HomeMy WebLinkAboutSS03 - Board of Library Trustees & City Arts Commissiont�
Study Session Item No. ?
January 25, 2000
COMMUNITY SERVICES DEPARTMENT
Arts Et Cultural - Library - Recreation - Seniors
To: Mayor and Members of City Council
From: LaDonna Kienitz, Community Services Director /City Librarian
Re: Authority of the Board of Library Trustees and City Arts Commission;
- Information on Related Foundations
At the City Council meeting of January 11, 2000, Council Member Glover requested
that staff review the responsibilities of the Board of Library Trustees and the precepts
of the Newport Beach Library Foundation, and of the City Arts Commission and the
Newport Beach Arts Foundation.
Staff has compiled basic information on each of these organizations. Community
Services Department staff and representatives of the respective organizations will be
available at the Study Session to respond to any questions which the Council may
have.
I. APPOINTMENT OF LIBRARY TRUSTEES AND ARTS COMMISSIONERS
• Appointment of Boards and Commissions are governed by Article VII of the City
Charter. Specifically, Section 702 gives the City Council authority to appoint
members to boards or commissions from qualified electors of the City for terms of
four years.
Section 704 provides the rules under which the boards and commissions operate,
e.g. election by the members of a presiding officer, a requirement for meetings on
a monthly frequency, and requirement for meetings to be open to the public.
Both the Board of Library Trustees and the City Arts Commission conduct their
meetings in accordance with these regulations. Both have also adopted Bylaws for
conduct of their meetings, as permitted by Section 704.
II. BOARD OF LIBRARY TRUSTEES
The responsibilities of the Board of Library Trustees are established in Section 708
of the City Charter. The specific powers, in addition to having charge of the
administration of the City Libraries, are enumerated in Section 708.
Section 708 — Board of Library Trustees
Powers and Duties
There shall be a Board of Library Trustees consisting of five members
which shall have the power and duty to:
. (a) Have charge of the administration of City libraries and make and
enforce such by -laws, rules and regulations as may be necessary
therefor.
(b) Designate its own secretary.
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Authority of the Board of Library Trustees and City Arts Commission
Information on Related Foundations
Page 2 •
(c) Consider the annual budget for Library purposes during the process of
its preparation and make recommendations with respect thereto to the
City Council and City Manager.
(d) Purchase and acquire books, journals, maps, publications and
other supplies peculiar to the needs of the library, subject,
however, to the limitations of the budget for such purposes.
The expenditure and disbursement of funds for such purposes
shall be made and approved as elsewhere in this Charter
provided.
(e) Approve or disapprove the appointment, suspension or removal
of the Librarian, who shall be the department head.
(f) Accept money, personal property or real estate donated to the
City for library purposes, subject to the approval of the City
Council.
(g) Contract with schools, county or other governmental agencies to
render or receive library services or facilities, subject to the
approval of the City Council.
The current chair of the Board of Library Trustees is Jim Wood.
Library Board - Foundation Cooperating Agreement •
During the past months, representatives of the Board of Library Trustees and of
the Foundation have spent more than thirty hours working together to draft a
Cooperating Agreement, establishing guidelines for mutual cooperation. Some
meetings have been private with the City Manager as mediator; others, public
sessions of the Board of Library Trustees. The issue has been on the agenda of the
Board of Library Trustees for several months. The attached Cooperating
Agreement was approved by the Board of Library Trustees at the meeting of
January 18, 2000 (Exhibit 1). To date it has not been approved by the Foundation.
The Cooperating Agreement is similar to the document which the Board of Library
Trustees and the Friends of the Newport Beach Public Library [another non - profit
501(c)3 organization which provides support for the Library), approved in
November 1993, to guide the relationship of the two entities with respect to the
Friends of the Library Bookstore in the Central Library. That agreement has been
helpful in maintaining a strong positive relationship between the Board of Library
Trustees and the Friends.
III. NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
The Newport Beach Public Library Foundation was incorporated in 1989 to solicit
funds for construction of the new Central Library. That entity was officially
dissolved in 1994. A second Foundation under new leadership, officially named
the Newport Beach Library Foundation but commonly referred to as the Newport •
Beach Public Library Foundation, was incorporated in 1993, to raise ongoing funds
for the Library.
Authority of the Board of Library Trustees and City Arts Commission
Information on Related Foundations
• Page 3
The purpose of the Foundation, as indicated in the new Articles of Incorporation,
is to solicit funds and properties and disburse monies for the benefit of the
Newport Beach Public Library. The Foundation promotional materials state that it
"shall raise tax - deductible funds beyond those available through City funding, to
enable the Newport Beach Public Library to acquire collections, equipment and
enrichments beneficial to the community." In recent months the Board of Library
Trustees has publicly questioned the low percentage of collected funds disbursed
to the library. No gift has been made in FY 1999/2000.
The City Council has no appointive or directive authority over the non - profit
Library Foundation. The new Articles of Incorporation, January 13, 2000, and the
Bylaws, revised November 1, 1999, are attached (Exhibits 2 and 3). On January 13,
2000, the Foundation adopted a Statement of Policy on the relationship of the
Foundation to the library (Exhibit 4).
The president of the Newport Beach Public Library Foundation is David
Carmichael.
For the past three years and one -half years, the library has provided office space
in the Central Library and numerous support services for the Foundation. The
Foundation serves as the fiscal agent for the annual Distinguished Speaker Lecture
Series (DSLS); funds for the program are raised in the name of the Foundation by
the committee, comprised of community members, Library Trustees, and
Foundation Board members. The DSLS program events are coordinated and
implemented by 25 City staff members.
IV. CITY ARTS COMMISSION
The role of the City Arts Commission is defined in Section 712 of the City Charter.
The responsibilities include acting in an advocacy capacity to the City Council in
all matters pertaining to artistic, aesthetic and cultural aspects of the City.
Section 712 — City Arts Commission
There shall be a City Arts Commission with the number of members to be
established by ordinance or resolution and it shall have the power and duty
to:
(a) Act in an advisory capacity to the City Council in all matters
pertaining to artistic, aesthetic, and cultural aspects of the
City.
(b) Recommend to the City Council the adoption of such ordinances,
rules and regulations as it may deem necessary for the
• administration and preservation fine arts, performing arts,
historical, aesthetic and cultural aspects of the community.
(c) On behalf of the City, actively encourage programs for the
cultural enrichment of the community.
Authority of the Board of Library Trustees and City Arts Commission
Information on Related Foundations
Page 4
(d) Perform such other duties relating to the Arts as the City
Council may require. (As added by amendment effective June 6,
1974, and November 3, 1992.)
The Arts Commission has seven members, as established by City Council Resolution
in 1999. The current chair is Kathleen Harrison.
V. NEWPORT BEACH ARTS FOUNDATION
The Newport Beach Arts Foundation was officially incorporated August 7, 1998,
and held the first organizational meeting October 5, 1998, at which Directors were
appointed, officers elected, and Bylaws adopted. The Foundation has held eight
meetings of the Board of Directors since its incorporation for the purpose of
establishing goals and future planning. The Foundation has received $1,725 in
donations; no fundraising or Foundation sponsored events have been conducted.
City staff has provided clerical support for the Foundation.
The president of the Newport Beach Arts Foundation is Howard Herzog.
•
The purpose of the Arts Foundation, as indicated in the Articles of Incorporation, is
to further the objectives of the arts programs of the City of Newport Beach. The
Articles of Incorporation provide that the City Council has authority to approve (1) S
the disposition of any funds held by the Foundation upon dissolution; and (2) any
amendments to the Articles. Amendments to the Foundation Bylaws are also
subject to the approval of the City Council. The Bylaws also provide that all
meetings of the Board of Directors shall be open to the public in conformity with
the California Open Meeting Act.
The City Council has no appointive authority to the Board of Directors of the
Foundation. The Arts Commission, however, has appointive authority for three
Directors of the Foundation. The Chair of the Arts Commission and two Arts
Commissioners also serve as non - voting members of the Foundation Board.
The Articles of Incorporation and Bylaws are attached (Exhibits 5 and 6).
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EXHIBIT 1
• COOPERATING AGREEMENT
BETWEEN THE
NEWPORT BEACH PUBLIC LIBRARY BOARD OF LIBRARY TRUSTEES
AND THE
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
This Cooperating Agreement is entered into between the Board of Library Trustees of
the Newport Beach Public Library ( "Board of Library Trustees') and the Newport Beach
Public Library Foundation ( "Foundation "), effective February 1, 2000, and is the
culmination of a series of meetings, and other communications, between
representatives of both organizations which have identified the following matters
which provide the background for this Cooperating Agreement:
A. Each has the fervent desire to make the Newport Beach Public Library system
( "Library ") the best possible library for the community.
B. Each wants to carry out their affairs in such a way as to facilitate the Library
reaching its greatest potential.
C. Each recognizes the distinctly different roles of the other organization with the
Trustees setting policy and governing the Library on the one hand and the
Foundation raising funds for the Library from the community to provide the extra
margin of services not otherwise funded or available through taxes, on the other
40 hand.
D. Each recognizes that the other has domain over its role and that this separation of
roles and duties is in accord with current City policy and mutually beneficial.
E. Each recognizes the good will and competency that the other has achieved in
carrying out its respective role.
F. Each recognizes that while there is a separation of entities, mutual cooperation is
essential to the success of both.
G. Both intend that the changes regarding handling of funds, disbursements to the
Library, and financial statement formats outlined and specified in this agreement
will lead to a better understanding of the operations of the Foundation by the
Board of Library Trustees.
H. Both organizations will seek ways to enhance communications between the two
organizations.
I. In entering into this agreement each organization acknowledges the commitment
of the other to excellence of the Library and the positive effects that the efforts
of each body has had towards achieving this goal.
•
C
COOPERATING AGREEMENT •
Page 2
Therefore, the organizations agree as follows:
A. MANAGEMENT OF FUNDS AND FINANCIAL REPORTING
1. Funds (cash and investments) of the Endowment Fund will be kept separate
from all other Foundation funds. Funds and /or earnings of the Endowment
Fund shall not be used to pay the operating expenses of the Foundation with
the exception of those expenses referred to in Item D. 3.
2. Separate accounting shall be maintained in the books and records of the
Foundation to account for the financial activity of the Endowment Fund.
3. Foundation shall annually provide the Board of Library Trustees with a copy of
the investment policy prepared by investment managers retained by the
Foundation.
4. Prior to the beginning of each fiscal year, an annual revenue and expense
budget of the Foundation shall be provided to the Board of Library Trustees.
This budget shall separately indicate complete financial data of each of the
Foundation's accounting funds (operating, endowment, etc.).
5. By March Vt of each year, the Foundation will notify the Board of Library
Trustees of the anticipated amount of the Foundation's contribution for the
following fiscal year.
