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The FreeBSD Foundation
an introduction
Since its inception in early 2000, the FreeBSD Foundation has worked
quietly to become the first non-profit, legal entity, chartered to
support the FreeBSD Project. With much of the ground work required
to operate a non-profit now complete, the Foundation is taking this
opportunity to more formally introduce itself to the FreeBSD community.
Below you will find an overview of the Foundation in a "Frequently
Asked Questions" format.
Q: If this FAQ doesn't answer my questions, whom should I contact?
A: There are several ways to contact the Foundation.
o By email: bod@FreeBSDFoundation.org
o By telephone: +1-303-497-9393
o By mail:
The FreeBSD Foundation
7321 Brockway Dr.
Boulder, CO 80303
USA
Q: What type of entity is the FreeBSD Foundation?
A: The FreeBSD Foundation is a non-profit corporation, incorporated
in the state of Colorado, recognized as a publicly supported,
tax exempt entity under section 501(c)3 and 509(a)(1) of the United
States Tax code.
Q: Why was the Foundation incorporated in Colorado?
A: The Foundation was incorporated in the state of Colorado
due to the favorable legal climate Colorado presents for
non-profit organizations. Although Colorado offers the additional
convenience of being a state where a member of the Foundation's
board resides, this was not a primary consideration.
Q: What is 501(c)3/509(a)(1) public charity status?
A: Under Section 501(c)3 of the United States Internal Revenue Code,
there are two types of tax-exempt entities: public charities and
private foundations. Although there are several exceptions to this
rule, a tax-exempt entity is considered a public charity so long
as 1/3rd of its support comes directly or indirectly from one or
more government units or from direct or indirect contributions from
the general public. Failure to meet the 1/3rd test (or to qualify
for an exception) results in a classification as a private foundation.
There are several advantages to obtaining and maintaining public
charity status (IRS pub 578 gives some details on the additional
restrictions on private foundations).
The Foundation received an initial ruling from the IRS
characterizing it as a public charity on December 7th of 2000.
This date marked the beginning of a four year probationary
period during which the IRS will carefully scrutinize the
performance of the Foundation to ensure it meets the requirements
of a public charity. Although the IRS will continue to
review the tax returns of the Foundation long after the
probationary period, carefully navigating the first four
years as a public charity is by far the most challenging.
Q: What are the benefits of 501(c)3 status?
A: As a 501(c)3 entity, the Foundation is generally exempt from
Federal as well as Colorado State income tax. Donations to
a tax-exempt entity are often deductible from taxable Federal income.
In return for these benefits, the Foundation's activities are
regulated. These regulations offer some level of assurance
to those supporting the Foundation that: those running the
Foundation will never be "excessively" compensated; the
activities of the Foundation will be publicly disclosed;
and, should the Foundation ever close its doors, its assets
will be distributed to other tax-exempt entities (e.g. USENIX).
Q: What is the charter for the Foundation?
A: The Foundation was created to support the FreeBSD Project and to
represent it in cases where a true legal entity is required. (E.g.
having the "FreeBSD Project" hold compilation copyright on the
4.3 Release doesn't make sense as the Project is not a legal entity.)
In the Foundation's application to the IRS for tax exempt status,
the Foundation's proposed activities were listed as:
1) To hold the FreeBSD trademark and any other intellectual
property as may be contributed for the benefit of the
general public.
2) To aid research in computer operating systems by providing a
non-proprietary, production-quality operating system with
complete source code to students and researchers in the field
and by directly supporting such research through grants and
other means.
3) To encourage the development of software systems which embody
the principles of open access to source code and unrestricted
distribution, by
a) providing a collaborative environment for qualified software
developers committed to developing this software
b) engaging in contracts for the development of this software.
4) To make this software accessible to the general public by
a) licensing all software owned or produced by the Foundation
(generally without charge and without restriction as to
licensees, who may be individuals or for-profit or non-profit
organizations) such that its use and distribution in source
or binary form is universally allowed and encouraged
b) maintaining public access Internet servers staffed by
volunteers for the distribution, without charge, of this
software
c) developing documentation for this software
d) encouraging the formation of user groups
e) cultivating press coverage and advertising the utility
and availability of this software.
