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HomeMy WebLinkAbout08 - First Marines Adoption CommitteeCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. s January 26, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Administrative Services Department Dick Kurth, Deputy Administrative Services Director (949) 644 -3123 or dkurth(a_)newportbeachca.gov Dave Kiff, City Manager (949) 644 -3000 or dkiff (a- -)newportbeachca.gov SUBJECT: Newport Beach First Battalion, First Marines Adoption Committee ISSUE: Should the City Council recognize the Newport Beach 1st Battalion, 1st Marines Foundation and continue to participate in the community's support of our adopted Battalion? RECOMMENDATION: Adopt the attached resolution acknowledging the formation of the Foundation and setting the parameters for ongoing City support. DISCUSSION: The City "adopted" the First Battalion, First Marines by proclamation on December 9, 2003, and formed the 1/1 Adoption Committee. Since that time, the Committee has provided support for the Marines and families of the Battalion in a variety of ways, from Mess Nights and Golf Tournaments to Christmas parties for the children and welcome home celebrations to assistance for families of casualties. The residents and civic groups in Newport Beach have sent an unmistakable message of support and appreciation to these young Marines and their families. Over $750,000 has been generated through fund raising activities and direct contributions, not including funds generated for the Memorial to the Battalion. Many communities in this area have adopted battalions and/or other military units. But Newport Beach has clearly set the standard not only for the magnitude of the support from a monetary standpoint, but for the broad range of active participation by members of the community and the surrounding area. First Battalion, First Marines Adoption Committee January 26, 2010 Page 2 At this time, the members of the Committee are in the process of organizing as an independent charitable corporation called the Newport Beach 15t Battalion 1st Marines Foundation. In order to help perpetuate its broad base of support into the future, the Foundation's By Laws call for the 15 members of its Advisory Board to be nominated by the City (five members), the local American Legion Post (4 members), the Chamber of Commerce (3 members), and the Advisory Board itself (3 members). The primary function of the Advisory Board is to appoint and support the 5 to 7 member Board of Directors. The Committee anticipates that the Foundation will be formally incorporated and established in the near future. The attached resolution acknowledges the role of the Foundation, and sets forth the parameters of City support in the future. Basically City support will be: -- Nomination of Advisory Board Members by the City Manager. -- Authorization of staff time to support the Foundation and various events as deemed appropriate by the City Manager. -- Authorization for the City Manger to approve use of City material and supplies, at cost, in support of Foundation activities. -- Authorization of future funding support as budgeted and approved by the City Council. In addition, the proposed resolution directs the transfer of remaining Committee funds still held by the City (approximately $81,192) to an appropriate Foundation account with a financial institution when the City Manager is satisfied that the new corporation is properly registered with the State and the Foundation is viable to conduct business on its own. Environmental Review: The City Council's approval of this agenda item does not require environmental review. Public Notice: This agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Funding Availability: No City Funds are required to approve this resolution. First Battalion, First Marines Adoption Committee January 26, 2010 Page 3 Alternatives: The City Council could choose to discontinue support of the Committee (Foundation) and either withdraw from the relationship with the Battalion or provide support in some other way. Prepared by: Submitted by: Dick Kurth Dave Kiff Deputy Administrative Services Director City Manager and 111 Committee Treasurer Attachments: Proposed Resolution Draft of Articles of Incorporation and By Laws RESOLUTION NO. 2010 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH REGARDING THE CITY'S ONGOING SUPPORT OF THE FIRST BATTALION, FIRST MARINES THROUGH THE 1/1 ADOPTION COMMITTEE. WHEREAS, the City "adopted" the First Battalion, First Marines by proclamation on December 9, 2003, and formed the 1(1 Adoption Committee; and WHEREAS, the City and the Battalion have enjoyed a mutually supportive and harmonious relationship involving numerous and varied events such as Mess Nights, Golf Tournaments, and special: functions for the members of the Battalion and their families, and numerous public functions within the City; and WHEREAS, the 1/1 Adoption Committee is supported by many civic organizations and individual residents within the City, and WHEREAS, the 1/1 Adoption Committee desires to evolve into a more formal and independent structure, as a 501(c)3 corporation called the Newport Beach First Battalion First Marines Foundation; and WHEREAS, the Foundation's By -Laws specify an Advisory Board with members nominated by the City, the American Legion, and the Chamber of Commerce; and WHEREAS, the City desires to continue its relationship with the Committee and the Battalion itself, NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that the City Manager shall nominate individuals to serve on the Advisory Board on such occasions as vacancies occur and nominations are requested by the Committee. Such individuals may be City employees. BE IT FURTHER RESOLVED that the City Manager may authorize support of the Battalion and the Committee's efforts by authorizing staff time as he deems appropriate; and by use of materials and supplies at cost; and by direct funding as may be budgeted and appropriated by the City Council. BE IT FURTHER RESOLVED that Committee funds currently held by the City shall be transferred to the Committee's institutional account when the City Manager is satisfied that the new corporation is properly registered with the State and the Foundation is viable to conduct business on its own. ADOPTED the 26th' day of January, 2010. 