6. Monthly financial statements of the Foundation will be provided to the Board
of Library Trustees within 45 days following the end of each month. These
statements shall include, but are not Limited to, a balance sheet and income
statement (or equivalent statements). ALL statements shall separately indicate
financial information of each of the Foundation's accounting funds (operating,
endowment, etc.) and shall disclose assets, liabilities, equity, revenues, and
expenses in accordance with accepted accounting practices. In addition, a
schedule of investments shall also be provided quarterly with or as a part of
the monthly financial statements.
7. The annual independent audited financial report of the Foundation will be
provided to the Board of Library Trustees within 90 days following the end of
each fiscal year. This auditor's report shall be prepared in accordance with
generally accepted auditing standards. Any management recommendation
Letter accompanying this report shall also be provided.
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•
• COOPERATING AGREEMENT
Page 3
B. GENERAL COOPERATING PROCEDURES AND COSTS
1. Foundation annual budgeted operating expenses will not exceed 30% of the
total funds expected to be raised in that fiscal year, including membership
fees, but exclusive of funds raised for, and income derived from the
Endowment Fund.
2. Foundation solicitation materials shall be promptly reviewed prior to printing
by the Board of Library Trustees or their designee. Such materials shall
explain to donors the options of making unrestricted, restricted, Endowment
Fund or other gifts.
3. The Library will designate an area within the Central Library for the
Foundation administrative staff to operate and will make available the
equipment necessary to conduct normal business affairs, such as
telecommunications; Library postage meter; and Library copying equipment.
The Foundation will annually reimburse the Library and the City only for the
cost of telecommunications; use of Library postage meter; and use of Library
copying equipment.
C. DISBURSEMENT OF FUNDS
The Foundation will disburse to the Library on a quarterly basis the restricted
funds, (with a List of donor names), and the unrestricted funds received by the
Foundation, less the 30% annual budgeted operating expenses as identified in B.1.
The use of unrestricted funds to be determined by the Board of Library Trustees.
D. ENDOWMENT FUND AND ENDOWMENT CAMPAIGN
1. For clarity of accounting, the Endowment Fund shall be kept separate from
monies in the operating funds.
2. The end date for the current Endowment Campaign will be established by the
Foundation by December 31, 1999.
3. No Funds shall be taken from the Endowment Fund for operating costs of the
Foundation, other than those involved with direct managing, monitoring and
reporting.
4. Annual disbursement to the Library from the Endowment Fund shall be 5% of
. the market value of the total assets of the Fund at the end of the fiscal year.
5. Annual disbursements to the Library shall be made within 60 days of the end
of the fiscal year.
COOPERATING AGREEMENT
Page 4
6. When an Endowment Campaign is contemplated by the Foundation, plans and
timelines will be reviewed and jointly approved by the Board of Library
Trustees and the Foundation.
7. Campaign costs during the period of the Endowment Campaign shall not
exceed 30% of the Endowment Funds intended to be raised in that campaign.
8. The Foundation shall review the amount of the annual distribution from the
Endowment Fund every five years taking into account the intent of donors, the
investment experience of the Endowment Fund, overall economic conditions
and such other factors as the directors of the Foundation deem necessary in
discharging their fiduciary obligations with regard to the Endowment Fund.
E. COMMUNICATION
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1. The City's Community Services Director /City Librarian shall continue as an ex-
officio member of the Foundation's Board of Directors and be entitled to all •
rights and privileges offered to any other Foundation director except that of
voting.
2. In addition to monthly financial statements (mentioned in Section 1), minutes
of meetings of the Foundation's Board of Director's shall be forwarded to the
Community Services Director /City Librarian in a timely manner so that they
may be distributed to the Board of Library Trustees. In turn, minutes of all
Board of Library Trustees meetings shall be forwarded in a timely manner to
the Foundation for distribution as they deem appropriate.
3. Both the Board of Library Trustees and the Foundation Board of Directors shall
designate one or more of their members to regularly attend the publicly
noticed meeting of the other organization. It will be the responsibility of
these designated individuals to briefly report on their organization's activities,
discuss common goals, answer pertinent questions and report on projects
currently underway.
4. The above is not intended in any way to limit the communication between
Board of Library Trustees and the Foundation. To the contrary, every effort
shall be made by members of both organizations to attend the regularly
scheduled events of the other.
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•
• COOPERATING AGREEMENT
Page 5
F. CONCLUSION
This Cooperating Agreement is undertaken with the goal of attaining the greatest
degree of cooperation, communication and resulting synergy between Board of
Library Trustees of the Newport Beach Public Library and the Board of Directors of
the Newport Beach Public Library Foundation. The organizations agree that this
Cooperating Agreement be reviewed jointly every two years, beginning at the end
of fiscal year 2001/02, to assure that its purposes are being carried out and to
explore ways in which the communication between both organizations could be
enhanced.
Executed this 181h day of January, 2000, City of Newport Beach, California on behalf
of each organization by their respective duly authorized officers.
M
Board of Library Trustees
�1
L
Wood
Secretary 1,J " / Trustee
LN
Newport Beach Public Library Foundation
David Carmichael, President
•
J ie Ryan
Bob Knox
Trustee
1
Erroeir 2
RESTATED ARTICLES OF INCORPORATION •
OF
THE NEWPORT BEACH LIBRARY FOUNDATION
(henceforth to be known as THE NEWPORT BEACH PUBLIC LIBRARY FOUNDATION)
David R. Carmichael and James L Rubel, Jr. certify that:
1. They are President and Secretary, respectively, of The Newport Beach
Library Foundation (the Foundation), henceforth to be known as The Newport Beach Public
Library Foundation, a California nonprofit public benefit corporation.
2. The following restatement of the Foundation's Articles of Incorporation
has been approved by the Board of Directors:
Foundation.
The name of this corporation is The Newport Beach Public Library
II 0
A. 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 Corporation Law for charitable purposes.
B. The specific purpose of this corporation is to engage in the
solicitation, receipt, and administration of monies and other property, and from
time to time to disburse such monies and/or property and the income therefrom,
solely to or for the benefit of the City of Newport Beach Public Library, its
branches, and its related activities and services. Such disbursements shall be used
for the following and related purposes: (1) maintaining the central library of the
Newport Beach Public Library and the branches of the Newport Beach Public
Library, (2) renovation of facilities, (3) capital expenditures, (4) equipment
acquisition and maintenance, (5) acquisition, maintenance, repair and restoration
of books and other library materials, (6) staff education, (7) community programs,
(8) any other needs of the Newport Beach Public Library system; and (9)
operating expenses of the corporation.
is
10
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A. This corporation is organized and operated exclusively for
charitable purposes within the meaning of Section 501(c)(3) of the Internal
Revenue Code.
B. Notwithstanding any other provision of these articles, this
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 (b) by a corporation contributions to which are
deductible under Section 170(c)(2) of the Internal Revenue Code.
C. 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 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.
IV
• 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 the Orange County
Community Foundation to establish an endowment fund, the income from which
shall be distributed annually to or for the benefit of the City of Newport Beach
Public Library.
3. The Foundation has no members.
David R. Carmichael, President
• James L -kubel, Jr., Secretary
6;.
2
Each of the foregoing hereby declares under penalty of penalty that the •
statements contained in the foregoing certificate are true and correct of his or her own
knowledge, and that this declaration was executed on January 13, 2000, at Newport
Beach, California.
ae-z-
David R. Carmichael
James. L. Rubel, Jr.
•
1]
3 1 )-
•
BYLAWS
of
THE NEWPORT BEACH LIBRARY FOUNDATION
a California nonprofit public benefit corporation
•
EXHIBIT 3
/3
TABLE OF CONTENTS
Page
ARTICLE I - OFFICES ........................................................................... ............................... 2
Section 1.1 Principal Office ..................................................... ............................... 2
Section 1.2 Other Office .......................................................... ............................... 2
ARTICLE 2 - MEMBERSHIP ................................................................. ............................... 2
Section 2.1 No Statutory Members .......................................... ............................... 2
Section2.2 Members ............................................................... ............................... 2
Section 2.3 Memberships .......................................................... ............................... 2
ARTICLE3 - DIRECTORS ..................................................................... ............................... 3
9
SectionJ. I
Powers ................................................................... ...............................
3
Section 3.2
Number of Directors ............................................. ...............................
3
Section 3.3
Selection and Term of Office ................................ ...............................
4
Section 3.4
Interested Persons ................................................. ...............................
4
Section 3.5
Transactions in Which Directors Have Personal Interest ....................
5
Section 3.6
Section3.7
Resignation and Vacancies ................................... ...............................
Removal ................................................................ ...............................
6 •
6
Section 3.8
Place of Meeting ................................................... ...............................
7
Section 3.9
Annual Meetings ................................................... ...............................
7
Section 3.10
Regular Meetings .................................................. ...............................
7
Section 3.1 I
Special Meetings ................................................... ...............................
7
Section3.12
Notice .................................................................... ...............................
7
Section3.13
Quorum ................................................................. ...............................
7
Section 3.14
Participation in Meetings by Conference Telephone ...........................
8
Section 3.15
Waiver of Notice ................................................... ...............................
8
Section J. 16
Adjournment ......................................................... ...............................
8
Section 3.17
Action Without Meeting ....................................... ...............................
8
Section 3.18
Rights of Inspection .............................................. ...............................
8
Section 3.19
Executive Committee ............................................ ...............................
8
Section 3.20
Standing or Special Committees ........................... ...............................
9
Section 3.21
Limitations upon Committees of the Board .......... ...............................
9
Section 3.22
Advisory Commissions ......................................... ...............................
10
Section 3.23
Fees and Compensation ........................................ ...............................
10
Section 3.24
Supermajority Approval Required ........................ ...............................
10
ARTICLE4 - OFFICERS ......................................................................... ............................... I I
Section4.1 Officers ................................................................. ............................... 11
Section4.2 Election ................................................................. ............................... 11 •
Section 4.3 Additional Officers ............................................... ............................... 11
i
I I.
Section 4.4
Removal and Resignation ..........................
Section 4.5
Vacancies .................... ...............................
Section 4.6
Chairman of the Board ...............................
Section 4.7
President ...................... ...............................
Section 4.8
Vice Presidents ............ ...............................
Section 4.9
Secretary ..................... ...............................
Section 4.10
Chief Financial Officer ..............................
Section 4.11
Assistant Treasurers and Secretaries ..........
Section 4.12
Executive Director ...... ...............................
Section 4.13
Compensation ............. ...............................
....... 15
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Page
ARTICLE 5 - OTHER PROVISIONS ..................................................... ............................... 14
Section 5.1
Endorsement of Documents; Contracts ................ ...............................
14
Section 5.2
Representation of Shares of Other Corporations ............................
:.... 14
Section 5.3
Construction and Definitions ................................ ...............................
14
Section 5.4
Amendments ......................................................... ...............................
15
Section 5.5
Maintenance of Certain Records ........................... ...............................
15
Section5.6
Annual Report ....................................................... ...............................
15
Section 5.7
Annual Statement of Certain Transactions and Indemnifications
....... 15
ARTICLE 6 - INDEMNIFICATION ....................................................... ............................... 16
Section6.1
Definitions ............................................................. ...............................
16
Section 6.2
Indemnification in Actions by Third Parties ......... ...............................