5) To accept contributions from like-minded individuals and
corporations in support of these goals.
Q: Who runs the Foundation?
A: The following persons represent the current board of directors
("BOD")
and executive officers of the Foundation:
Jonathan M. Bresler President
John D. Polstra Vice President
Justin T. Gibbs Secretary/Treasurer
Q: How are the BOD members and/or executives compensated?
A: Both 501(c)3 status and the bylaws of the Foundation severely
restrict the type and amount of compensation given to persons
with controlling authority of the Foundation. The Foundation
does not currently, nor will it ever provide compensation
to Directors for their services as Directors or committee
members. Executive duties are not currently compensated.
Q: How are Directors chosen?
A: The Foundation began life with a sole-incorporator, Justin Gibbs,
who chose the initial board. As detailed in the Foundation bylaws
(included below), future Directors will be elected by the BOD itself.
Q: How is the Foundation related to the FreeBSD Core Team?
A: The Foundation is not in any way associated with the FreeBSD Core
Team. The operation of the Foundation is under the sole discretion
of the BOD. Although the current BOD is coincidently comprised
of former Core Team members, the Foundation and the Core Team are
completely separate entities.
Q: How is the Foundation related to FreeBSD Inc?
A: The Foundation is not in any way associated with FreeBSD Inc.
Q: What is the current financial status of the Foundation?
A: Below is a summary balance sheet of the Foundation's operations
since its inception:
Income
=====
Donations/Grants
=============== Justin T. Gibbs $2000.00
TeraSolutions Inc. $5000.00
======= $7000.00
Expenses
=======
Legal Fees $6167.67
Office Supplies $ 32.15
Check Printing $ 47.75
======= $6241.57
Current balance: $ 758.43
Q: What are the Foundation's near-term plans?
A: All items listed below are contingent on the availability of
sufficient funds:
o Pay off liabilities left from the shutdown of FreeBSD Inc.
in July of 2000.
Luigi's Stateful Extensions to IPFW Contract $1500.00
Warner's Security Symposium Registration $ 575.00
==== $2075.00
o Pay legal fees required to determine the defensibility
of the FreeBSD trademark and transfer the trademark to
the Foundation.
o Pay ongoing legal fees to enforce the trademark.
o Request a current legal review of FreeBSD's standard license
template to ensure it "means what we think it means" while
giving ample protection from strict liability.
o Perform initial and continuing due diligence on copyrights
in the FreeBSD code base to provide a public, up to date,
legal determination of the consequences of using FreeBSD.
The Foundation will also use this work to petition the change
of problematic licenses as well as create license uniformity
(e.g., from a given author) to reduce the documentation burden
on binary only distributions.
Q: How can I make a donation?
A: The Foundation can accept donations, in check form, sent to
its mailing address:
The FreeBSD Foundation
7321 Brockway Dr.
Boulder, CO 80303
The Foundation is still looking into ways to accept donations
via credit card.
A formal notice of receipt of donation will be sent in response
to all donations. This notice will provide proper proof of the
donation sufficient for tax deduction purposes. Individuals planning
to claim a deduction are urged to refer to IRS publication
526 and/or to seek professional tax advice to ensure the donation
will be deductible given your tax circumstances. Corporate tax
law governing deductibility of donations is complex, so corporate
entities are also urged to seek tax advise prior to donating.
In order to maintain the Foundations status as a public charity, 1/3rd
of our support must be from the "general public". Individual and
unrelated donations (e.g., donating several small amounts may be treated
as if the sums were combined depending on the circumstances of the
donations) not exceeding 2% of the Foundations total income, count
toward meeting this goal. This means that numerous small donations
from different individuals, rather than a few large donations, are
required to meet the 1/3rd test.
Those wishing to donate equipment, make a one time grant, or provide
large recurring donations, should contact the BOD of the Foundation
prior to submitting your donation. These steps are required to ensure
the Foundation continues to meet the 1/3rd support test, thus remaining
a public charity.
