director) may not serve on the Audit Committee. The President and Treasurer, if also Directors, may serve on the Audit Committee only if such persons are volunteers and are not compensated by the Corporation. The Audit Committee shall perform the duties and adhere to the guidelines set forth from time to time by the Board. These duties include, but are not limited to: (i) assisting the Board in choosing an independent auditor and recommending termination of the auditor, if necessary, (ii) negotiating the auditor’s compensation, (iii) conferring with the auditor regarding the Corporation’s financial affairs, and (iv) reviewing and accepting or rejecting the audit. Members of the Audit Committee may not receive compensation for their service on the Audit Committee in excess of that provided to Directors for their service on the Board. If the Corporation has a Finance Committee, a majority of the members of the Audit Committee may not concurrently serv e as members of the Finance Committee, and the Chair of the Audit Committee may not serve on the Finance Committee.
7.4 Meeting and Action of Committees . The Board may adopt rules for any committee not inconsistent with the provisions of the Bylaws.
ARTICLE 8
OFFICERS
8.1 Officers. The Corporation shall have the following officers (“ Officers”):
President, Secretary, and Treasurer or Chief Financial Officer, and such other Officers as the Board may designate by resolution a nd appoint pursuant to Section 8.3. Officers need not be Directors.
One (1) person may hold two (2) or more offices, except no person serving as Secretary, Treasurer, or Chief Financial Officer may serve concurrently as President or Chairperson of the Board.
8.2 Election of Officers. The Officers of the Corporation, except those appointed in accordance with the provisions of Section 8.3 of the Bylaws, shall be chosen by the Board, and each shall serve at the sole direction of the Board, subject to the rights, if any, of any Officer under a contract of employment.
8.3 Subordinate Officers. The Board may appoint, and may authorize the President or any other Officer to appoint, any other Officers that the business of the Corporation may require, each of whom shall have the title, hold office for the period, have the authority, and perform the duties specified by the Bylaws or determined from time to time by the Board.
8.4 Removal of Officers. Subject to rights, if any, under any contract of employment, any Officer may be removed, with or without cause, by the Board, at any regular or special meeting of the Board, or, except in the case of an Officer chosen by the Board, by an Officer on whom such power of removal has been conferred by the Board.
8.5 Resignation of Officers . Any Officer may resign at any time by giving written notice to the Board, the President, or the Secretary of the Corporation. Any resignation shall take 55600.00206\42114283.6
7 effect at the date of receipt of that notice or at any later time specified in that notice. Unless otherwise specified in that notice, the acceptance of the resignation is not necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the Corporation under any contract to which the Officer is a party.
8.6 Vacancies in Office . A vacancy in any Office because of death, resignation, removal, disqualification, or any other cause shall be filled only i n the manner prescribed in the Bylaws for regular appointments to that Office.
8.7 Responsibilities of Officers
(a) President. The President shall be the chief executive officer of the Corporation and shall have such other powers and duties as may be prescribed by the Board or the Bylaws. The President shall be responsible to the Board, shall see that the Board is advised on all significant matters of the Corporation’s business, and shall see that all orders and resolutions of the Board are carried into effect. The President shall be empowered to act, speak for, or otherwise represent t he Corporation between meetings of the Board within the boundaries of policies and purposes established by the Board and as set forth in the Art icles of Incorporation and the Bylaws. The President shall be responsible for keeping the Board informed at all times of staff performance as related to program objectives, and for implementing any personnel policies adopted by the Board. (b) Vice President. In the absence or disability of the President, the Vice President, if any, shall perform all duties of the President, and when so acting shall have all of the powers of, and be subject to all of the res trictions upon, the President. The Vice President shall have such other powers as may be prescribed, from time to time, by the Board or the Bylaws, and the President, or Chairperson of the Board, if any.