16
Section 6.3
Indemnification in Actions by or in the Right of the Corporation .......
17
Section 6.4
Indemnification Against Expenses ....................... ...............................
17
Section 6.5
Required Determinations ...................................... ...............................
18
Section 6.6
Advance of Expenses ............................................ ...............................
18
Section 6.7
Other Indemnification ........................................... ...............................
18
Section 6.8
Forms of Indemnification Not Permitted .............. ...............................
18
Section6.9
Insurance ............................................................... ...............................
18
Section 6.10
Nonapplicability to Fiduciaries of Employee Benefit Plans ................
19
ARTICLE 7 - DISPOSITION OF FUNDS .............................
ii
. ............................... 19
�S
0
BYLAWS
of
The Newport Beach Library Foundation,
a California nonprofit public benefit corporation
ARTICLE 1
OFFICES
Section 1.1 Principal Office. The Corporation's principal office shall be fixed
and located at such place as the Board of Directors (the "Board ") shall determine. The Board is
granted full power and authority to change said principal office from one location to another.
Section 1.2 Other Offices. Branch or subordinate offices may be established at
any time by the Board at any place or places.
ARTICLE 2
MEMBERSHIP
Section 2.1 No Statutory Members. The Corporation shall have no members •
as defined in Section 5056 of the California Nonprofit Corporation Law (the "Law "). Any action
which would otherwise require approval by a majority of all members or approval by the members
shall require only approval of the Board. All rights which would otherwise vest in the members
shall vest in the directors.
Section 2.2 Members. Nothing in this Article 2 shall be construed as limiting
the right of the Corporation to refer to persons associated with it as "members" even though such
persons are not members, and no such reference shall constitute anyone a member within the
meaning of Section 5056 of the California Nonprofit Corporation Law (the "Law "). The
Corporation may confer by amendment of its Articles or of these Bylaws some or all of the rights
of a member, as set forth in the Law, upon any person or persons who do not have the right to vote
for the election of directors or on a disposition of substantially all of the assets of the Corporation
or on a merger or on a dissolution or on changes to the Corporation's Articles of Incorporation (the
"Articles ") or Bylaws, but no such person shall be a member within the meaning of said Section
5056.
Section 2.3 Memberships. Memberships shall be divided into two (2) classes:
Regular and Honorary.
(a) Regular Memberships. Regular Members are those persons making an
annual contribution in an amount established, from time to time, by the Board of Directors. Upon
paying the amount, a person shall be a member for one (1) year commencing on the date of .
contribution and ending one (1) year later. Regular members renewing their annual memberships
will be considered as having renewed as of the most recent prior expiration date of their
membership within the previous year, regardless of when the contribution is actually received.
Members shall also be entitled to make their annual contributions in advance of the end of their
membership year to apply toward the next year.
(b) Honorary Memberships. Honorary members are those persons who have
been designated as such by a majority of the Board of Directors acting at a regular meeting, or a
special meeting called for the purpose of designating such a person. Honorary members may be
business organizations. No contributions shall be required for Honorary membership.
(c) Miscellaneous. Memberships are not transferable. A husband and wife
may together constitute a "member ".
ARTICLE 3
DIRECTORS
Section 3.1 Powers. Subject to the Limitations of the Articles and these
Bylaws, the activities and affairs of the Corporation shall be conducted and all corporate powers
shall be exercised by or under the direction of the Board. The Board may delegate the management
of the activities of the Corporation to any person or persons, a management company or
committees, however composed, provided that the activities and affairs of the Corporation shall be
managed and all corporate powers shall be exercised under the ultimate direction of the Board.
• Without prejudice to such general powers, but subject to the same limitations, it is hereby
expressly declared that the Board shall have the following powers in addition to the other powers
enumerated in these Bylaws:
(a) To select and remove all officers, agents and employees of the Corporation,
prescribe powers and duties for them as may not be inconsistent with Law, the Articles or these
Bylaws, fix their compensation and require from them such security, if any, for faithful service as
the Board may deem appropriate.
(b) To conduct, manage and control the affairs and activities of the Corporation,
and to make such rules and regulations therefor not inconsistent with Law, the Articles or these
Bylaws, as they may deem appropriate.
(c) To adopt, make and use a corporate seal and to alter the form of such seal
from time to time as they may deem appropriate.
(d) To borrow money and incur indebtedness for the purposes of the
Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory
notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of
debt and securities therefor.
Section 3.2 Number of Directors. The authorized number of directors shall be
. not less than three (3) nor more than twenty-five (25) until changed by amendment of the Articles
or these Bylaws. The exact number of directors shall be fixed, within the limits specified, by
resolution duly adopted by the Board. The initial number of directors shall be eighteen (l8) until
3 r/
changed as provided in this Section. Directors shall have an affiliation with the Newport Beach w
community.
Section 3.3 Selection and Term of Office.
(a) In an organizational meeting of the Board, following the adoption of these
Bylaws, the Board shall divide itself into three groups of as nearly equal size as possible. The
terms of office for each group of directors shall be staggered. The first group of directors shall
hold office until the next following annual meeting of the Board, the second group shall hold office
until the second following annual meeting of the Board, and the third group shall hold office until
the third following annual meeting of the Board. Thereafter the directors in each group shall hold
office until the third ensuing annual meeting of the Board following their election and until their
respective successors are elected and qualified. At each annual meeting of the Board, a number of
directors shall be elected by the entire Board equal to the number of directors whose terms shall
have expired at the time of such meeting, unless the authorized number of directors has been
changed by amendment or resolution pursuant to Section 3.2, in which case the number of
directors to be elected shall be equal to the number so determined pursuant to Section 3.2.
(b) In addition to the directors selected pursuant to Section 3.3(a), there shall
be at least one (1) ex- officio director designated by the Board, who shall be the City Librarian of
the City of Newport Beach. The Board may, from time to time, by majority vote, designate •
persons other than the City Librarian as ex- officio directors. Each ex- officio director shall hold
office until he or she resigns or is removed by the Board. Ex- officio directors shall have the
right to notice of all meetings of the Board, and to attend and participate in all meetings of the
Board except when the Board meets in executive session for voting members only. Ex- officio
directors shall not vote, be counted toward a quorum of the Board or nominate directors for
election to the Board.
Section 3.4 Interested Persons. Not more than 49 percent of the persons
serving on the Board at any time may be interested persons. For purposes of this Section 3.4, an
interested person is:
(a) Any person being compensated by the Corporation for services rendered to
it within the previous twelve months, whether as a full -time or part-time employee, independent
contractor, or otherwise, excluding any reasonable compensation paid to a director as a director; or
(b) Any brother, sister, ancestor, descendant, spouse, brother -in -law, mother -
in -law, or father -in -law of any such person.
Any violation of the provisions of this Section 3.4 shall not affect the validity or enforceability of
any transaction entered into by the Corporation.
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4 /8
• Section 3.5 Transactions in Which Directors Have Personal Interest.
(a) Any transaction of the Corporation in which any of its directors have a
material financial interest shall be entered into or consummated only if-.
(1) The transaction is fair and reasonable as to the Corporation
at the time the Corporation enters into the transaction;
(2) The Corporation enters into the transaction for its own
benefit; and
(3) Prior to consummating the transaction or any part thereof
the Board authorizes or approves the transaction in good faith by a vote of the
majority of the directors then in office without counting the vote of the interested
director or directors (although such director or directors may be counted for
purposes of determining the presence of a quorum at the meeting at which such
action is taken), and with knowledge of the material facts concerning the
transaction and director's interest in the transaction.
(b) If it is not reasonably practicable to obtain such approval by the Board
prior to entering into the transaction, a committee or person authorized by the Board may
approve the transaction in a manner consistent with the standards of Section 15(a); provided,
• however, that at its next meeting the Board:
(1) Determines that it was not reasonably practicable to obtain
approval by the Board prior to entering into the transaction;
(2) Determines that the committee or person authorized by the
Board approved the transaction in the required manner; and
(3) Ratifies the transaction by a vote of the majority of the
directors then in office without counting the vote of the interested director or
directors (although such director or directors may be counted for purposes of
determining the presence of a quorum at the meeting at which such action is taken).
(c) Sections 3.5(a) and 3.5(b) shall not apply to:
(1) An action of the Board fixing the compensation of a director
as a director or officer of the Corporation;
(2) A transaction which is part of a public or charitable program of the
Corporation if it:
G) Is approved or authorized by the Corporation in
good faith and without unjustified favoritism; and
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(ii) Results in a benefit to one or more directors or their
families because they are in the class of persons intended to be benefited by
the public or charitable program.
(3) A transaction of which the interested director or directors
have no actual knowledge and which does not exceed the lesser of one percent of
the gross receipts of the Corporation for the preceding fiscal year or $100,000.
(d) Any contract or other transaction (other than transactions subject to Sections
3.5(a) or Section 3.5(c) above) between the Corporation and any corporation, firm, association, or
entity of which one or more of this Corporation's directors are directors shall be entered into or
consummated only if:
(1) The material facts relating to the transaction and to such
director's other directorship are fully disclosed or known to the Board or committee,
and the Board or committee authorizes, approves or ratifies the contract or
transaction in good faith by a vote sufficient without counting the vote of the
common director or directors: or
(2) The contract or transaction is just and reasonable as to the
Corporation at the time it is authorized, approved or ratified.
Section 3.6 Resignation and Vacancies. •
(a) Subject to the provisions of Section 5226 of the Law, any director may
resign effective upon giving written notice to the Chairman of the Board, the President, the
Secretary or the Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may be selected before such
time, to take office when the resignation becomes effective.
(b) A vacancy on the Board shall be deemed to exist in case of the death,
resignation or removal of any director or an increase in the authorized number of directors.
Vacancies on the Board shall be filled in the same manner as the director whose office is vacant
was selected, provided that any vacancy to be filled by election by directors may be filled by a
majority of the remaining directors, although less than a quorum, or by a sole remaining director at
any regular or special meeting of the Board. Each director so selected shall hold office until the
expiration of the term of the replaced director and until a successor has been selected and qualified.
Section 3.7 Removal. Any director or directors may be removed from office
without cause if such removal is approved by a majority of the directors then in office. The Board
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 court or judgment of any court to have
breached any duty arising under Sections 5230 through 5238 of the Law. No reduction of the
authorized number of directors shall have the effect of removing any director prior to the •
expiration of the director's term of office.
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Section 3.8 Place of Meetine. Meetings of the Board shall be held at any place
within or without the State of California which has been designated from time to time by the
Board. In the absence of such designation, regular meetings shall be held at the principal office of
the Corporation.
Section 3.9 Annual Meetings. The Board shall hold an annual meeting for the
purposes of organization, selection of directors and officers and the transaction of other business.
Annual meetings of the Board shall be held on such dates and at such times as may be fixed by the
Board.
Section 3.10 Regular Meetings. Regular meetings of the Board may be held
without call or notice on such dates and at such times as may be fixed by the Board.