Q: Are there any other ways that I can help the Foundation?
A: The Foundation is currently looking for help with:
o Designing a Logo
o Developing content for the Foundation's web site.
If you are interested in helping with any of these
items, please contact the BOD.
Q: Why did it take so long for the Foundation to make this announcement?
A: In these early days as a 501(c)3 public charity, the Foundation is
taking very measured steps to insure we retain our tax-exempt
status. From reading numerous tax publications and obtaining
legal consultation, to setting up proper accounting and processes
for accepting donations, building the Foundation has been very
time consuming. During this process, the Foundation was not prepared
to do anything more than understand the consequences of being a
501(c)3, file lots of forms with the IRS, and pay legal fees.
The BOD determined that weekly updates amounting to "we're working
on it" would be less productive than simply laying low until the
formation process was complete.
In this, as in most endevours, even with careful preparation, there
are always surprises. The most recent delay in sending this notice
came when the Foundation received a notice, 3 1/2 years early, that
our probationary period as a public charity had ended. Fortunately
the IRS was quick to resolve their mistake.
Q: What are the Bylaws of the Foundation?
A:
BYLAWS
of
THE FreeBSD FOUNDATION
A Colorado Nonprofit Corporation
ARTICLE 1 - DEFINITIONS
Section 1.1. Definitions.
The following terms used in these Bylaws shall have the meanings
set forth below.
A. "Act" means the Colorado Revised Nonprofit Corporation Act.
B. "Board" means the Board of Directors of the Corporation.
C. "Corporation" means The FreeBSD Foundation.
D. "Director" means an individual serving on the Board.
ARTICLE 2 - OFFICES
Section 2.1. Offices.
The registered office of the Corporation shall be located in
Colorado. The Corporation may have any number of other offices, including
a principal office, at such places as the Board may determine.
ARTICLE 3 - SEAL
Section 3.1. Seal.
The Corporation may use a Corporate Seal. The Corporate Seal
shall bear the name of the Corporation, the year of its incorporation and
the words "Corporate Seal, Colorado".
ARTICLE 4 - MEMBERS
Section 4.1. No Members.
The Corporation shall have no members entitled to vote on any
matter or for any other reason.
ARTICLE 5 - BOARD OF DIRECTORS
Section 5.1. Board of Directors.
The business and affairs of the Corporation shall be managed
under the direction of the Board. The powers of the Corporation shall be
exercised by, or under the authority of, the Board except as otherwise
provided by statute, the Articles of Incorporation, the Bylaws, or a
resolution adopted by the Board.
Section 5.2. Performance of Duties.
Each Director shall discharge the Director's duties as a Director,
including the Director's duties as a member of a committee of the Board, in
good faith, with the care an ordinarily prudent person in a like position
would exercise under similar circumstances, and in a manner the Director
reasonably believes to be in the best interests of the Corporation. In
discharging such duties, a Director is entitled to rely on information,
opinions, reports, or statements, including financial statements and other
financial data, if prepared or presented by:
(a) One or more officers or employees of the Corporation whom the
Director reasonably believes to be reliable and competent in
the matters presented;
(b) Legal counsel, a public accountant, or another person as to
matters which the Director reasonably believes to be within
such person's professional or expert competence;
or
(c) A committee of the Board of which the Director is not a
member if the Director reasonably believes the committee
merits confidence.
A Director is not acting in good faith if the Director has
knowledge concerning the matter in question that makes such reliance
unwarranted. A Director is not liable as such to the Corporation
or its Members for any action taken or omitted to be taken as a
Director if, in connection with such action or omission, the Director
performed the Director's duties in compliance with this Section.
Section 5.3. Qualifications of Directors.
Each Director shall be a natural person at least 18 years of
age who need not be a resident of Colorado.
Section 5.4. Number and Election of Directors.
The Board shall determine by resolution the total number of
Directors to serve at any time. However, the Board shall consist of
not less than three (3) Directors. The Directors shall be elected by
the Board at the annual meeting. Each Director shall be elected for
a term of one year.