(c) Secretary. The Secretary shall attend to the following:
(i) Book of Minutes . The Secretary shall keep or cause to be kept, at the principal executive office or such other place as the Board may direct, a book of minutes of all meetings and actions of Directors and committees of Directors, with the time and place of holding regular and special meetings, and if special, how authorized, the notice given, the names of those present at such meetings, and the proceedings of such meetings. (ii) Notices and Other Duties . The Secretary shall give, or cause to be given, notice of all meetings of the Board required by the Bylaws to be given. The Secretary shall have such other powers and perform such other duties as may be prescribed by the Board or the Bylaws. (d) Treasurer. The Treasurer shall be the chief financial officer of the Corporation and shall attend to the following:
(i) Books of Account . The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, and other matters customarily included in financial statements. The books of account shall be open to inspection by any Director at all reasonable times.
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8 (ii) Deposit and Disbursement of Money and Valuables . The Treasurer shall:
deposit all money and other valuables in the name and to the credit of the Corporation with such depositors as may be designated by the Board; disburse funds of the Corporation as may be ordered by the Board; render to the President and Directors, whenever they request it, an account of all financial transactions and of the financial condition of the Corporation; and have other powers and perform such other duties as may be prescribed by the Board or the Bylaws. (iii) Bond. If required by the Board, the Treasurer shall give the Corporation a bond in the amount and with the surety specified by the Board for the faithful performance of the duties of the office and for restoration to the Corporation of all its books, papers, vouchers, money, and other property of every kind in their possession or under their control on their death, resignation, retirement, or removal from office.
ARTICLE 9
RECORDS AND REPORTS
9.1 Maintenance of Articles and Bylaws. The Corporation shall keep at its principal executive office the original or a copy of its Articles of Incorporation and the Bylaws as amended to date.
9.2 Maintenance of Other Corporate Records. The accounting books, records, and minutes of the proceedings of the Board and any committee(s) of the Board shall be kept at such place or places designated by the Board, or, in the absence of such designation, at the principal executive office of the Corporation. The minutes shall be kept in written or typed form, and the accounting books and records shall be kept in either written or typed form or in any other form capable of being converted into written, typed, or printed form.
9.3 Inspection by Directors . Every Director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the Corporation and each of its subsidiary corporations. This inspection by a Director may be made in person or by an agent or attorney, and the right of inspection includes the right to copy and make extracts of documents.
9.4 Annual Report . Within one hundred twenty ( 120) days after the end of the Corporation’s fiscal year, the President shall furnish or cause to be furnished a written report to all directors containing the following information:
(a) The assets and liabilities of the Corporation as of the end of the fiscal year; (b) The principal changes in assets and liabilities during the fiscal year; (c) The revenue or receipts of the Corporation, both unrestricted and restricted for particular purposes, for the fiscal year;
(d) The expenses or disbursements of the Corporation, for both general and restricted purposes, during the fiscal year;
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9 (e) Any transaction during the previous fiscal year involving more than fifty thousand dollars ($50,000) in which the Corporation (or its parent or subsidiaries, if any) was a party and in which any Director or Officer of the Corporation has a direct or indirect financial interest, or any of a number of such transactions in which the same person had a direct or indirect financial interest and which transactions in the aggregate involved more than fifty thousand dollars ($50,000); and (f) The amount and circumstances of any indemnifications or advances aggregating more than ten thousand dollars ($10,000) paid during the fiscal year to any Director or Officer of the Corporation pursuant to Article 10 of the Bylaws, unless such indemnification has already been approved pursuant to Section 10.1.
For each transaction, the report must disclose the names of the Interested P ersons involved in such transaction and state such person’s relationship to the Corporation, the nature of such person’s interest in the transaction and, where practicable, the value of such interest.
The report shall be accompanied by any report of independent accountants or, if there is no such report, by the certificate of an authorized officer of the Corporation that such statements were prepared without an audit fr om the books and records of the Corporation. Such report may be furnished to the D irectors by electronic transmissi on in accordance with Section
17.2 of the Bylaws.