13VAWS]H ATTEST: CITY CLERK ARTICLES OF INCORPORATION OF THE NEWPORT BEACH 1ST BATTALION, 1ST MARINES FOUNDATION DRAFT ONE: The name of this corporation is The Newport Beach 1st Battalion, 1st Marines Foundation. TWO: This corporation is a nonprofit public benefit corporation and is not organized for the private gain of any person. It is organized under the Nonprofit Public Benefit Law for charitable purposes. The specific charitable purposes of this corporation are to provide charitable assistance and relief for members of the 15t Battalion, 15t Marines, of the United States Marine Corps who are injured, ill, distressed, or in otherwise in need; to provide assistance, solace and comfort to spouses and children of injured, ill, or deceased United States Marines serving in the 1st Battalion, Ist Marines; and to sponsor and provide educational programs, grants and scholarships for members of the Ist Battalion, 1st Marines and their immediate family members. THREE: The name and address in the State of California of this corporation's initial agent for service of process is Homer Bludau, nc FOUR: This corporation is organized and operated exclusively for charitable purposes within the meaning of Internal Revenue Code section 501(c)(3). No substantial part of the activities of this corporation shall consist of carrying on propaganda, or otherwise attempting to influence legislation, and the Corporation shall not participate or intervene in any political campaign (including the publishing or distribution of statements) on behalf of any candidate for public office. FIVE: The property of this corporation is irrevocably dedicated to charitable purposes and no part of the net income or assets of this corporation shall.ever inure to the benefit of any director, officer or member thereof or to the benefit of any private person. Upon the dissolution or winding up of the Corporation, its assets remaining after payment, or provision for payment, of all debts and liabilities of this corporation shall be distributed to a nonprofit fund, foundation or corporation which is organized and operated exclusively for charitable purposes and which has established its tax exempt status under Section 501(c)(3), Internal Revenue Code. SIX: No substantial part of the activities of this corporation shall consist of carrying on propaganda, or otherwise attempting to influence legislation, and the Corporation shall not participate or intervene in any political campaign (including the publishing or distribution of statements) on behalf of any candidate for public office. DATED: January_, 2010 -2- W. James Slaughter Incorporator THE NEWPORT BEACH 1ST BATTALION, 1ST MARINES FOUNDATION A CALIFORNIA PUBLIC BENEFIT CORPORATION ARTICLE I. GENERAL PROVISIONS SECTION 1.01 NAME. The name of this organization is the The Newport Beach 1st Battalion, Ist Marines Foundation. SECTION1.02 PURPOSE AND OBJECTIVES. The Newport Beach 1st Battalion, 1st Marines Foundation is founded to provide charitable assistance and relief for members of the I" Battalion, I` Marines (the "1 -1 Marines "), of the United States Marine Corps who are injured, ill, distressed, or in otherwise in need; to provide assistance, solace and comfort to spouses and children of injured, ill, or deceased United States Marines serving in the I" Battalion, I5C Marines; and to sponsor and provide educational programs, grants and scholarships for members of the 151 Battalion, IS` Marines and their immediate family= members. The Board of Directors shall be empowered and authorized to cant' out activities which are consistent with the foregoing basic charitable purpose, as needs arise. Examples of charitable activities to be conducted by this corporation include the following: • To provide emergency financial and assistance to 1 -1 Marines and their families, who are in need due to an injury or illness. • To provide financial and other assistance to the spouse and children of 1 -1 Marines who have died in the service of the United States. • To provide scholarships to children of 1 -I Marines, based on academic ability and/or economic need. • To recognize, celebrate and publicize those persons who have shown special merit in supporting the charitable mission of this corporation. • To provide economic assistance to other philanthropic organizations who support the 1 -1 Marines. • To promote the social welfare of the I A Marines community by providing support for such other philanthropic activities as may later be determined necessary by the Board of Directors; SECTION 1.03 ORGANIZATION AND GOVERNANCE This corporation is organized as a California nonprofit public benefit corporation. The activities of the Corporation are governed by its Board of Directors. Pursuant to California Corporations Code Section 5220(c), the Board of Directors is appointed by an Advisory Board, as provided for in Article 3 of these Bylaws. The Corporation shall have no "members" within the meaning of Section 5056 of the California Corporations Code. Except for those matters requiring approval or action by the Advisory Board, any action which would otherwise, under law or the provisions of the Articles of Incorporation or Bylaws of this corporation, require approval by a majority of all members or approval by the members, shall only require the approval of the Board of Directors. SECTION 1.04 DECLARATION OF CHARITABLE PURPOSE This corporation is organized exclusively for charitable purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code or the corresponding provision of any future United States internal revenue law. This corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the purposes of this corporation, and the Corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code