Section 5.5. Term of Office.
Each Director shall hold office until (a) the expiration of
the term for which he or she was elected and until his or her
successor has been elected and qualified, or (b) his or her earlier
death, resignation, or removal.
Section 5.6. Procedure for Nomination of Candidates for Director.
The chair of the meeting shall announce at the meeting of the
Board the number of Directors to be elected at the meeting and shall
declare that the nominations of candidates for election as Director are
open and shall call for nominations from the floor. Nominations may be
made by any Director who is present at the meeting in person. Nominations
need not be seconded. After nominations have been made, the chair of
the meeting shall, on motion, declare the nominations closed, and
thereafter no further nominations may be made. After the nominations
have been closed, the Directors shall cast their votes.
Section 5.7. Vacancies.
Vacancies in the Board, including vacancies resulting from
(a) an increase in the number of Directors, or (b) the death, resignation,
or removal of a Director, shall be filled by a majority of the remaining
Directors though less than a quorum. Each person so elected shall be
a Director to serve for the balance of the unexpired term.
Section 5.8. Resignations.
Any Director may resign at any time by giving written notice to
the Corporation. The resignation shall be effective upon receipt by
the Corporation or at such subsequent time as may be specified in the
notice of resignation.
Section 5.9. Compensation of Directors.
Directors shall receive no compensation for their services as
Directors or as committee members. However, the Corporation may compensate
a Director for providing services to the Corporation in any other
capacity, including that of salaried officer, employee, or agent of the
Corporation. Directors who serve as salaried officers, employees, or
agents of the Corporation shall not participate in any vote of the Board
with respect to their compensation. Directors may be reimbursed for
reasonable expenses incurred on behalf of the Corporation as provided
by resolution of the Board.
Section 5.10. Voting Rights.
Each Director shall be entitled to one vote.
Section 5.11. Proxy.
For purposes of determining a quorum with respect to a particular
proposal, and for purposes of casting a vote for or against a particular
proposal, a Director may be deemed to be present at a meeting and to
vote if the Director has granted a signed written proxy to another
Director who is present at the meeting, authorizing the other Director
to cast the vote that is directed to be cast by the written proxy with
respect to the particular proposal that is described with reasonable
specificity in the proxy. Except as provided in these Bylaws and as
permitted by law, Directors may not vote or otherwise act by proxy.
ARTICLE 6 - COMMITTEES
Section 6.1. Establishment and Powers.
The Board may, by resolution adopted by a majority of the Directors,
establish one or more committees to consist of one or more Directors of
the Corporation. Any such committee, to the extent provided in the
resolution of the Board, shall have and may exercise all of the powers
and authority of the Board, except that no committee, including the
Executive Committee shall:
(a) Authorize distributions;
(b) Elect, appoint, or remove any Director;
(c) Amend the Articles of Incorporation;
(d) Adopt, amend, or repeal the Bylaws;
(e) Approve a plan of merger; or
(f) Approve a sale, lease, exchange, or other disposition of all,
or substantially all, of the Corporation's property, with
or without goodwill, otherwise than in the usual and regular
course of business.
Section 6.2. Term.
Each member of a committee of the Board shall serve at the pleasure
of the Board.
Section 6.3. Committee Organization.
Except as otherwise provided by the Board, each committee shall be
chaired by a Director and shall establish its own operating procedures.
Each committee shall keep regular minutes of its proceedings and report
the same to the Board at each regular meeting. Each committee shall
determine its times and places of meetings.
Section 6.4. Executive Committee.
The Executive Committee shall be composed of the officers of the
Corporation. The Executive Committee shall be authorized to act for
the Board between its regular meetings. Except as otherwise provided
by these Bylaws or by resolution of the Board, the Executive Committee
shall have and may exercise all of the powers and authority of the Board
in the management of the Corporation.
ARTICLE 7 - MEETINGS OF DIRECTORS
Section 7.1. Place of Meetings.