9.5 Financial Audit. The Corporation shall obtain a financial audit for any tax year in which it receives or accrues gross revenue of two million dollars ($2,000,000) or more, excluding grant or contract income from any governmental entity for which the governmental entity requires an accounting. Any audited financial statements obtained by the Corporation, whether or not required by law, shall be made available for inspection by the Attorney General and by the general public within nine (9) months after the close of the fiscal year to which the statements relate. For three (3) years, such statements shall be made available (a) at the Corporation’s principal, regional, and district offices during regular business hours, and (b) either by mailing a copy to any person who so requests in person or in writing, or by posting them on the Corporation’s website.
ARTICLE 10
INDEMNIFICATION OF DIRECTORS AND OFFICERS
10.1 Right to Indemnification. The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any action or proceeding by reason of the fact that such person is or was an Officer, Director, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, o fficer, employee, or agent of another foreign or domestic corporation, partnership, joint venture, or other enterprise, against expenses, judgments, fines, settlements, and other amounts actually and reasona bly incurred in connection with such proceeding, to the fullest extent permitted under the California Nonprofit Corporation Law.
In determining whether indemnification is available to the Dir ector, Officer, or agent of the Corporation under California law, the determination as to whether the applicable standard of conduct set forth in Section 5238 of California Corporations Code has been met shall be made by a majority vote of a quorum of Directors who are not parties to the proceeding. If the number of Directors who are not parties to the proceeding is less than two-thirds (2/3) of the total 55600.00206\42114283.6
10 number of Directors seated at the time the determination is to be made, the determination as to whether the applicable standard of conduct has been met shall be made by the court in which the proceeding is or was pending.
The indemnification provided herein is not deemed exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be an agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
10.2 Insurance. The Corporation has the power and shall use its best efforts to purchase and maintain insurance on behalf of any Director, Officer, or agent of the Corporation, against any liability asserted against or incurred by the Director, Officer, or agent in any such capacity or arising out of the Director’s, Officer’s, or agent’s statu s as such, whether or not the Corporation would have the power to indemnify the agent agains t such liability under Section 10 .1 of the Bylaws; provided, however, that the Corporati on has no power to purchase and maintain such insurance to indemnify any Director, Officer, or agent of the Corporation for any self -dealing transaction, as described in Section 5233 of California Corporations Code.
ARTICLE 11
CONTRACTS AND LOANS WITH DIRECTORS AND OFFICERS
11.1 Contracts with Directors and Officers . No Director or Officer of the Corporation, nor any other corporation, firm, association, or other entity in which one (1) or more of the Corporation’s Directors or Officers are directors or have a material financial interest, may be interested, directly or indirectly, in any contract or other transaction with the Corporation.
11.2 Loans to Directors and Officers . The Corporation may not make any loan of money or property to or guarantee the obligation of any Director or Officer.
ARTICLE 12
FISCAL YEAR
12.1 Fiscal Year. The fiscal year of the Corporation shall end on December 31.
ARTICLE 13
AMENDMENTS
13.1 Amendments. The Bylaws may be adopted, amended, or repealed by a majority vote of the entire Board; provided, however, that amendment or repeal of Section 6.2 or this Article 13 shall require the unanimous approval of the Board.
ARTICLE 14
MEMBERS
14.1 Members. The Corporation may not have voting members within the meaning of the California Nonprofit Corporation Law.
ARTICLE 15
CONFLICT OF INTEREST/SELF-DEALING
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11 15.1 Conflict of InterestThe Board shall adopt and adhere to the Conflict of Interest and Ethics Policy adopted by the Board and attached hereto as Exhibit A (the “Conflict of Interest Policy”).Self-Dealing. Prior to conducting a business session at a meeting of the Board, Board members shall disclose and discuss their individual conflicts or potential conflicts and that of other members of the Board. Actual conflicts shall be subject to applicable federal and state laws. In the exercise of voting rights by members of the Board, no individual shall vote on any issue, motion, or resolution which directly or indirectly inures to his or her benefit financially or with respect to which he or she has any other c onflict of interest Board members shall adhere to the Conflict of Interest Policy enacted pursuant to Section 15.1 of the Bylaws.