or the corresponding provision of any future United States internal revenue law, or (b) by a corporation, contributions to which are deductible under Section 170(c)(2) of the Internal Revenue Code or the corresponding provision of any future United States internal revenue law. SECTION 1.05 PROHIBITION AGAINST SHARING CORPORATE PROFITS AND ASSETS No director, officer, member, employee, or other person connected with this Corporation, or any private individual, shall receive at any time any of the net earnings or pecuniary profit from the operations of the Corporation, provided, however, that this provision shall not prevent payment to any such person of reasonable compensation for services performed for the Corporation in effecting any of its public or charitable purposes, provided that such compensation is otherwise permitted by these Bylaws and is fixed by resolution of the Board of Directors; and no such person or persons shall be entitled to share in the distribution of, and shall not receive, any of the corporate assets on dissolution of the Corporation. All members, if any, of the Corporation shall be deemed to have expressly consented and agreed that on such dissolution or winding up of the affairs of the Corporation, whether voluntarily or involuntarily, the assets of the Corporation, after all debts have been satisfied, shall be distributed as required by the Articles of Incorporation of this corporation and not otherwise. SECTION 1.06 OFFICES The principal office of the Corporation for the transaction of its business is 3300 Newport Boulevard,, Newport Beach, California, 92663, or such other location within the County of Orange as the Board may from time to time designate. SECTION 1.07 FISCALYEAR The fiscal year of the Corporation shall begin on the first day of January and end on the last day of December in each year. SECTION 1.08 AMENDMENT OF BYLAWS OR ARTICLES OF INCORPORATION The articles of incorporation of the Corporation or these Bylaws may be altered, amended, or repealed, and new Bylaws adopted, by approval of both the Board of Directors and the Advisory Board. ARTICLE II. BOARD OF DIRECTORS SECTION 2.01 POWERS OF THE BOARD OF DIRECTORS Except as otherwise provided herein, all business and affairs of the Corporation shall be exercised by, and under the authority of, a governing body known as the Board of Directors, subject to compliance with relevant law, the Articles of Incorporation, or these Bylaws. SECTION 2.02 DUTIES The Board of Directors shall, among other things, oversee and have responsibility for the following: organizational philosophy consistent with the basic purpose of the Corporation, program direction and guidance through a business plan; provision of policy and organizational guidelines; development of an annual operational budget; development and implementation of fund- raising programs; establishment and approval of support organizations and programs; development of a means of financial support through fund - raising and support groups; and communication of the organization's goals by means of a public relations program. SECTION 2.03 NUMBER OF DIRECTORS; QUALIFICATIONS (a) Number of Directors. The authorized number of voting Directors of the Corporation shall seven (7), and collectively they shall be known as the Board of Directors. The authorized number of voting Directors shall not be changed except with the consent of both the Board of Directors and the Advisory Board. (b) Qualifications. Each director of this corporation shall meet each of the following requirements: • At least 21 years old • United States citizen or permanent resident • Familiar with the 1 -1 Marines and their mission • Committed to charitable support of the 1 -I Marines. • Possess the requisite intellipence and skills necessary to guide the organization in performing its mission. SECTION 2.04 APPOINTMENT OF DIRECTORS All directors of this corporation shall be appointed by the Advisory Board pursuant to the procedures set forth in Article 3 below. The Advisory Board shall appoint new or -3- replacement directors whenever a vacancy occurs on the Board of Directors or when the number of authorized directors is increased. Any director appointed by the Advisory Board may be rejected by a majority vote of the then sitting Board of Directors taken within thirty (30) days after the date of appointment. Any appointed director not rejected by the Board of Directors within thirty (30) days of the date of appointment shall be deemed accepted and seated as a director, SECTION 2.05 TERM OF OFFICE; TERM LIMITS Each director shall serve for a term which may be between one and three years, at the election of the Advisory Board, with the default term being two years unless otherwise specified by the Advisory Board. Upon completion of a director's term, the Advisory Board may or may not re- appoint a sitting director to an additional term, provided, however, that no director may serve more than three (3) consecutive terms. Persons who have served three (3) consecutive terms may be reappointed as directors after they have been off the board for at least two (2) years. SECTION 2.06 CHAIRPERSON OF THE BOARD OF DIRECTORS The Board of Directors shall be chaired by a Chairperson of the Board of Directors, who shall be elected by the Board of Directors. SECTION 2.07 COMPENSATION Directors shall serve without compensation except as provided herein. Directors shall be allowed reasonable advancement or reimbursement of expenses incurred in the performance of their regular duties. Directors may not be compensated for rendering services to the Corporation in any capacity other than director unless such other compensation is reasonable and is allowable under the provisions of the Corporation's conflict of interest policy. SECTION 2.08 RESTRICTION REGARDING INTERESTED DIRECTORS. Notwithstanding any other provision of these Bylaws, not more than forty -nine (49 %) of the persons serving on the Board of Directors may be interested persons. For purposes of this Section, "interested persons" means either: (a) Any person currently being com ensated by the Corporation for services rendered it within the previous twelve (12� months, whether as a full or part-time officer or other employee, independent contractor, or otherwise, excluding any reasonable compensation paid to a director as director; or (b) Any brother, sister, ancestor, descendant, spouse, brother -in -law, sister -in -law, son -in -law, daughter -in -law, mother -in -law, or father -in -law of any such person. 