Section 3.11 Special Meetings. Special meetings of the Board for any purpose
or purposes may be called at any time by the Chairman of the Board, the President, the Vice
President, the Secretary or any two directors.
Section 3.12 Notice.
(a) Annual and special meetings of the Board shall be held upon at least four
days' notice by first -class mail or forty -eight hours' notice given personally or by telephone,
• facsimile, telex or other similar means of communication. Any such notice shall be addressed or
delivered to each director at such director's address as it is shown upon the records of the
Corporation or as may have been given to the Corporation by the director for purposes of notice or,
if such address is not shown on such records or is not readily ascertainable, at the place where the
meetings of the directors are regularly held.
(b) Notice by mail shall be deemed to have been given at the time a written
notice is deposited in the United States mails, postage prepaid. Any other written notice shall be
deemed to have been given at the time it is personally delivered to the recipient or is delivered to a
common carrier for transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed to have been given at the time it is
communicated, in person or by telephone, to the recipient or to a person at the office of the
recipient who the person giving the notice has reason to believe will promptly communicate it to
the receiver.
Section 3.13 Quorum. One -third (1/3) of the number of directors then serving
constitutes a quorum of the Board for the transaction of business, except to adjourn as provided in
Section 3.16. 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 shall be regarded as the act of the Board, unless a greater
number be required by law, by these Bylaws or by the Articles, and except as provided in the next
sentence. A meeting at which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority
• of the required quorum for such meeting.
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Section 3.14 Participation in Meetings by Conference Telephone. Directors
may participate in a meeting of the Board, or a committee meeting, through use of a conference
telephone or similar communications equipment, so long as all members participating in such
meeting can hear one another.
Section 3.15 Waiver of Notice. Notice of a meeting need not be given to any
director who signs a waiver of notice or a written consent to holding the meeting or an approval of
the minutes thereof, whether before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to such director. All such
waivers, consents and approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
Section 3.16 Adiournment. A majority of the directors present, whether or not a
quorum is present, may adjourn any directors' meeting to another, time and place. Notice of the
time and place of holding an adjourned meeting need not be given to absent directors if the time
and place be fixed at the meeting adjourned, except as provided in the next sentence. If the meeting
is adjourned for more than twenty -four hours, reasonable notice of any adjournment to another
time or place shall be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment
Section 3.17 Action Without Meeting. Any action required or permitted to be
taken by the Board may be taken without a meeting if all members of the Board shall individually
or collectively consent in writing to such action. Such consent or consents shall have the same
effect as a unanimous vote of the Board and shall be filed with the minutes of the proceedings of
the Board.
Section 3.15 Rights of Inspection. Every director shall have 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 Corporation.
Section 3.19 Executive Committee.
(a) The Board may, by resolution adopted by a majority of the number of
directors then in office, establish an executive committee consisting of such number of directors as
may be determined by the Board which, except when the Board is in session, and except as its
powers may be otherwise limited by the Board shall have and may exercise the powers of the
Board in the management of the business and affairs of the Corporation and may authorize the seal
of the Corporation to be affixed to all papers which may require it. The executive committee shall
also have the power of general supervision, management, and control of the business of the
Corporation and over its several officers.
(b) Appointments to the executive committee shall be by a majority vote of the
directors then in office. A majority of all the members of the executive committee may determine
its rules of procedure unless the Board shall otherwise provide. The Board shall have the power to •
change the members of the executive committee at any time, either with or without cause and to fill
vacancies; provided that all appointments to the executive committee shall be by a majority vote of
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the directors then in office. Any action which under the provisions of the Law may be taken at a
meeting of the executive committee, may be taken without a meeting if authorized by a writing
signed by all members of the executive committee who would be entitled to vote at a meeting for
such purpose and filed with the Secretary of the Corporation. The executive committee shall meet
prior to the Board meetings to set the agenda and review any matters it deems appropriate.
Section 3.20 Standing or Special Committees.
(a) The term "standing committee" or "special committee" shall mean any
committee appointed by the Board which is authorized by specific delegation, without further
Board action, to make and implement decisions on behalf of the Board, or to implement, with some
degree of discretion, decisions of the Board pursuant to guidelines established by the Board. Notice
of, and procedures for, meetings of standing or special committees shall be as prescribed by the
chairman of each such standing or special committee, and meetings of standing 'or special
committees may be called by the Board or the chairman of the standing or special committee.
(b) In the event that the Board determines that the management of the
Corporation would be benefited by the establishment of one or more standing or special
committees in addition to the executive committee, the Board, may from time to time establish one
or more such committees. The establishment of a standing or special committee shall be effected
by a resolution of the Board approved by the vote of the majority of the directors then in office,
• which specifically sets forth the powers and duties delegated to such committee. Each such
committee shall consist of two or more directors and shall be presided over by a director selected
by the Board.
Section 3.21 Limitations upon Committees of the Board.
(a) No committee of the Board shall have any of the authority of the Board
with respect to:
(1) the filling of vacancies on the Board or on any committee
which has the authority of the Board;
(2) the fixing of compensation of the directors for serving on
the Board or on any committee which has the authority of the Board;
(3) the amendment or repeal of Bylaws or the adoption of new
Bylaws;
(4) the amendment or repeal of any resolution of the Board
which by its express terms is not so amendable or repealable;
(5) the appointment of other committees of the Board or the
members thereof if such committee will have the authority of the Board;
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(6) the expenditure of corporate funds to support a nominee for
director after there are more people nominated for director than can be elected; or
(7) the approval of any self - dealing transaction, except that
when it is not reasonably practicable to obtain approval of the Board prior to
entering into such a transaction, a committee authorized by the Board may approve
the transaction in a manner consistent with the standards set forth in Section
5233(d) of the Law subject to ratification by a majority of the directors then in
office (without counting the vote of any interested director) at the next meeting of
the Board.
(b) The Board shall have the power to prescribe the manner in which
proceedings of any committee of the Board shall be conducted. In the absence of any such
prescription, such committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board shall otherwise provide, the regular and special meetings and
other actions of any committee of the Board shall be governed by the provisions of this Article 3
applicable to meetings and actions of the Board. Minutes shall be kept of each meeting of each
committee. Written and/or verbal reports from individual committees shall be made at the next
ensuing meeting of the Board.
Section 3.22 Advisory Commissions. The Chairman of the Board, the President,
the Board or the executive committee (if there be such a committee) may from time to time appoint •
such advisory commissions as deemed appropriate, consisting of directors or persons who are not
directors, but such advisory commissions shall not be deemed committees of the board and shall
not exercise any powers of the Board. Advisory commissions may only investigate, deliberate and
make recommendations to the Board. Notice of, and procedures for, meetings of advisory
commissions shall be as prescribed by the chairman of each such advisory committee, and
meetings of advisory commissions may be called by the Chairman of the Board, the Board, the
executive committee, the President or the chairman of the advisory commission.
Section 3.23 Fees and Compensation. Directors or members of committees or
commissions shall receive no compensation for their services as such. The directors shall be
entitled to reimbursement for expenses, as may be fixed or determined by the Board. This
Corporation shall not make any loan of money or property to, or guarantee the obligation of, any
director or officer, unless approved by the Attorney General; provided, however, that the
Corporation may advance money to a director or officer of the Corporation for expenses
reasonably anticipated to be incurred in the performance of the duties of such officer or director,
provided that in the absence of any such advance, such director or officer would be entitled to be
reimbursed for such expenses by the Corporation. Subject to the provisions of Section 3.4, nothing
contained in this Section 3.23 shall be construed to preclude any director from serving the
Corporation in any other capacity as an officer, agent, employee or otherwise, and receiving
compensation therefor.
Section 3.24 Supermaiority Approval Required. Notwithstanding anything
contained in these Bylaws, action on the following matters shall be effective only if approved by
two- thirds (2/3) of those directors present at a meeting at which a quorum is present:
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(a) Amendment of these Bylaws (subject to the provisions of Section 5.4);
(b) Amendment of the Articles;
(c) A change in the general character of the operations of the Corporation;
(d) The purchase, sale, mortgage or lease of real property of the Corporation
or the sale of all or substantially all of its assets;
(e) Consolidation of the Corporation with another corporation; and
(f) Dissolution of the Corporation.
ARTICLE 4
OFFICERS
Section 4.1 Officers. The officers of the Corporation shall be a President, a
Vice - President, a Secretary, Chief Financial Officer, Assistant Treasurers and Assistant Secretaries
(if any) and the chairmen of the standing committees (if any). The Corporation may also have, at
• the discretion of the Board, an Executive Director, a Chairman of the Board, and such other
officers as may be elected or appointed in accordance with the provisions of Section 4.3.
Section 4.2 Election. The officers of the Corporation, except such officers as
may be elected or appointed in accordance with the provisions of Section 4.3 or Section 4.5, shall
be chosen annually by, and shall serve at the pleasure of, the Board, and shall hold their respective
offices until their resignation; removal, or other disqualification from service, or until their
respective successors shall be elected.
Section 4.3 Additional Officers. The Board may elect, and may empower the
President to appoint (except as set forth in Section 4.12), such other officers as the business of the
Corporation may require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these Bylaws or as the Board may from time to time
determine.
Section 4.4 Removal and Resignation.
(a) Any officer may be removed, either with or without cause, by the Board at
any time or, except in the case of an officer chosen by the Board, by any officer upon whom such
power of removal may be conferred by the Board. Any such removal shall be without prejudice to
the rights, if any, of the officer under any contract of employment of the officer.
• (b) Any officer may resign at any time by giving written notice to the
Corporation, but without prejudice to the rights, if any, of the Corporation under any contract to
which the officer is a party. Any such resignation shall take effect at the date of the receipt of such
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notice or at any later time specified therein and, unless otherwise specified therein, the acceptance •
of such resignation shall not be necessary to make it effective.
Section 4.5 Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filled in the manner prescribed in these
Bylaws for regular election or appointment to such office, provided that such vacancies shall be
filled as they occur and not on an annual basis.
Section 4.6 Chairman of the Board. The Chairman of the Board, if there be
such an officer, shall, if present, preside at all meetings of the Board and exercise and perform such
other powers and duties as may be from time to time assigned by the Board.
Section 4.7 President. Subject to such powers, if any, as may be given by the
Board to the Chairman of the Board, if there be such an officer, the President is the general
manager and chief executive officer of the Corporation and has, subject to the control of the Board,
general supervision, direction and control of the business and officers. The President shall be
elected from among the directors of the Corporation. In the absence of the Chairman of the Board,
or if there be none, the President shall preside at all meetings of the Board. The President has the
general powers and duties of management usually vested in the office of president and general
manager of a corporation and shall have such other powers and duties as may be prescribed by the
Board.
Section 4.8 Vice Presidents. In the absence or disability of the President, the •
Vice Presidents, in order of their rank as fixed by the Board or, if not ranked, the Vice President
designated by the Board, shall perform all the duties of the President and, when so acting, shall
have all the powers of, and be subject to all the restrictions upon, the President. The Vice
Presidents shall have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the Board.