ARTICLE 16
EMERGENCY PROVISIONS
16.1 Emergency. The emergency provisions of this Section are adopted in accordance with Section 5151(g) of California Corporations Code. Notwithstanding anything to the contrary herein, this Section applies solely during an emergency, which is the limited period of time during which a quorum cannot be readily convened for action as a result of the following events or circumstances until the event or circumstance has subsided or ended and a quorum can be readily convened in accordance with the notice and quorum requirements in Sections 6.11 and 6.13 of the Bylaws:
(a) A natural catastrophe, including, but not limited to, a hurricane, tornado, storm, high water, wind -driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought, or regardless of cause, any fire, flood, or explosion; (b) An attack on the State of California or nation by an enemy of the United States of America, or on receipt by the State of California of a warning from the federal government indicating that an enemy attack is probable or imminent; (c) An act of terrorism or other man -made disaster that results in extraordinary levels of casualties or damage or disruption severely affecting the infrastructure, environment, economy, government function, or population, including, but not limited to, mass evacuations; or (d) A state of emergency proclaimed by the governor of the State of California in which one (1) or more Directors are resident, or by the President of the United States.
16.1.1 Emergency Actions. During an emergency, the Board may:
(a) Modify lines of succession to accommodate the incapacity of any Director, Officer, employee, or agent resulting from the emergency;
(b) Relocate the principal office or authorize the Officers to do so; (c) Give notice to a Director or D irectors in any practicable manner under the circumstances, including, but not limited to, by publication and radio, when notice of a meeting of the Board cannot be given to that Director or D irectors in the manner prescribed by Section 6.11 of the Bylaws; and
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12 (d) Deem that one (1) of more O fficers present at a Board meeting is a D irector, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.
During an emergency the B oard may not take any action that is not in the Corporation’s ordinary course of business. Any actions taken in good faith during an emergency under this Section may not be used to impose liability on a Director, Officer, employee, or agent.
ARTICLE 17
CONSTRUCTION AND DEFINITIONS
17.1 Construction and Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the California Nonprofit Corporation Law shall govern the construction of the Bylaws. Without limiting the generality of the above, the masculine gender includes the feminine and neuter, the singular number includes the plural, and the plural number includes the singular.
17.2 Electronic Transmission. Subject to any guidelines and procedures that the Board may adopt from time to time, the terms “written” and “in writing” as used in the Bylaws include any form of recorded message in the English language capable of comprehension by ordinary visual means and may include electronic transmissions, such as fax or email, provided (i) for electronic transmissions from the Corporation, the Corporation has obtained an unrevoked written consent from the recipient to the use of such means of communication; (ii) for electronic transmissions to the Corporation, the Corporation has in effect reasonable measures to verify that the sender is the individu al purporting to have sent such transmission; and (iii) the transmission creates a record that can be retained, retrieved, reviewed, and rendered into clearly legible tangible form.
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13 EXHIBIT A
Conflict of Interest and Ethics Policy
Article I. PURPOSE
Section 1.1. The purpose of this policy is to assure that actual or apparent Conflicts of Interests do not compromise the decision -making processes of [The City of San Bernardino Foundation for Community & Economic Growth] (the “Corporation”), its Board of Directors (the “Board”), or the integrity of the standards set by its Board and committees. This policy shall apply in the following circumstances:
(a) When a Director or committee member has an existing or potential interest which impairs, might impair, or appears to impair, his or her independent judgment in setting policies of the Board or in otherwise exercising his or her fiduciary duty as a Director or committee member;
(b) When a Board or committee member, or an organization with which he or she is affiliated as an officer, agent, employee, or consultant, is contemplating entering into a transaction or arrangement with the Board or which will or could be beneficially impacte d by a policy decision of the Corporation; and
(c) When a Board or committee member, or an organization with which he or she is affiliated as an officer, agent, employee, or consultant, is involved in pending litigation, arbitration, or other formalized dispute resolution process, and the outcome of that process will or could be beneficially impacted by a pending decision involving a standard, or interpretat ion thereof, by the Board or a c ommittee of the Corporation upon which such individual serves as a voting member.