0 SECTION 2.09 PLACE OF MEETINGS Meetings shall be held at the principal office of the Corporation unless otherwise provided by the Board of Directors or at such place within the County of Orange, State of California which has been designated from time to time by resolution of the Board of Directors. Any meeting, regular or special, may be held by conference telephone or similar communications equipment, so as long as the directors participating in such meeting can hear one another. SECTION 2.10 REGULAR AND ANNUAL MEETINGS Regular meetings of Directors shall be held on at such place and time as a majority of the Directors shall agree. The Board of Directors shall endeavor to schedule all regular meetings at a time and place to coincide with meetings of the Advisory Board. The annual meeting of Directors shall be held at the Corporation's principal place of business at 10:00 a.m. on the third Wednesday of January in each year, or at such other time and place within the County of Orange, State of California, as a majority of the Directors and the Advisory Board shall agree. At the annual meeting of directors, directors shall be appointed by the Advisory Board. SECTION 2.11 SPECIAL MEETINGS Special meetings of the Board of Directors may be called by the Chairperson of the Board of Directors, the President, any Vice President, the Secretary, or by any two directors, and such meetings shall be held at the place, within or without the State of California, designated by the person or persons calling the meeting, and in the absence of each designation, at the principal office of the Corporation. SECTION 2.12 NOTICE OF MEETINGS. Regular meetings of the Board of Directors may be held without notice. Special meetings of the Board of Directors shall be held upon four (4) days' notice by first -class mail or forty -eight (48) hours' notice delivered personally, or by telephone to each director and to the chairman of the Advisory Board. If sent by mail, the notice shall be deemed to be delivered on its deposit in the mails. Such notices shall be addressed to each director at his or her address as shown on the books of the Corporation. A copy of each notice of meeting shall be sent to the Advisory Committee at such address as the Advisory Committee may direct from time to time. Notice of the time and place of the adjourned meeting need not be given to absent directors if the time and place of the adjourned meeting are fixed at the meeting adjourned and if such adjourned mecting.is held no more than twenty-four (24) hours from the time of the original meeting. Notice shall be given of any adjourned regular or special meeting to directors absent from the original meeting if the adjourned meeting is held more than twenty -four (24) hours from the time of the original meeting. Notice of meetings not herein dispensed with shall specify the place, day and hour of the meeting. The purpose of any Board of Directors meeting shall be specified in the notice. -5- SECTION 2.13 WAIVER OF NOTICE AND CONSENT TO HOLDING MEETINGS The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, are as valid as though the meeting had been duly held after proper call and notice, provided a quorum, as hereinafter defined, is present and provided that either before or after the meeting each director not present signs a waiver of notice, a consent to holding a meeting, or an approval of the minutes thereof. All such waivers, consents, or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. SECTION 2.14 QUORUM FOR MEETINGS A quorum shall consist of a majority (over 50 %) of the then serving members of the Board of Directors. SECTION 2.15 MAJORITY ACTION AS BOARD OF DIRECTORS ACTION Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present is the act of the Board of Directors, unless the Articles of Incorporation or Bylaws of this corporation, or provisions of the California Corporations Code, particularly those provisions relating to appointment of committees (Section 5212), approval of contracts or transactions in which a director has a material financial interest (Section 5233) and indemnification of directors (Section 5238e), require a greater percentage or different voting rules for approval of a matter by the Board of Directors. SECTION 2.16 CONDUCT OF MEETINGS Meetings of the Board of Directors shall be presided over by the Chairperson of the Board of Directors, or, if no such person has been designated or, in his or her absence, the President of the Corporation or, in his or her absence, by the Vice President of the Corporation or, in the absence of each of these persons, by a Chairperson chosen by a majority of the directors present at the meeting. The Secretary of the Corporation shall act as secretary of all meetings of the Board of Directors, provided that, in his or her absence, the presiding officer shall appoint another person to act as Secretary of the meeting. Meetings shall be governed by Roberts Rules of Order, as such rules may be revised from time to time, insofar as such rules are not inconsistent with or in conflict with these Bylaws, with the Articles of Incorporation of this corporation, or with provisions of law. SECTION 2.17 ACTION BY UNANIMOUS WRITTEN CONSENT WITHOUT MEETING Any action required or permitted to be taken by the Board of Directors under any provision of law may be taken without a meeting, if all members of the Board of Directors shall individually or collectively consent in writing to such action. For the purposes of this Section only, "all members