The Board may hold its meetings at such places as the Board may
appoint or as may be designated in the notice of the meeting.
Section 7.2. Annual Meeting.
Unless the Board provides by resolution for a different time, the
annual meeting of the Board, for the election of Directors and the
transaction of any other business which may be brought before the meeting,
shall be held at 10 o'clock a.m. on the first Monday of April in each
year. If such day is a legal holiday under the laws of Colorado, the
annual meeting shall be held on the next succeeding business day which
is not a legal holiday under the laws of Colorado.
Immediately after each annual election of Directors, the newly
constituted Board shall meet without prior notice at the place where
the election of Directors was held, or at any other place and time
designated in a notice given as provided in Section 9.1, for the purposes
of organization, election of officers, and the transaction of other
business.
Section 7.3. Regular Meetings.
The Board may hold its regular meetings at such place and time as
shall be designated by resolution of the Board. If the date fixed for
any regular meeting is a legal holiday under the laws of Colorado, the
meeting shall be held on the next succeeding business day or at such
other time as may be determined by resolution of the Board. The Board
shall transact such business as may properly be brought before its
meetings. Notice of regular meetings need not be given.
Section 7.4. Special Meetings of the Board.
The President or any two Directors may call special meetings of
the Board which shall be held at such time and place as shall be designated
in the call for the meeting. Two days' notice of any special meeting
shall be given to each Director. Such notice shall state the time,
place, and purpose of such special meeting.
Section 7.5. Quorum.
A majority of Directors then in office shall constitute a quorum
for the transaction of business. The acts of a majority of the Directors
present and voting at a meeting at which a quorum is present shall be
the acts of the Board.
Section 7.6. Participation in Meetings.
One or more Directors may participate in a meeting of the Board
or a committee thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other. Such participation shall constitute
presence in person at the meeting.
Section 7.7. Organization.
Every meeting of the Board shall be presided over by the President,
or in the absence of the President, the Vice President, or in the absence
of the President and the Vice President, a chair chosen by a majority
of the Directors present. The Secretary, or in his or her absence, a
person appointed by the chair, shall act as secretary.
Section 7.8. Consent of Directors in Lieu of Meeting.
Any action required or permitted to be taken by the Board or by
a committee thereof at a meeting may be taken without a meeting if each
and every member of the Board or committee in writing either:
(a) Votes for such action; or
(b) (i) Votes against such action or abstains from voting; and
(ii) Waives the right to demand that a meeting be held.
Action is taken under this Section only if the affirmative vote for such
action equals or exceeds the minimum number of votes that would be
necessary to take such action at a meeting at which all of the Directors
then in office were present and voted. No action taken pursuant to this
Section shall be effective unless writings describing the action taken,
signed by all Directors and not revoked pursuant to this Section, are
received by the Corporation. Any such writing may be received by the
Corporation by electronically transmitted facsimile or other form of
wire or wireless communication providing the Corporation with a complete
copy of the document, including a copy of the signature on the document.
Action taken pursuant to this Section shall be effective when the last
writing necessary to effect the action is received by the Corporation
unless the writings describing the action taken set forth a different
effective date. Any Director who has signed a writing pursuant to this
Section may revoke such writing by a writing signed and dated by the
Director describing the action and stating that the Director's prior
vote with respect thereto is revoked, if such writing is received by
the Corporation before the last writing necessary to effect the action
is received by the Corporation. Action taken pursuant to this Section
has the same effect as action taken at a meeting of Directors or a
committee and may be described as such in any document. All signed
written instruments necessary for any action taken pursuant to this
Section shall be filed with the minutes of the meetings of the Board or
committee.
ARTICLE 8 - OFFICERS
Section 8.1. Number.
The officers of the Corporation shall include a President, a Vice
President, a Secretary, and a Treasurer. The officers may include one
or more Assistant Secretaries, one or more Assistant Treasurers, and
such other officers as the Board may determine by resolution. Any number
of offices may be held by the same person.
Section 8.2. Qualifications of Officers.
The officers shall be natural persons at least 18 years of age,
except that the Treasurer may be a corporation. Officers need not be
Directors.