This policy is intended to supplement, but not replace, any applicable state laws governing conflicts of interest applicable to California nonprofit and charitable corporations.
Article II. DEFINITIONS
Section 2.1. Interested Party. Any Director or committee member who has a direct or indirect “Competing Interest” (as defined below) is an Interested Party. A person is “indirectly” a party to a transaction if a party to the transaction is an entity in which the person has a material financial interest or of which the person is an officer, director, employee, consultant or general partner. Status as an “Interested Party” does not automatically give rise to a Conflict of Interest.
Section 2.2. Consultant or Consulting Arrangement. A Board or committee member who is a party to an existing or anticipated arrangement under the terms of which that Board or committee member will serve in an expert or consulting capacity in pending litigation, arbitration, or other formalized dispute resolution process.
Section 2.3. Competing Interest. A Director or committee member has a Competing Interest if he or she has directly or indirectly, personally or through business, investment or family:
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14 (a) An ownership, investment, employment, or other compensation interest in, or with, any entity which will or may be affected by a proposed action of the Board or a committee of the Corporation, provided, however, only if such interest is different from the interests of the Corporation as a whole;
(b) A compensation arrangement with any entity or individual with which the Corporation is contemplating a transaction or arrangement other than a transaction or arrangement which will be offered to all members of the Corporation; or (c) A consulting arrangement with or on behalf of any entity which is, or may be, affected by exercise of the Board or c ommittee’s ordinary responsibilities, including, but not limited to, development of specifications, standards, or the interpretation or application thereof.
A Competing Interest does not automatically give rise to a Conflict of Interest.
Section 2.4. Compensation. Direct and indirect remuneration, as well as gifts or favors that are substantial in nature.
Section 2.5. Conflict of Interest. Any Competing Interest that would impair, or create the appearance of impairing, the independent judgment of the Interested Party.
Article III. PROCEDURES
Section 3.1. Duty to Disclose . In connection with any actual or possible Competing Interest, an Interested Party must disclose the existence and nature of his or her Competing Interest to the Board or committee upon which he or she serves before any discussion or action is taken by the Board or committee in the area of the Competing Interest. The Interested Party must also declare whether he or she considers the Competing Interest to be a Conflict of Interest.
Section 3.2. Content of Disclosure . The Interested Party does not have to disclose confidential details in connection with business plans or policy or relating to disputes in which he or she may be involved in a business or consulting capacity. The Interested Party must only disclose so mu ch of the Competing Interest as will allow his or her fellow Board or committee members and the staff of the Corporation to understand the issues involved.
Section 3.3. Determining Whether a Conflict of Interest Exists. (a) An Interested Party’s declaration that his or her Competing Interest is a Conflict of Interest shall be conclusive for purposes of this policy. In the event an Interested Party does not consider a Competing Interest to be a Conflict of I nterest, such Interested Party may participate fully in setting policies of the Board or in otherwise exercising his or her fiduciary duty as a Director or committee member.
(b) In the event an Interested Party does not consider the Competing Interest to be a Conflict of Interest, or if any Board or committee member has reasonable cause to believe that a Director or committee member is an Interested Party who has failed to disclose a Competing Interest, any disinterested member of the Board or committee upon which the Interested Party 55600.00206\42114283.6
15 serves may refer the issue of whether the Interested Party’s Competing Interest is a “Conflict of Interest” in the manner set forth below.