of the Board of Directors" shall not include any "interested director" as defined in Section 5233 of the California Corporations Code. Such written consent or consents shall be filed with the minutes of the proceedings of the 0 Board of Directors. Such action by written consent shall have the same force and effect as the unanimous vote of the directors. Any certificate or other document filed under any provision of law which relates to action so taken shall state that the action was taken by unanimous written consent of the Board of Directors without a meeting and that the Bylaws. of.this corporation authorize the directors to so act, and such statement shall be prima facie evidence of such authority. The Advisory Board shall be provided with true and correct copies of all Board of Directors actions taken by written consent. SECTION 2.18 VACANCIES (a) Vacancies on the Board of Directors shall exist (1) on the death, resignation or removal of any director, and (2) whenever the number of authorized directors is increased. The Board of Directors may declare vacant the office of a director who has been declared of unsound mind by a final order of court, or convicted of a felony, or been found by a final order or judgment of any court to have breached any duty under Section 5230 and following provisions of the California Corporations Code. (b) Any director may resign effective upon giving written notice to the Chairperson of the Board of Directors, the President, the Secretary, or the Board of Directors, unless the notice specifies a later time for the effectiveness of such resignation. No director.may resign if the Corporation would be left without a duly elected director or directors in charge of its affairs, except upon notice to the Attorney General. (c) The Advisory Board shall be responsible for appointment of directors to fill vacancies on the Board of Directors, subject to the Board of Directors right to reject as provided in Section 2.04 above. (d) A person appointed to fill a vacancy as provided by this Section shall hold office until the next annual election of the Board of Directors or until his or her death, resignation or removal from office. SECTION 2.19 NON- LIABILITYOF DIRECTORS The directors shall not be personally liable for the debts, liabilities, or other obligations of the Corporation. SECTION 2.20 INDEMNIFICATION BY CORPORATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENT To the extent that a person who is, or was, a director, officer, employee or other agent of this corporation has been successful on the merits in defend of any civil, criminal, administrative or investigative proceeding brought to procure a judgment against such person by reason of the fact that he or she is, or was, an agent of the Corporation, or has been successful in defense of any claim, issue or matter, therein, such person shall be -7- indemnified against expenses actually and reasonably incurred by the person in connection with such proceeding. If such person either settles any such claim or sustains a judgment against him or her, then indemnification against expenses, judgments, fines, settlements and other amounts reasonably incurred in connection with such proceedings shall be provided by this corporation but only to the extent allowed by, and in accordance with the requirements of, Section 5238 of the California Nonprofit Benefit Corporation Law. SECTION 2.21 INSURANCE FOR CORPORATE AGENTS The Board of Directors may adopt a resolution authorizing the purchase and maintenance of insurance on behalf of any agent of the Corporation (including a director, officer, employee or other agent of the Corporation) against any liability other than for violating provisions of law relating to self - dealing (Section 5233 of the California Corporations Code) asserted against or incurred by the agent in such capacity or arising out of the agent's status as such, whether or not the Corporation would have the power to indemnify the agent against such liability under the provisions of Section 5238 of the California Corporations Code. ARTICLE III. ADVISORY BOARD SECTION 3.01 DUTIES OF THE ADVISORY BOARD The primary duties of the Advisory Board shall be to appoint the members of the Board of Directors, and to appoint new directors to fill vacancies from time to time as the need arises. The Chairperson of the Advisory Board (or his or her delegate) shall also attend meetings of the Board of Directors, and other members of the Advisory Board shall be entitled to attend Board of Directors meetings. The Advisory Board shall also approve any proposed additions or changes to the articles of incorporation or Bylaws of this Corporation. The Advisory Board shall not have any duties with respect to the management or control of the operations of the Corporation. SECTION 3.02 COMPOSITION OF THE ADVISORY BOARD The Advisory Board shall consist of fifteen (15) members, who shall be selected as follows: • Five (5) members shall be appointed by the City Manager of the City of Newport Beach. • Four (4) members shall be appointed by the Post Commander of American Legion Post 291 (Newport Harbor). • Three (3) members shall be appointed by the Newport Harbor Chamber of Commerce. • The remaining three (3) members shall be selected by a vote of the aforementioned appointed members. In Members of the Advisory Board appointed by the City Manager of Newport Beach, the Post Commander of American Legion Post 291, and the Newport Harbor Chamber of Commerce are referred to herein as "appointed members ". Qualifications. Each member of the Advisory Board shall meet each of the following requirements: • At least 21 years old • United States citizen or permanent resident • Committed to charitable support of the 1 -1 Marines. SECTION 3.03 TERM OF OFFICE FORADVISORY BOARD Appointed members of the Advisory Board shall serve for an initial term of two years; non - appointed members shall serve a term of one year, and may be re- elected by the appointed members. No term limits are applicable to members