Section 4.9 Secretary. The Secretary shall keep or cause to be kept, at the
principal office or such other place as the Board may order, a book of minutes of all meetings of
the Board and its committees, with the time and place of holding, whether regular or special, and if
special, how authorized, the notice thereof given, the names of those present at Board and
committee meetings, and the proceedings thereof The Secretary shall keep, or cause to be kept, at
the principal office in the State of California the original or a copy of the Corporation's Articles and
Bylaws, as amended to date. The Secretary shall give, or cause to be given, notice of all meetings
of the Board and any committees thereof required by law or by these Bylaws to be given, shall
keep the seal of the Corporation in safe custody, and shall have such other powers and perform
such other duties as may be prescribed by the Board.
Section 4.10 Chief Financial Officer. The Board shall designate a person, who
need not be a member of the Board, to serve as the Chief Financial Officer of the Corporation. The
Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and
correct accounts of the properties and business transactions of the Corporation. The books of •
account shall at all times be open to inspection by any director. The Chief Financial Officer shall
deposit all moneys and other valuables in the name and to the credit of the Corporation with such
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• depositaries as may be designated by the Board. The Chief Financial Officer shall disburse the
funds of the Corporation as may be ordered by the Board, shall render to the President and the
directors, whenever they request it, an account of all transactions as Chief Financial Officer and of
the financial condition of the Corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board. The Chief Financial Officer shall give a bond for
the faithful discharge of his duties in such sum and with such surety as the Board shall determine.
Section 4.11 Assistant Treasurers and Secretaries. The Assistant Treasurers
and the Assistant Secretaries, if there be such officers, shall perform such duties as shall be
assigned to them by the Chief Financial Officer, the Secretary, or the Board.
Section 4.12 Executive Director. The corporation may, in the Board's
discretion, employ an Executive Director of the Corporation. The Executive Director shall be
selected by the Board and shall serve until he or she resigns or is removed by the Board. The
Executive Director may attend meetings of the Board, but may not vote. The Executive Director
shall be an employee of the Corporation and shall have general overall supervision of all the
business affairs of the Corporation subject to the policies, approval and control of the Board, as set
forth herein. The responsibilities of the Executive Director shall include, but not be limited to, the
following:
(a) Long -range planning.
(b) Making policy proposals to the Board.
(c) Assigning overall responsibility for corporate management.
(d) The day -to -day administration of the Corporation.
(e) Employment of professional consultants, including, without
limitation, attorneys, accountants and professional fundraisers.
(f) Selection, employment, control, and discharge of employees; and,
subject to the approval of the Board, development and maintenance of personnel policies
and practices for the Corporation.
(g) Supervision of the business affairs of the Corporation so as to
insure that funds are collected and expended to the best possible advantage.
(h) Acting as a representative of the Corporation to governmental and
voluntary organizations.
(i) Preparing an annual budget and periodic reporting on the financial
affairs of the Corporation to the Board.
(j) Maintenance of the physical properties of the Corporation in a
good state of repair and good operating condition.
I J 9�
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(k) Performance of other duties, as specified by the Board, that may be
necessary or appropriate in the best interests of the Corporation.
(1) Reporting to the Board on the performance of corporate functions.
The Board of Directors may require the Executive Director to give a bond for the
faithful discharge of the Executive Director's duties in such sum and with such surety as the Board
shall determine. The Executive Director shall be compensated in an amount to be detem-tined by
the Board. The amount of the compensation of the Executive Director shall be reviewed and
adjusted annually, or at such shorter intervals as the Board shall determine.
Section 4.13 Compensation. The officers, other than the Executive Director,
shall receive no compensation for their services as such. The officers shall be entitled to
reimbursement for expenses in accordance with corporate policy.
ARTICLE 5
OTHER PROVISIONS
Section 5.1 Endorsement of Documents; Contracts. Subject to the provisions
of applicable law, any note, mortgage, evidence of indebtedness, contract, conveyance or other •
instrument in writing and any assignment or endorsement thereof executed or entered into between
the Corporation and any other person, when signed by the Chairman of the Board, the President or
any Vice President and the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Corporation shall be valid and binding on the Corporation in the absence of actual
knowledge on the part of the other person that the signing officers had no authority to execute the
same. Any such instruments may be signed by any other person or persons and in such manner as
from time to time shall be determined by the Board, and, unless so authorized by the Beard, 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 for any purpose or amount.
Section 5.2 Representation of Shares of Other Corporations. The President,
or any other officer or officers authorized by the Board or the President, are each authorized to
vote, represent and exercise on behalf of the Corporation all rights incident to any and all shares of
any other corporation or corporations standing in the name of the Corporation. The authority
herein granted may be exercised either by such officer in person or by any other person authorized
to do so by proxy or power of attorney duly executed by said officer.
Section 5.3 Construction and Definitions. Unless the context otherwise
requires, the general provisions. rules of construction and definitions contained in the General
Provisions of the California Nonprofit Corporation Law and in the California Nonprofit Public
Benefit Corporation Law shall govern the construction of these Bylaws.
u
14 ��
• Section 5.4 Amendments. These Bylaws may be amended or repealed by the
approval of the Board in accordance with Section 3.24, except that the requirement as set forth in
Section 33(b) that the City Librarian of the City of Newport Beach be an ex- officio director may
not be amended or repealed without the unanimous consent of the Board.
Section 5.5 Maintenance of Certain Records. The accounting books, records,
minutes of proceedings of the Board and the Executive Committee 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 business office of the Corporation. The minutes shall be kept in written or typed form,
and the accounting books and records shall be kept either in written or typed form, or in any other
form capable of being converted into written, typed or printed form. -
Section 5.6 Annual Report. The Board shall cause an annual report to be
furnished to the directors not later than 120 days after the close of the Corporation's fiscal year.
The annual report shall be accompanied by any report thereon of independent accountants or, if
there is no such accountant's 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. The
annual report shall contain in appropriate detail the following:
(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; and
(e) Any information required by Section 5.7 of these Bylaws.
Section 5.7 Annual Statement of Certain Transactions and Indemnifications.
(a) The Corporation shall furnish annually to its directors a statement of any
covered transaction or indemnifications described below, if such covered transaction or
indemnification took place. Such annual statement shall be affixed to and sent with the annual
report described in Section 5.6 of these Bylaws. A covered transaction under this Section 5.7 is a
transaction in which the Corporation was a party, and in which either of the following interested
persons had a direct or indirect material financial interest (excluding a mere common directorship):
• subsidiary.
(l) Any director or officer of the Corporation, or its parent or
15
(2) Any holder of more than 10 percent of the voting power of •
the Corporation, its parent or its subsidiary.
(b) The statement required by this Section 5.7 shall describe briefly:
(1) Any covered transaction (including compensation of officers
and directors) during the previous fiscal year involving more than $50,000, or
which was one of a number of covered transactions in which the same interested
persons had a direct or indirect material financial interest and which transactions in
the aggregate involve more than $50,000.
(2) The names of the interested persons involved in such
transactions, stating such person's relationship to the Corporation, the nature of such
person's interest in the transaction, and, where practicable, the amount of such
interest; provided that in the case of a transaction with a partnership of which such
person is a partner, only the interest of the partnership need be stated.
(3) The amount and circumstances of any indemnifications or
advances aggregating more than $10,000 paid during the fiscal year to any officer
or director of the Corporation pursuant to Article 6 of these Bylaws.
ARTICLE 6 •
INDEMNIFICATION
Section 6.1 Definitions. For the purposes of this Article 6, the following
definitions shall apply:
(a) "agent" means any person who is or was a director, officer,
employee or other agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise, or was a director, officer,
employee or agent of a foreign or domestic corporation which was a predecessor
corporation of the Corporation or of another enterprise at the request of such predecessor
corporation;
(b) "proceeding" means any threatened, pending or completed action
or proceeding, whether civil, criminal, administrative or investigative; and
(c) "expenses" includes without limitation attorneys' fees and any
expenses of establishing a right to indemnification under Sections 6.4 or 6.5(b).
Section 6.2 Indemnification in Actions by Third Parties. The Corporation
shall, to the maximum extent permitted by law, indemnify any person who was or is a party or is •
threatened to be made a party to any proceeding, (other than an action by or in the right of the
Corporation to procure a judgment in its favor, an action brought under Section 5233 of the Law,
16
or an action brought by the Attorney General or a person granted relator status by the Attorney
General for any breach of duty relating to assets held in charitable trust) by reason of the fact that
such person is or was an agent of the Corporation, against expenses, judgments, fines, settlements
and other amounts actually and reasonably incurred in connection with such proceeding if such
person acted in good faith and in a manner such person reasonably believed to be in the best
interests of the Corporation and, in the case of a criminal proceeding, had not reasonable cause to
believe the conduct of such person was unlawful. The termination of any proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself,
create a presumption that the person did not act in good faith and in a manner which the person
reasonably believed to be in the best interests of the Corporation or that the person had reasonable
cause to believe that the person's conduct was unlawful.
Section 6.3 Indemnification in Actions by or in the Right of the
Corporation. The Corporation shall, to the maximum extent permitted by law, indemnify any
person who was or is a party or is threatened to be made a party to any threatened, pending or
completed action by or in the right of the Corporation, or brought under Section 5233 of the Law,
or brought by the Attorney General or a person granted relator status by the Attorney General for
breach of duty relating to assets held in charitable trust, to procure a judgment in its favor by
reason of the fact that such person is or was an agent of the Corporation, against expenses actually
and reasonably incurred by such person in connection with the defense or settlement of such action
if such person acted in good faith, in a manner such person believed to be in the best interests of
the Corporation and with such care, including reasonable inquiry, as an ordinarily prudent person
in a like position would use under similar circumstances. No indemnification shall be made under
this Section 6.3:
(a) In respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation in the performance of such person's duty
to the Corporation, unless and only to the extent that the court in which such proceeding is
or was pending shall determine upon application that, in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for the expenses which
such court shall determine;
(b) Of amounts paid in settling or otherwise disposing of a threatened or
pending action, with or without court approval; or
(c) Of expenses incurred in defending a threatened or pending action
which is settled or otherwise disposed of without court approval, unless it is settled with the
approval of the Attorney General.
Section 6.4 Indemnification Against Expenses. To the extent that an agent of
the Corporation has been successful on the merits in defense of any proceeding referred to in
Sections 6.2 or 6.3 or in defense of any claim, issue or matter therein, the agent shall be
indemnified against expenses actually and reasonably incurred by the agent in connection
• therewith
17 DI
Section 6.5 Required Determinations. Except as provided in Section 6.4, any •
indemnification on this Article 6 shall be made by the Corporation only if authorized in the specific
case, upon a determination that indemnification of the agent is proper in the circumstances because
the agent has met the applicable standard of conduct set forth in Sections 6.2 or 6.3, by:
(a) A majority vote of a quorum consisting of directors who are not
parties to such proceeding; or
. (b) The court in which such proceeding is or was pending upon
application made by the Corporation or the agent or the attorney or other person rendering
services in connection with the defense, whether or not such application by the agent,
attorney or other person is opposed by the Corporation.