Section 3.4. Procedures for Addressing the Potential Conflict of Interest. (a) A referral from a Board or committee member shall be made directly to the Chairperson of the Board (or to Executive Committee if the Chairperson of the Board is an Interested Party, or to the remaining members of the Board if both the Chairperson of the Board and members of the Executive Committee are Interested Persons), who shall appoint a three person ad hoc committee from among the disinterested members of the Board to investigate the referral (the “Ad Hoc Committee”).
(b) After exercising due diligence, the Ad Hoc Committee shall determine by majority vote whether the Competing Interest is a Conflict of Interest. (c) If a Conflict of Interest is determined to exist, but no vote or other action has been taken by the affected Board or committee in the area of the Competing Interest, the Interested Party shall abstain from voting on the proposed action, but may join in th e discussion of the proposed action. For purposes of determining whether a quorum of Directors or committee members exists with respect to a vote on a proposed action, any Interested Person whom the Board has determined to have a Conflict of Interest shall be counted even though they shall abstain from voting.
(d) If a Conflict of Interest is determined to exist and a vote or other action has already been taken by the affected Board or commi ttee in the area of the Competing I nterest, the affected Board or committee shall negate any vote tendered by the Interested Party in the area of the Conflict of Interest and shall reconsider de novo any vote or action in the area of the Conflict of Interest. Voting procedure and quorum con siderations shall be conducted in the same manner as contemplated by paragraph (c) above.
Article IV. RECORDS OF PROCEEDINGS
Section 4.1. The minutes of any Board or committee meeting involving discussions of actual or potential Competing Interests or Conflicts of Interest s and the minutes of the Ad Hoc Committee shall contain:
(a) The names of the persons who disclosed or otherwise were found to have a Competing Interest, the nature of the Competing Interest, any action taken to determine whether a Conflict of Interest was present, and the decision as to whether a Conflict of Interest existed. (b) The names of the Directors or committee members who were present for discussions and votes relating to the transaction or arrangement involving a Competing Interest or Conflict of Interest, the content of the discussion, and a record of any votes taken in connection therewith.
Article V. ANNUAL STATEMENTS
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16 Section 5.1. The Chairs of the Board and committees shall annually confirm to the Chair of the Finance Committee that each Board or committee member:
(a) Has received a copy of this Conflicts of Interest policy; (b) Has been afforded an opportunity to discuss and raise questions concerning the policy; and
(c) Has agreed to comply with the policy.
Section 5.2. The Chairs of the Board and committees shall annually complete and deliver to the Chair of the Finance Committee the Annual Conflict of Interest Affidavit and Disclosure form (attached herein as Exhibit A).
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17 Exhibit A to Conflicts of Interest & Ethics Policy
Instructions: Complete the following form and submit it to the office of [The City of San Bernardino Foundation for Community & Economic Growth ] (“Corporation”). This form must be promptly updated if your response to any of the questions changes.
Name: [name]
Board Member? Committee Member?
Committee Name:
General Questions and Disclosure:
1. Have you received a copy of the Corporation’s Conflict of Interest Policy? Yes No
2. Have you been given the opportunity to discuss and raise questions concerning the policy?
Yes No
3. Do you agree to comply with the policy?
Yes No
4. Are you aware of any potential conflicts of interest s or conflicts of commitment with your Corporation appointment? If yes, please provide a separate written statement identifying the potential conflicts.
Yes No
Affirmation:
In submitting this form, I affirm that the above [and any attached] information is true and complete to the best of my knowledge.
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18 Dated: [date of disclosure]
_____________
[Name of signatory]
Dated: [date of reviewer]
Reviewed by:
_____________
[Name of reviewer]
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19 CERTIFICATE OF SECRETARY
I, the undersigned, the duly elected Secretary of [The City of San Bernardino Foundation for Community & Economic Growth], a California nonprofit public benefit corporation, do hereby certify:
That the foregoing Bylaws were adopted as the Bylaws of the Corporation by the Directors of the Corporation on [Month]___, 2024, and the same do now constitute the Bylaws of said Corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name this [Month] ___, 2024.
[Name]
Secretary