of the Advisory Board. SECTION 3.04 APPOINTMENT OF CHAIRPERSON The Advisory Board shalt select a chairperson from among its members annually by a majority vote. SECTION 3.05 QUORUM A quorum shall consist of one -third (33.3 %) of the members of the Advisory Board. SECTION 3.06 PROCEDURE FOR APPOINTMENT OF DIRECTORS Once constituted, the Advisory Board shall meet to consider the appointment of seven (7) persons of good character and requisite skill to serve on the Board of Directors of the Corporation. The meeting shall be chaired by the Chairperson. Any member of the Advisory Committee may nominate any person who meets the qualifications for members of the Board of Directors as set forth in Section 2.03(b) above. Nominees may include persons who serve on the Advisory Board. After the slate of nominees is completed, a vote shall be held to appoint the initial seven members of the Board of directors. Each member of the Advisory Board may cast a number of votes equal to the number of directors being elected. The Advisory Board shall prescribe the term for each director position elected, which shall be at least one year but not more than three years. Considerations hall be given to staggering the terms given for greater continuity of the membership of the Board of Directors. After the Advisory Board has appointed the initial directors, it shall meet at least twice a year at a date and time set at least thirty (30) days in advance by the Chairperson. At its meetings the Advisory Committee shall consider whether or not to re- appoint any of the sitting directors whose terms are expiring, and to consider and elect candidates for open seats on the Board of Directors. Also at the annual meeting, the Advisory Board shall nominate and elect persons to fill the non - appointed seats on the Advisory Board, The Advisory Board shall also undertake to obtain replacement members for any vacant appointed seats on the Advisory Board. M In order to facilitate the nomination of qualified candidates to the Advisory Board, the Advisory Board shall maintain a list of persons who have expressed an interest in serving on the Advisory Board and who possess the qualifications for Advisory Board membership. Such list shall be regularly updated and provided from time to time to the three nominating organizations. It is intended that the list of interested persons be informational in nature and non - binding on the nominating organizations. SECTION 3.07 COMPENSATION Members of the Advisory Board shall serve without compensation. SECTION 3.08 PLACE AND TIME OF MEETINGS Meetings of the Advisory Board shall be held at the principal office of the Corporation unless otherwise designated by the Chairperson of the Advisory Board. The annual meeting of the Advisory Board shall be held concurrent with the annual meeting of the Board of Directors. Any meeting, regular or special, may be held by conference telephone or similar communications equipment, so as long as the members participating in such meeting can hear one another. SECTION 3.09 NOTICE OF MEETINGS. Notice of meetings of the Advisory Board shall be given in the same manner as notice of meetings of the Board of Directors. SECTION 3.10 CONDUCT OF MEETINGS Meetings of the Advisory Board shall be presided over by the Chairperson of the Advisory Board, or, in his or her absence, the another member of the Advisory Board selected by the members present at the meeting. Written minutes of the meeting shall be kept and maintained with the Corporation's records. Meetings shall be governed by Roberts Rules of Order, as such rules may be revised from time to time, insofar as such rules are not inconsistent with or in conflict with these Bylaws, with the Articles of Incorporation of this corporation, or with provisions of law. SECTION 3.11 ACTION BY UNANIMOUS WRITTEN CONSENT WITHOUT MEETING Any action required or permitted to be taken by the Advisory Board under any provision of law may be taken without a meeting, if all members of the Advisory Board shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Advisory Board. Such action by written consent shall have the same force and effect as the unanimous vote of the members of the Advisory Board. 10- SECTION 3.12 VACANCIES (a) Vacancies on the Advisory Board shall exist (1) on the death, resignation or removal of any member, and (2) whenever the number of authorized members is increased. The Advisory Board may declare vacant the office of a member who has been declared of unsound mind by a final order of court, or convicted of a felony, or been found by a final order or judgment of any court to have breached any duty under Section 5230 and following provisions of the California Corporations Code. (b) Any member may resign effective upon giving written notice to the Chairperson of the Advisory Board, unless the notice specifies a later time for the effectiveness of such resignation. (c) Vacancies of appointed seats on the Advisory Board shall be filled by the appointing agency as provided in Section 3.02 above. Vacancies of seats elected by the members of the Advisory Board shall be filled by a vote of the members of the Advisory Board. SECTION 3.13 NON - LIABILITY OF MEMBERS The members of the Advisory Board shall not be personally liable for the debts, liabilities, or other obligations of the Corporation. ARTICLE IV. OFFICERS SECTION 4.01 NUMBER OF OFFICERS The officers of the Corporation shall be a Chairperson of the Board of Directors, a President, a Secretary, and a Chief Financial Officer who shall be designated the Treasurer. The Corporation may also have, as determined by the Board of Directors, one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers, or other officers. Any number of offices may be held by the same person except that neither the Secretary nor the Treasurer may serve as the President or Chairperson of the Board of Directors. SECTION 4.02 QUALIFICATION, ELECTION, AND TERM OF OFFICE Other officers shall be elected by the Board of Directors, at any time, and each officer