Section 6.6 Advance of Expenses. Expenses incurred in defending any
proceeding may be advanced by the Corporation prior to the final disposition of such proceeding
upon receipt of an undertaking by or on behalf of the agent to repay such amount unless it shall be
determined ultimately that the agent is entitled to be indemnified as authorized in this Article 6.
Section 6.7 Other Indemnification. No provision made by the Corporation to
indemnify its or its subsidiary's directors or officers for the defense of any proceeding, whether
contained in the Articles, Bylaws, a resolution of members or directors, an agreement or otherwise,
shall be valid unless consistent with this Article 6. Nothing contained in this Article 6 shall affect
any right to indemnification to which persons other than such directors and officers may be entitled
by contract or otherwise.
Section 6.8 Forms of Indemnification Not Permitted. No indemnification or
advance shall be made under this Article 6, except as provided in Sections 6.4 or 6.6(b), in any
circumstances where it appears:
(a) That it would be inconsistent with a provision of the Articles, these
Bylaws, or an agreement in effect at the time of the accrual of the alleged cause of action
asserted in the proceeding in which the expenses were incurred or other amounts were paid,
which prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
Section 6.9 Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any agent of the Corporation against any liability 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 this Article 6, provided, however, that a Corporation shall have no power to purchase
and maintain such insurance to indemnify any agent of the Corporation for a violation of Section
6233 of the California Nonprofit Public Benefit Corporation Law. •
13 3 2�—
Section 6.10 Nonapplicabilitv to Fiduciaries of Emplovee Benefit Plans. This
Article 6 does not apply to any proceeding against any trustee, investment manager or other
fiduciary of an employee benefit plan in such persons's capacity as such, even though such person
may also be an agent of the Corporation as defined in Section 6.1. The Corporation shall have
power to indemnify such trustee, investment manager or other fiduciary to the extent permitted by
subdivision (f) of Section 207 of the California General Corporation Law.
ARTICLE 7
DISPOSITION OF FUNDS
Any funds contributed to the Corporation, less operating expenses authorized by the
Board of Directors, shall be contributed to the Newport Beach Public Library within two years
after the Corporation's fiscal year in which such funds are received; provided, however, that the
Corporation may accumulate funds for a longer period pursuant to any plan established by the
Board of Directors for disposition of such funds for the benefit of the Newport Beach Public
Library. Notwithstanding the foregoing, upon resolution adopted by a majority of the Board of
Directors, funds of the Corporation may be contributed to the Newport Beach Public Library or
its designees as grants to fund designated projects or programs pursuant to such practices,
guidelines and procedures as are established from time to time by the Board of Directors, subject
to such approvals and controls as the Board of Directors determines are appropriate in the .
• circumstances."
•
19 33
E%HIBIT 4
STATEMENT OF POLICY
BY THE NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
This Statement of Policy is adopted by The Newport Beach Public Library Foundation
(the "Foundation "), effective January 13, 2000, in order to memorialize certain ongoing practices of
the Foundation for the benefit of the City of Newport Beach Public Library (the "Library "). This
Statement of Policy is adopted in recognition of the desire of the Foundation to provide for the
continuing excellence of the Library. It recognizes the distinctly different and separate roles and
authority of each of the Foundation in raising funds for the benefit of the Library, on the one hand,
and the Newport Beach Public Library Board of Library Trustees (the "Library Board ") in setting
policy for and governing the Library, on the other hand.
Therefore, the following Statement of Policy reaffirming such practices is hereby
adopted by the Foundation for general publication:
I.
POLICIES REGARDING MANAGEMENT OF FUNDS
AND FINANCIAL REPORTING;
AND COMMUNICATIONS WITH THE LIBRARY BOARD OF TRUSTEES
The Newport Beach Public Library Foundation ( "the Foundation ") will:
A. Continue to serve the best interests of its donors, the public, and the Newport Beach Public
Library.
B. Continue to operate within the guidelines established by the Internal Revenue Service and the
Attorney General of the State of California for not - for - profit corporations and the by -laws of
the Foundation.
C. Continue to retain a qualified investment advisory firm, currently Canterbury Consulting, to
assist the Foundation in the selection of investment managers, to measure results and provide
quarterly reports on portfolio performance in comparison to relevant benchmarks, to update its
investment policy, and to advise the Foundation on issues related to the management of
investments by not - for -profit organizations.
Policy. 1. 13.2000
•
•
3°1
• D. Continue to retain an independent accountant to perform an audit of the books of the
Foundation within a reasonable period after each year end. Copies of future audited financial
statements will be made available to the Library Board and to interested members of the public
as is currently available.
E. Continue to provide the Library Board with copies of approved Foundation minutes and
financial statements through the Library Board's ex- officio member on the Foundation's Board
of Directors.
F. Continue to provide the Library Board with a copy of the Foundation's annual budget within
thirty days of the beginning of the Foundation's fiscal year. The budget of the Foundation will
set forth the amount of the minimum contribution which the Foundation considers will be
available to transfer to the Library by the end of the Foundation's fiscal year. The Foundation
is aware of the Library's need for a regular stream of revenue to provide support for programs
which the Foundation has undertaken, e.g. CD -ROM subscriptions.
G. Continue to use the "wish list" provided by the Library Board to the Foundation at the
beginning of each fiscal year of the Foundation to solicit funding for the projects identified by
the Library Board as having a high priority and as not having been previously funded by the
City of Newport Beach.
• H. Continue to reimburse the City of Newport Beach for costs of photocopying, telephone,
internet access, and use of library postage meter promptly when billed.
•
I. Continue to maintain the Endowment Fund and General Fund separately in its books and
records and in the preparation of the budget.
J. Continue to solicit the comments and views of the Library Board as to Foundation fund
raising /solicitation materials.
II.
POLICY REGARDING DISBURSEMENT OF FUNDS
The Foundation will continue to disburse funds to the Library in accordance with the
following:
A. Not less often than semi - annually those funds restricted by donors for specific uses within the
Library will be distributed to the Library.
Policy. 1. 13.2000
3�
B.' After receipt of the annual request for disbursement from the Library Board, funds available •
for distribution will be distributed to the Library for the purposes as approved by the
Foundation. Annual distributions will include an amount equal to not less than 5 % of the
calculated market value of the Endowment Fund.
C. The Foundation will review the amount of the annual distributions from the Endowment Fund
not less often than every five years, taking into account the intent of donors, the investment
return from the Endowment Fund, overall economic conditions, and such other factors as the
Foundation deems appropriate in its administration of the Endowment Fund.
III.
POLICY REGARDING CAMPAIGNS FOR ENDOWMENT
When an Endowment Campaign is contemplated by the Foundation, the Foundation will
inform the Library Board of its campaign plan, including timeline(s), and periodic revisions,
and will solicit the comments and views of the Library Board.
IV. •
POLICY REGARDING LIBRARY REPRESENTATION ON
FOUNDATION BOARD OF DIRECTORS AND AT MEETINGS,
AND FOUNDATION REPRESENTATION AT
LIBRARY BOARD MEETINGS
A. The Newport Beach City Librarian will continue to be an ex- officio member of the
Foundations Board of Directors as provided for in the Bylaws of the Foundation.
B. Members of the Library Board will continue to be welcome to attend any noticed meetings of
the Foundation that are open to the public for the purpose of reporting on the Library's
activities and plans, providing information, and requesting pertinent information.
C. The Foundation Board of Directors will designate one or more of its members to regularly
attend the publicly noticed meetings of the Library Board for the purpose of reporting on the
Foundation's activities and plans, providing information, and requesting pertinent information.
By: Newport Beach Public Library Foundation
Policy. 1. 13.2000
EXHIBIT 5
i
• ARTICLES OF INCORPORATION
^,r _7 !3i7
l. J
OF
NEWPORT BEACH ARTS FOUNDATION
ARTICLE I
Name
The name of this Corporation is Newport Beach Arts Foundation.
ARTICLE II
Corporate Status
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 Corporation Law for charitable
purposes.
. ARTICLE III
Purposes
This Corporation is organized exclusively for charitable purposes
within the meaning of Section 501(c)(3) of the Internal Revenue
Code of 1986. The charitable purposes for which this Corporation
is organized are to further the purposes and objectives of the arts
programs of the City of Newport Beach, California.
ARTICLE IV.
Exempt Status and Limitations on Activities
No substantial part of the activities of this Corporation. shall
consist of the carrying on of propaganda, or otherwise attempting
to influence legislation, nor shall this Corporation participate
or intervene in any political campaign (including publishing or
distribution of statements) on behalf of or in opposition to any
candidate for public office. Notwithstanding any other provision
of these articles, this 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 of 1986 or (b) by a corporation contributions
to which are deductible under Section 170(c) (2) of the Internal
Revenue Code of 1986.
37
ARTICLE V . •
Initial Agent for Service of Process
The name of the initial agent of this Corporation for service of
process is:
John W. Francis
2600 East Nutwood Avenue, Suite 120
Fullerton, California 92631 -3106
ARTICLE VI
Members
This Corporation shall have no members other than the persons
constituting its Board of Directors. The persons constituting its
Board of Directors shall, for the purpose of any statutory
provision or rule of law relating to nonprofit corporations
otherwise, be taken to be the members of such corporation and
exercise all the rights and powers of members thereof.
ARTICLE VII •
Voting
Each member of the Board of Directors shall have one vote. There
shall be no proxy voting permitted for the transaction of any of
the business of this Corporation.
ARTICLE VIII
Irrevocable Dedication and Dissolution
The property of this Corporation is irrevocably dedicated to
charitable purposes and . no part of the . net income or assets of
this Corporation shall inure to the benefit of any director or
officer thereof or to the benefit of any private person. Upon
dissolution or winding up of this Corporation, its assets
remaining after payment, or provision for payment, of all debts
and liabilities of this Corporation shall be distributed to one or
more nonprofit corporations organized and operated for the benefit
of the City of Newport Beach, California, to be selected by the
Board of Directors and approved by the City Council of said City.
Such nonprofit' corporation or corporations must be qualified for •
Federal income tax exemption under Section 501(c) (3) of the
K
3-9
Internal Revenue Code of 1986, and be organized and operated
exclusively for charitable purposes. In no event shall any assets
be distributed to any director or officer of this Corporation or to
any private person.
ARTICLE IX
Disposition of Funds
The Board of Directors shall request annually from the City of
Newport Beach Arts Commission a statement of funding priorities.
Any funds contributed to the Corporation, less operating expenses
authorized by the Board of Directors, shall be contributed to the
City of Newport Beach Arts Commission within two years after the
Corporation's fiscal year in which such funds are received;
provided, however, that the Corporation may accumulate funds for a
longer period pursuant to any plan established by the Board of
Directors for disposition of such funds for the benefit of the City
of Newport Beach Arts Commission. Notwithstanding the foregoing,
upon resolution adopted by a majority of the Board of Directors,
funds of the Corporation may be contributed to the City of Newport
Beach Arts Commission or its designees as grants to fund designated
• projects or programs pursuant to such practices, guidelines and
procedures as are established from time to time by the Board of
Directors, subject to such approvals and controls as the Board of
Directors and the Arts Commission determine are appropriate in the
circumstances.