Section 8.3. Election and Term of Office.
The officers of the Corporation shall be elected by the Board at
the annual meeting. Each officer shall serve for a term of one year and
until his or her successor has been elected and qualified, or until his
or her earlier death, resignation, or removal. A vacancy may be filled
by the Board at any time for the unexpired portion of the term.
Section 8.4. Removal of Officers.
Any officer or agent may be removed by the Board with or without
cause. Such removal shall be without prejudice to the contract rights,
if any, of any person so removed.
Section 8.5. Resignations.
Any officer may resign at any time by giving written notice to
the Corporation. The resignation shall be effective upon receipt by the
Corporation or at such subsequent time as may be specified in the notice
of resignation.
Section 8.6. The President.
The President shall be the chief executive officer of the
Corporation and shall have general supervision over the business and
operations of the Corporation, subject to the control of the Board.
The President shall chair all meetings of the Board and the Executive
Committee. The President shall execute in the name of the Corporation,
deeds, mortgages, bonds, contracts, and other instruments authorized
by the Board, except in cases where the execution thereof shall be
expressly delegated by the Board to some other officer or agent of
the Corporation. In general, the President shall perform all duties
incident to the office of President and such other duties as may
be assigned by the Board.
Section 8.7. The Vice President.
In the absence or disability of the President or when so directed
by the President, the Vice President may 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 President
shall perform such other duties as may be assigned by the Board or the
President.
Section 8.8. The Secretary.
The Secretary shall record all votes of the Board and the minutes
of the meetings of the Board in a book or books to be kept for that purpose.
The Secretary shall see that required notices of meetings of the Board
are given and that all records and reports are properly kept and filed
by the Corporation. The Secretary shall be the custodian of the seal
of the Corporation and shall see that it is affixed to all documents to
be executed on behalf of the Corporation under its seal. In general,
the Secretary shall perform all duties incident to the office of Secretary
and such other duties as may be assigned by the Board or the President.
Section 8.9. Assistant Secretaries.
In the absence or disability of the Secretary or when so directed
by the Secretary, any Assistant Secretary may perform all the duties of
the Secretary, and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the Secretary. Each Assistant
Secretary shall perform such other duties as may be assigned by the
Board, the President, or the Secretary.
Section 8.10. The Treasurer.
The Treasurer shall be responsible for corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation. The Treasurer shall
have full authority to receive and give receipts for all money due and
payable to the Corporation, and to endorse checks, drafts, and warrants
in its name and on its behalf and to give full discharge for the same.
The Treasurer shall deposit all funds of the Corporation, except such as
may be required for current use, in such banks or other places of deposit
as the Board may designate. In general, the Treasurer shall perform
all duties incident to the office of Treasurer and such other duties as
may be assigned by the Board or the President.
Section 8.11. Assistant Treasurers.
In the absence or disability of the Treasurer or when so directed
by the Treasurer, any Assistant Treasurer may perform all the duties of
the Treasurer, and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the Treasurer. Each Assistant
Treasurer shall perform such other duties as may be assigned by the
Board, the President, or the Treasurer.
Section 8.12. Compensation of Officers.
The compensation of all officers shall be fixed by the Board or
any committee or officer authorized by the Board. No officer shall be
precluded from receiving such compensation by reason of the fact that
he or she is also a Director of the Corporation.
ARTICLE 9 - NOTICE
Section 9.1. Written Notice.
Whenever written notice is required to be given to any person,
it may be given to the person, either personally or by sending a copy
by first class or express mail, postage prepaid, or by telegram (with
messenger service specified), telex or TWX (with answer back received)
or courier service, charges prepaid, or by facsimile transmission, or
by e-mail, to his or her address (or to his or her telex, TWX or facsimile
number, or e-mail address) appearing on the books of the Corporation
or, in the case of Directors, supplied by him or her to the Corporation
for the purpose of notice. If the notice is sent by mail, telegraph or
courier service, it shall be deemed to have been given when deposited
in the United States mail or with a telegraph office or courier service
for delivery to that person or, in the case of telex or TWX, when
dispatched or, in the case of facsimile or e-mail, when receipt has been
confirmed. A notice of meeting shall specify the place, day and hour
of the meeting and any other information required by the Act. Except
as otherwise provided by the Act or these Bylaws, when a meeting is
adjourned, it shall not be necessary to give any notice of the adjourned
meeting, or of the business to be transacted at an adjourned meeting,
other than by announcement at the meeting at which such adjournment is
taken.