shall hold office until he or she resigns or is removed or is otherwise disqualified to serve, or until his or her successor shall be elected and qualified whichever occurs first. SECTION 4.03 SUBORDINATE OFFICERS The Board of Directors may appoint such other officers or agents as it may deem desirable, and such officers shall serve such terms, have such authority, and perform such duties as may be prescribed from time to time by the Board of Directors. -11- SECTION 4.04 REMOVAL AND RESIGNATION Any officer may be removed, either with or without written notice to the Board of Directors or to the President or Secretary of the Corporation. Any such resignation shall take effect at the date of receipt of such notice or at any later date specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. The above provisions of this Section shall be superseded by any conflicting terms of a contract which has been approved or ratified by the Board of Directors relating to the employment of any officer of the Corporation. Any vacancies caused by the death, resignation, removal, disqualification, or otherwise, of any officer shall be filled as provided in these Bylaws by the Board of Directors. In the event of a vacancy in any office other than that of Chairperson, President, or CFO, such vacancy may be filled temporarily by appointment by the President until such time as the Board of Directors shall fill the vacancy. Vacancies occurring in offices of officers appointed at the discretion of the Board of Directors may or may not be filled as the Board of Directors shall determine. SECTION 4.05 DUTIES OF PRESIDENT The President shall be the chief executive officer of the Corporation and shall, subject to the control of the Board of Directors, supervise and control the affairs of the Corporation and the activities of the officers. He or she shall perform all duties incident to his or her office and such other duties as may be required by law, by the Articles of Incorporation of this corporation, or by these Bylaws, or which may be prescribed from time to time by the Board of Directors. Unless another person is specifically appointed as Chairperson of the Board of Directors, he or she shall preside at all meetings of the Board of Directors, If applicable, the President shall preside at all meetings of the members. Except as otherwise expressly provided by law, by the Articles of Incorporation, or by these Bylaws, he or she shall, in the name of the Corporation, execute such deeds, mortgages, bonds, contracts, checks, or other instruments which may from time to time be authorized by the Board of Directors. SECTION 4.06 DUTIES OF VICE PRESIDENT In the absence of the President, or in the event of his or her inability or refusal to act, the Vice President shall perform all the duties of the President, and when so acting shall have other powers of, and be subject to all the restrictions on, the President. The Vice President shall have other powers and perform such other duties as may be prescribed by law, by the Articles of Incorporation, or by these Bylaws, or as may be prescribed by the Board of Directors. SECTION 4.07 DUTIES OF SECRETARY The Secretary shall; (a) Certify and keep at the principal office of the Corporation the original, or a copy of these Bylaws as amended or otherwise altered to date. 12- (b) Keep at the principal office of the Corporation or at such other place as the Board of Directors may determine, a book of minutes of all meetings of the directors, and, if applicable, meetings of committees of directors and of members, recording therein the time and place of holding, whether regular or special, how called, how notice thereof was given, the names of those present or represented at the meeting, and the proceedings thereof. (c) See that the all notices are duly given in accordance with the provisions of these Bylaws or as required by law. (d) Be custodian of the records and of the seal of the Corporation and see that the seal is affixed to all duly executed documents, the execution of which on behalf of the Corporation under its seal is authorized by law or these Bylaws. (e) Keep at the principal office of the Corporation a membership book containing the name and address of all members, and, in the case where any membership has been terminated, he or she shall record such fact in the membership book together with the date on which such membership ceased. (f) Exhibit at all reasonable times to any director of the Corporation, or to his or her agent or attorney, on request therefor, the Bylaws, the membership book, and the minutes of the proceedings of the directors of the Corporation. (g) Provide assistance and support to the Advisory Board in planning meetings and discharging its duties. (h) In general, perform all duties incident to the office of Secretary and such other duties as may be required by law, by the Articles of Incorporation of this corporation, or by these Bylaws, or which may be assigned to him or her from time to time by the Board of Directors. SECTION 4.08 DUTIES OF TREASURER Subject to the provisions of these Bylaws relating to the execution of instruments, deposits and funds, the Treasurer shall: (a) Have charge and custody of, and be responsible for, all funds and securities of the Corporation, and deposit all such funds in the name of the Corporation in such banks, trust companies, or other depositories as shall be selected by the Board of Directors. (b) Receive, and give receipt for, monies due and payable to the Corporation from any source whatsoever. (c) Disburse, or cause to be disbursed, the funds of the Corporation as may be directed by the Board of Directors, taking proper vouchers for such disbursements. -13- (d) Keep and maintain adequate and correct accounts of the Corporation's properties and business transactions, including accounts of its assets, liabilities, receipts, disbursements, gains or losses. (e) Exhibit at all reasonable times the books of account and financial records to any director of the Corporation, or to his