•
ARTICLE X
Amendment
The Articles of Incorporation of this Corporation shall be amended
only by the.vote of a majority of the total voting membership of
the Board of Directors, subject to the approval of the City Council
of Newport Beach, California.
J
39
IN WITNESS WHEREOF, for the purpose of forming this •
nonprofit corporation under the laws of the State of
California, I, the undersigned, constituting the
Incorporator of this Corporation, have executed these
Articles of Incorporation. this 5th day of
June 1998,
Howard rzog
Incorporator
DECLARATION
I am the person whose name is subscribed below. I am
the Incorporator of the Newport Beach Arts Foundation.
I have executed these Articles of Incorporation. The
foregoing Articles of Incorporation are my act and
deed.
Executed on June 5 1998 at Newport Beach,
California. •
I declare that the foregoing is true and rrect.
Howard Herzog
•
/(3
• BYLAWS
OF
NEWPORT BEACH ARTS FOUNDATION
ARTICLE I
The specific purpose of this corporation is
solicitation, receipt, and administration of
property, and from time to time to disburse
property and the income therefrom, solely to or
the City of Newport Beach Arts Commission,
activities and services.
ARTICLE II
Powers
to engage in the
monies and other
such monies and /or
for the benefit of
and its related
• The corporation shall have such powers as are now or may hereafter
be granted by the Nonprofit Corporation Law of the State of
California, except as limited by the provisions of its Articles of
Incorporation or these Bylaws.
ARTICLE III
The corporation shall have and continuously maintain in the City of
Newport Beach, State of California, a principal office for the
transaction of the corporation's business.
Section 1. No Regular Memt
the California Nonprofit
corporation shall have no
5056 of that law. All
approval by a majority of
ARTICLE IV
ers. In accordance with Section 5310 of
Public Benefit Corporation Law, the
members within the meaning of Section
action which would otherwise require
all members or approval by members shall
1
EXHIBIT 6
/p
require only approval of the Board of Directors. All rights which •
would otherwise vest in members shall vest in the Directors.
Section 2. Persons Associated With the Corporation. By
resolution, the Board of Directors may create any advisory boards,
councils, honorary memberships or other bodies as it deems
appropriate. The Board of Directors may also, by resolution,
confer upon any such class or classes of such persons some or all
of the rights of a member under the 'California Nonprofit Public
Benefit Corporation Law other than the right to vote:
(a) for the election of a Director or Directors or an officer
or officers; or
(b) on a disposition of all or substantially all of the
assets of the corporation; or
(c) on a merger; or
(d) on a dissolution; or
(e) on changes to the corporation's Articles of Incorporation
or Bylaws.
All such voting rights are vested exclusively in the Board of •
Directors.
ARTICLE V
:._ . . -
Section 1. Definition of Terms. For the purpose of these Bylaws,
"Board of Directors" or "Board" refers to the Board of Directors of
the corporation, unless otherwise specifically indicated.
Section 2. General Powers. All the business and affairs of the
corporation shall be managed and controlled by the Board of
Directors.
Section 3. Number. The number of Directors shall not be less than
five (5) nor more than twenty (20), the exact number to be
specified from time to time by action of the Board of Directors.
All Directors shall have an affiliation with the Newport Beach
community.
Section 4. Selection and Tenure. The Chair of the City of Newport
Beach Arts Commission shall be an ex- officio, non - voting Director •
2
q )—
of the corporation. Two (2) members of the Arts Commission,
appointed by the Arts Commission shall be non - voting Directors and
shall serve one (1) year terms. In addition, the Arts Commission
shall appoint three Directors who are not members of the Arts
Commission who shall serve one (1) , two (2) or three (3) year
initial terms as determined by the Arts Commission. All other
voting Directors shall be appointed by the Board of Directors and
shall serve one (1) , two (2) or three (3) year initial terms as
determined by the Board of Directors. All subsequent terms for
appointed voting Directors shall be three (3) years. Appointed
voting Directors shall have as many successive three (3) year terms
as the appointing entity deems appropriate.
Section 5. Resignation and Removal. Any Director may resign from
the Board at any time by giving written notice to the President or
the Secretary of the corporation and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary
to make it effective. Directors may be removed from office by
majority vote of the Board of Directors. A Director shall
automatically be removed from office if he or she fails to attend
three consecutive meetings of the Board of Directors without being
excused therefrom.
• Section 6. vacancies. Any vacancy occurring on the Board of
Directors of the corporation shall be filled by the Board of
Directors.
CJ
Section 7. Compensation of Directors. No Director shall receive
any salary or other similar compensation for any services as a
Director; however, the Board of Directors may authorize the
reimbursement of actual and necessary expenses incurred by
individual Directors performing duties as Directors.
Section 8. Inspection by Directors. Each Director shall have the
right at any reasonable time to inspect all books, records, and
documents of every kind and the physical properties of the
corporation for a purpose reasonably related to such person's
interest as a Director, provided that such Director shall not have
the right to inspect those books, records or documents made
privileged or confidential by law. This inspection must be made by
the Director in person, provided that the Director may be
accompanied by an agent or attorney, and the right of inspection
includes the right to copy and make extracts of documents. Nothing
in this section shall affect the right of the Board of Directors to
conduct the business of the corporation as set forth in these
Bylaws.
3
43
ARTICLE VI
Section 1. Place of Meetina. All meetings of the Board of
Directors shall be held at the principal office of the corporation
or at such other place as may be designated for that purpose from
time to time by the Board.
Section 2. Annual Meeting. An annual meeting of the Board of
Directors shall be held in June of each year prior to the meeting
of the Board of Directors. Such meeting shall be held at the
principal office of the corporation or at such other time and place
as the Board of Directors may from time to time designate. Such
meeting shall be for the purpose of electing officers of the
corporation and for the transaction of such other business as may
come before the meeting.
Section 3. Regular Meetinas. Regular meetings of the Board of
Directors shall be held upon notice in accordance with Section 5 of
this Article VI.
•
Section 4. Special Meetings. Special meetings of Directors may be
called by, or at the direction of, the President or by one -third of •
the voting Directors then in office, to be held at such time and
place as shall be designated in the notice of meeting.
Section 5. Notice of Meeting.
(a) Notice of the time and place of any meeting of the Board of
Directors other than special meetings shall be given at least ten
(10) days previous thereto delivered personally or sent by mail or
facsimile to each Director at his or her address or facsimile
number as shown in the records of the corporation. If mailed, such
notice shall be deemed to be delivered the next day during which
regular mail deliveries are made after the day such notice is
deposited in the United States Postal Service in a sealed envelope
so addressed, with postage thereon prepaid. If notice be given by
facsimile, such notice shall be deemed delivered when the facsimile
is transmitted. The business to be transacted at any regular or
special meeting of the Board shall be specified in the notice of
such meeting.
(b) The attendance of a Director at any meeting shall constitute
• waiver of notice of such meeting, except where a Director attends
• meeting for the express purpose of objecting to the transaction
of any business because the meeting is not lawfully called or
convened. •
4
`'
• Section 6. Open Meeting Law. All meetings of the Board shall be
open and public, and all persons shall be permitted to attend any
meeting of the Board, in conformity with the California statutes
governing the corporation, commencing with Section 54950 of the
Government Code. However, the Board may hold closed sessions
during any meeting to consider those matters that may lawfully be
considered in such sessions.
Section 7. Validation of Meeting. The transactions of the Board
of Directors at any meeting, however, called or noticed, or wherever
held, shall be as valid as though at a meeting duly held after call
and notice if a quorum be present and if, either before or after
the meeting, each Director not present signs a written waiver of
notice or a consent to the holding of such meeting, or an
approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records and made a part
of the minutes of the meeting.
Section 8. Ouorum and Manner of Acting. A majority of the number
of Directors in office or three (3) Directors, whichever is
greater, shall constitute a quorum of the Board of Directors for
the transaction of business, except to adjourn as provided in
Section 9 of this Article VI. A meeting at which a quorum is
• initially present may continue to transact business notwithstanding
the withdrawal of a Director or Directors, if any action taken is
approved by at least a majority of the required quorum for that
meeting. Each member of the Board of Directors shall have one
vote. There shall be no proxy voting permitted for the transaction
of any of the business of this corporation.
OR
Section 9. Adjourned Meetings. A quorum of the Directors may
adjourn any Directors meeting to meet again at a stated day and
hour; provided, however, that in the absence of a quorum, a
majority of the Directors present at any Directors meeting, either
regular or special, may adjourn from time to time until the time
fixed by the next regular meeting of the Board of Directors.
Notice of the date, time, place and the business to be transacted
at such meeting shall be given to any Directors who were not
present at the time of the adjournment.
Section 10. Minutes of Meetings and Conduct. Regular minutes of
the proceedings of the Board of Directors shall be kept in a book
provided for that purpose. The President shall preside at meetings
of the Board of Directors. The Board of Directors may adopt its
own rules of procedure insofar as such rules are not inconsistent
with, or in conflict with, these Bylaws, the Articles of
Incorporation of the corporation or with the law.
5
1S-
ARTICLE VII
Section 1. Officers. The Officers of the corporation shall be a
President, a Vice President, a Secretary, and a Treasurer. The
corporation, at the discretion of the Board of Directors, may have
additional officers. All Officers shall be selected from among the
Directors. One person may hold two or more offices, except that
one person may not hold both the offices of President and Secretary
or Treasurer.
Section 2. Election and Term of Offj=. Initially, the Officers
of the corporation will be appointed by the Board of Directors at
the organizational meeting and subsequently will be elected
annually by the Board of Directors at its annual meeting. If the
election of Officers shall not be held at such meeting, such
election shall be held as soon thereafter as may conveniently be
scheduled. Vacancies may be filled or new offices created and
filled at any meeting of the Board of Directors. Except as
provided in the case of Officers appointed under Section 4 of this
Article VII herein, each Officer shall hold office for a term of
one (1) year and until his or her successor shall have been
elected, unless he or she shall sooner resign, be removed, or
become ineligible to continue to serve in such capacity. 'Elected
Officers may serve as many successive one (1) year terms as the
Board of Directors deems appropriate.
Section 3. Removal and Resignation. Any Officer elected by the
Board of Directors may be removed by the Board of Directors at
which a quorum is present whenever, in their judgment, the best
interests of the corporation would be served thereby. Any Officer
may resign at any time by giving written notice to the President or
the Secretary of the corporation and unless otherwise specified
therein the acceptance of such resignation shall not be necessary
to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the
Officer is a party.
Section 4. Vacancies. A vacancy in any office may be filled by
the Board of Directors for the unexpired portion of the term.
Section 5. President. The President shall be elected from among
the Directors of the. corporation and shall be chairman of and
preside at all meetngs of the Board of Directors and of the
Executive Committee. The President shall be an ex- officio member
of all committees which may be from time to time elected or
appointed and may serve as chairman of the Executive Committee. is
0
iG.