Section 9.2. Waiver by Writing.
Whenever any written notice is required to be given, a waiver in
writing, signed by the person or persons entitled to the notice, whether
before or after the time stated, shall be deemed equivalent to the giving
of the notice. Neither the business to be transacted at, nor the purpose
of, a meeting need be specified in the waiver of notice of the meeting.
Section 9.3. Waiver by Attendance.
Attendance of a person at any meeting shall constitute a waiver
of notice of the meeting except where a person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to
the transaction of any business because the meeting was not lawfully
called or convened.
ARTICLE 10 - CONFLICTS OF INTEREST
Section 10.1. Definitions.
For purposes of this Article:
(a) "Conflicting interest transaction" means a contract,
transaction, or other financial relationship between the corporation
and a Director, or between the corporation and a party related to a
Director, or between the corporation and an entity in which a Director
is a director or officer or has a financial interest.
(b) "A party related to a Director" means a spouse, a descendent,
an ancestor, a sibling, the spouse or descendent of a sibling, an estate
or trust in which the Director or a party related to a Director has a
beneficial interest, or an entity in which a party related to a Director
is a director, officer, or has a financial interest.
Section 10.2. Loans.
No loans shall be made by the Corporation to its Directors or
officers. Any Director or officer who assents to or participates in
the making of any such loan shall be liable to the Corporation for the
amount of such loan until the repayment thereof.
Section 10.3. Validity.
No conflicting interest transaction shall be void or voidable or
be enjoined, set aside, or give rise to an award of damages or other
sanctions in a proceeding by or in the right of the Corporation, solely
because the conflicting interest transaction involves a Director or a
party related to a Director or an entity in which a Director is a director
or officer or has a financial interest or solely because the Director
is present at or participates in the meeting of the Board or of a
committee of the Board that authorizes, approves, or ratifies the
conflicting interest transaction or solely because the Director's vote
is counted for such purpose if:
(a) The material facts as to the Director's relationship or
interest and as to the conflicting interest transaction are disclosed
or are known to the Board or the committee, and the Board or committee
in good faith authorizes, approves, or ratifies the conflicting interest
transaction by the affirmative vote of a majority of the disinterested
Directors, even though the disinterested Directors are less than a
quorum; or
(b) The conflicting interest transaction is fair as to the
Corporation.
Common or interested Directors may be counted in determining the presence
of a quorum at a meeting of the Board or of a committee which authorizes,
approves, or ratifies the conflicting interest transaction.
ARTICLE 11 - INSURANCE
Section 11.1. Insurance.
The Corporation may purchase and maintain insurance on behalf of
any person who is or was a Director or officer of the Corporation or is
or was serving at the request of the Corporation as a director or officer
of another domestic or foreign corporation, partnership, joint venture,
trust, employee benefit plan, or other enterprise against any liability
asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not
the Corporation would have the power to indemnify him or her against
that liability under the Act. The Corporation's payment of premiums
with respect to such insurance coverage shall be provided primarily for
the benefit of the Corporation. To the extent that such insurance
coverage provides a benefit to the insured person, the Corporation's
payment of premiums with respect to such insurance shall be provided in
exchange for the services rendered by the insured person and in a manner
so as not to constitute an excess benefit transaction under section 4958
of the Internal Revenue Code of 1986, as amended.
ARTICLE 12 - AMENDMENTS
Section 12.1. Amendments.
Except as otherwise provided by the Act, the Bylaws of the
Corporation may be amended by a majority vote of the Board at any meeting
after notice of such purpose has been given.
EOT
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