or her agent or attorney, on request therefor. (f) Render to the President and directors, whenever requested, an account of any or all of his or her transactions as Treasurer and of the financial condition of the Corporation. (g) Prepare, or cause to be prepared, and certify, or causes to be certified, the financial statements to be included in any required reports. (h) Prepare, or cause to be prepared, all required state and federal tax and information returns, and cause the timely filing of such documents. (i) In general, perform all duties incident to the office of Treasurer and such other duties as may be required by law, by the Articles of Incorporation, or by these Bylaws, or which may be assigned to him or her from time to time by the Board of Directors, SECTION 4.09 COMPENSATION Officers of this Corporation shall serve without compensation except as provided herein. Officers shall be allowed reasonable advancement or reimbursement of expenses incurred in the performance of their regular duties. Officers may not be compensated for rendering services to the Corporation in any capacity other than as an officer unless such other compensation is reasonable and is allowable under the provisions of the Corporation's conflict of interest policy. Nothing herein shall prevent the payment of a salary to an employee of the Corporation (such as an executive director) who may also serve in an officer capacity. ARTICLE V. FINANCIAL AND OPERATIONAL MATTERS SECTION 5.01 DEPOSITS All funds of the Corporation shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositories as the Board of Directors may select. SECTION 5.02 CHECKS AND NOTES Except as otherwise specifically determined by resolution of the Board of Directors, or as otherwise required by law, checks, drafts, promissory notes, orders for the payment of money, and other evidence of indebtedness of the Corporation shall be signed by the -14- Treasurer and countersigned by the President of the Corporation. Checks with a value of less than $500 may be signed by either the president or the secretary. SECTION 5.03 EXECUTION OF INSTRUMENTS The Board of Directors, except as otherwise provided in these Bylaws, may by resolution authorize any officer or agent of the Corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Unless so authorized, no officer, agent, or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable monetarily for any purpose or in any amount. SECTION 5.04 GIFTS The Board of Directors may accept on behalf of the Corporation any contribution, gift, bequest, or devise for the charitable or public purposes of this corporation. SECTION 5.05 MAINTENANCE OF CORPORATE RECORDS The Corporation shall keep at is principal office in the State of California all of the following records: (a) Minutes of all meetings of directors, committees of the board and members, indicating the time and place of holding such meetings, whether regular or special, how called, the notice given, and the names of those present and the proceedings thereof, (b) Adequate and correct books and records of account, including accounts of its properties and business transactions and accounts of its assets, liabilities, receipts, disbursements, gains and losses; (c) A record of its members, if any, indicating their names and addresses and, if applicable, the class of membership held by each member and the termination date of any membership; (d) A copy of the Corporation's Articles of Incorporation and Bylaws as amended to date, which shall be open to inspection by the members, if any, of the Corporation at all reasonable times during office hours. SECTION 5.06 DIRECTORS' INSPECTION RIGHTS Every director and the Chairperson of the Advisory Board shall the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the condition. -15- SECTION 5.07 CORPORATE SEAL The Board of Directors may adopt and use a corporate seal. Such seal shall be kept at the principal office of the Corporation. Failure to affix the seal to corporate instruments, however, shall not affect the validity of any such interment. SECTION 5.08 ANNUAL REPORT Any annual report shall be furnished not later than one hundred and twenty (120) days after the close of the Corporation's fiscal year to all directors of the Corporation and which report shall contain the following information in appropriate detail: (a) The assets and liabilities, including the trust funds, of the Corporation as of the end of the fiscal year; (b) The principal changes in assets and liabilities, including trust funds, during the fiscal year; (c) The revenue or receipts of the Corporation, both unrestricted and restricted to particular purposes, for the fiscal year; (d) The expenses or disbursements of the Corporation, for both general and restricted purposes during the fiscal year; (e) Any other information deemed pertinent by the Board of Directors. The annual report shall be accompanied by any report thereon of independent accountants, or if there is no such report, the certificate of an authorized officer of the Corporation that such statements were prepared without audit from the books and records of the Corporation. SECTION 5.09 CONFLICT OF INTEREST POLICY. The Corporation shall adopt and adhere to a policy which complies with applicable state and federal guidelines for avoidance of conflicts of interest by members of the Board of Directors and other interested persons. The Corporation's conflict of interest policy shall promote ethical and honest decision- making by any individuals who influence the Corporation's business and operational decisions, and to ensure that employees and members of the Board of Directors perform their duties with integrity and in an impartial manner free from any bias created by personal interests. Such conflict of interest policy shall be updated from time to time as necessary to comply with applicable laws. Each member of the Board of Directors shall be provided with a copy of the conflict of interest policy and shall acknowledge in writing having received such policy. 16-