• The President may sign, with the Secretary or Treasurer or any
other proper officer of the corporation authorized by the Board of
Directors, any deeds, mortgages, bonds, contracts, or other
instruments which have been authorized to be executed on behalf of
the corporation, except in cases where the signing thereof shall be
expressly delegated by the Board of Directors, or by these Bylaws,
or by statute to some other officer or agent of the corporation;
and, in general, he or she shall perform all duties incident to the
functions of the President of the Board of a corporation and such
other duties as may be prescribed by the Board of Directors from
time to time.
Section 6. Vice President. In the absence of the President the
Vice President shall perform the duties of the President. The Vice
President shall have such other powers and perform such other
duties as may be assigned to him or her by the President or by the
Board of Directors.
Section 7. Secretary. The Secretary shall keep or cause to be
kept a book of minutes at the principal office or at such other
place as the Board of Directors may order of all meetings of the
Directors and of the Executive Committee, with the time and place
of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at
Directors meetings. The Secretary shall give or cause to be given
notice of all the meetings of the Board of Directors required by
these Bylaws or by law to be given.
Section 8. Treasurer. The Treasurer, subject to the direction of
the President, shall have charge and custody of and be responsible
for all funds and securities of the corporation; receive and give
receipt for moneys due and payable to the corporation from any
source whatsoever; deposit all such moneys in the name of the
corporation in such banks, trust companies, or other depositories
as the Board of Directors shall select, and, in general, perform
all the duties incident to the office of Treasurer. If required by
the Board of Directors, the Treasurer shall give a bond for the
faithful discharge of his or her other duties in such sum and with
such surety as the Board of Directors shall.determine.
ARTICLE VIII
Section 1. Committees. The Board may appoint one or more
committees, each consisting of two or more Directors, and delegate
to such committees any of the authority of the Board except with
• respect to:
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(a) The filling of vacancies on the Board or on any committee; •
(b) The fixing of compensation of the Directors for serving on the
Board or on any committee, should Article V, Section 7, be
amended to allow such compensation;
(c) The amendment or repeal of Bylaws or the adoption of any new
Bylaws;
(d) The amendment or repeal of any resolution of the Board which
by its express terms is not so amendable or repealable;
(e) The appointment of other committees of the Board or the
members thereof; or
(f) The approval of any self - dealing transaction, as such
transactions are defined in Section 5233(a) of the California
Nonprofit Public Benefit Corporation Law.
Any such committee must be created, and the members thereof
appointed, by resolution adopted by a majority of the Directors
then in office, provided a quorum is present. Any such committee
may be designated an Executive Committee or by such other name as
the Board shall specify. The Board may appoint, in the same
manner, alternate members of any committee who may replace any
absent member at any meeting of the committee. The Board shall
have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such
prescription, such committee shall have the power to prescribe the
manner in which its proceedings shall be conducted. Minutes shall
be kept of each meeting of each committee. ,
Section 2. Committee Procedures. The Board of Directors may
prescribe appropriate rules, not inconsistent with the Bylaws, by
which proceedings of any committee shall be conducted.
ARTICLE IX
Section 1. Right of Indemnity. To the fullest extent permitted by
law, the corporation shall indemnify its Directors, Officers,
employees, and other persons described in Section 5238(a) of the
California Corporations Code, including persons formerly occupying
any such position, against all expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred by
them in connection with any "proceeding," as that term is used in
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that Section, and including an action by or in the right of the
corporation, by reason of the fact that the person is or was a
person described in that section. "Expenses," as used in this
bylaw, shall have the same meaning as in Section 5238(a) of the
California Corporations Code.
Section 2. Approval of Indemnity. On written request to the Board
by any person seeking indemnification under Section 5238(b) or
Section 5238(c) of the California Corporations Code, the Board
shall promptly determine under Section 5238(e) of the California
Corporations Code whether the applicable standard of conduct set
forth in Section 5238(b) or'Section 5238(c) has been met and, if
so, the Board shall authorize indemnification.
Section 3. Advancement of Expenses. To the fullest extent
permitted by law and except as otherwise determined by the Board in
a specific instance, expenses incurred by a person seeking
indemnification under these Bylaws in defending any proceeding
covered by those Sections shall be advanced by the corporation
before final disposition of the proceeding, on receipt by the
corporation of an undertaking by or on behalf of that person that
the advance will be repaid unless it is ultimately determined that
the person is entitled to be indemnified by the corporation for
those expenses.
Section 4. Insurance. The corporation shall have the right to
purchase and maintain insurance to the full extent permitted by law
on behalf of its Officers, Directors, employees, and other agents,
against any liability asserted against or incurred by any Officer,
Director, employee, or agent in such capacity or arising out of the
Officer's, Director's employee's or agent's status as such.
ARTICLE X
Contracts Loans Checks Deposits and Gifts
Section 1. Contracts. The Board of Directors may authorize any
officer or agent of the corporation, in addition to the Officers so
authorized by these Bylaws, 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.
Section 2. Loans. The Board of Directors shall not make any loan
of money or property to or guarantee the obligation of any Director
or officer, unless approved by the Attorney General. The above
• provisions do not apply to a loan of money to or for the benefit of
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an officer in circumstances where the loan is necessary, in the •
judgment of the Board, to provide financing for the purchase of the
principal residence of the officer in order to secure the services
or continued services of the officer and the loan is secured by the
real property purchased with the loan.
Section 3. Bor_rowino. No loan shall be contracted on behalf of
the corporation and no evidence of indebtedness shall be issued in
its name unless authorized by a resolution of the Board of
Directors.
Section 4. Checks. Drafts. Etc. All checks, drafts, or other
orders for payment of money, and all notes or other evidence of
indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation and
in such manner as, from time to time, shall be determined by
resolution of the Board of Directors.
Section 5. 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 6. Gifts The Board of Directors may at their discretion
accept on behalf of the corporation any contribution; gift,
bequest, or devise for the general purposes or for any specific
purpose of the corporation.
ARTICLE XI
Miscellaneous
Section 1. Fiscal Year. The fiscal year of the corporation shall
begin on the first day of July and end on the last day of June in
each year unless otherwise determined by resolution of the Board of
Directors.
Section 2. Rules. The Board of Directors may adopt, amend, or
repeal rules not inconsistent with these Bylaws for the management
of the internal affairs of the corporation and the governance of
its officers, agents, committees, and employees.
Section 3. Books and Records. The corporation shall keep correct
and complete books and records of account and minutes of the
proceedings of the Board of Directors and committees. Copies of
the minutes of the Board of Directors and of the committees shall
be regularly distributed to each member of the Board of Directors.
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• Section 4. Corporate Seal. The Board of Directors may provide a
corporate seal, which shall be in the form of a circle and shall
have inscribed thereon the name of the corporation, the date of its
incorporation, and the word "California."
•
Section 5. Waiver of Notice. Whenever any notices are required to
be given under the provisions of the Nonprofit Corporation Act of
the State of California, or under the provisions of the Articles of
Incorporation of the corporation, or these Bylaws, a waiver thereof
in- writing signed by the persons entitled to such notice, whether
dated before or after the time stated. herein, to the extent
permitted by law, shall be deemed equivalent to the giving of such
notice.
ARTICLE XII
Amendment to Bylaws
Subject to the approval of the City Council of Newport Beach, these
Bylaws may be amended at any regular meeting of the Board of
Directors by a majority vote of the total voting membership of the
Board of Directors., provided that the amendment has been submitted
in writing at the previous regular meeting, or has.been submitted
in writing to the Directors at least thirty (30) days before such
regular meeting.
SECRETARY'S CERTIFICATE
THIS IS TO CERTIFY that the foregoing Bylaws of the NEWPORT BEACH
ARTS FOUNDATION were duly adopted by the Board of Directors of said
corporation at a meeting of said Board held on October 5, 1998.
IN WITNESS WHEREOF, the undersigned, Secretary of said corporation,
has signed this Certificate hereon this day of
1998.
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Secretary
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Secretary
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Addendum to Study Session Agenda Item No. 3
January 25, 2000
COMMUNITY SERVICES DEPARTMENT
Arts 8 Cultural - Library - Recreation - Seniors
To: Mayor and Members of City Council
From: LaDonna Kienitz, Community Services Director /City Librarian
Re: Authority of the Board of Library Trustees and City Arts Commission;
Information on Related Foundations
Comparison of Articles of Incorporation and Bylaws of the two Foundations.
Comparisons
Newport Beach Public
Newport Beach Arts
Library Foundation
Foundation
Proposes, as stated in
'To engage in the
"To further the purposes
Articles of Incorporation
solicitation, receipt, and
and objectives of the arts
administration of monies
programs of the City of
and other property, and
Newport Beach,
from time to time to
California."
disburse such monies
and /or property and the
income therefrom, solely
to or for the benefit of the
City of Newport Beach
Public library, its
branches, and its related
activities and services."
Incorporation Date
December 22, 1993;
August 7,1998
Reincorporated January
13, 2000.
Powers Given to City
None
Approval of changes to the
Council of Newport Beach
Articles of Incorporation,
the Bylaws, and the
disbursement of funds
upon dissolution.
Appointment Powers of
None
No authority to City
City Council to Board of
Council.
Directors
Directors nominated and
elected by current Board
On initiation of Board, City
of Directors.
Arts Commissioners had
authority to appoint three
members to Board.
Ex- Officio (Non - Voting)
City Librarian
Chair of City Arts
Board Member(s)
Commission and two
additional Commissioners
Authority of the Board of Library Trustees and City Arts Commission;
Information on Related Foundations
Page 2
Comparisons
Newport Beach Public
Newport Beach Arts
Library Foundation
Foundation
Requirements to Hold
None
Meetings must be
Public Meetings
Bylaws as revised
conducted under California
November 1, 1999, permit
Open Meeting Act of
Government Code, per the
Board to hold Executive
Bylaws, with 10 day notice
Sessions excluding non-
requirement.
voting ex- officio member.
Membership Organization
No
No
Per Articles of
Per Articles of
Incorporation, Article IV.
Incorporation, Article VI.
Support from City
Foundation office in
City Cultural Arts
Central Library,
Coordinator has provided
telecommunications
approximately 20 hours of
provided without charge.
support since incorporation
Use of City postage
in 1998.
machine and copy
equipment reimbursed by
Foundation at nominal fee.
Ongoing support from City
library staff.
Current Assets
$1,568,016, per June 30,
$1,745 on January 10, 2000
1999 statement.
Distribution of Assets upon
Distribution "... to the
Distribution "... to one or
Dissolution
Orange County Community
more nonprofit
Foundation to establish an
corporations organized and
endowment fund, the
operated for the benefit of
income from which shall be
the City of Newport Beach,
distributed annually to or
California, to be selected
for the benefit of the City
by the Board of Directors
of Newport Beach Public
and approved by the City
Library' (per revised
Council of said City."
Articles of Incorporation,
January 13, 2000).
Original Articles, December
23, 1993, provided for
funds to be dispersed "... to
the City of Newport
Beach."