Harmony Institute for Earth Care, Inc.
Article 1--Name, Seal, Offices, and Dissolution
Section 1. Name
The name of the corporation is Harmony Institute for Earth Care, Inc.
Section 2. Seal
The seal of the corporation shall be a circular form bearing the words Harmony Institute for Earth Care, Inc.
Section 3. Business Offices
The principal office of the corporation in the state of Colorado shall be located in Boulder County, State of Colorado, USA. The corporation may have such other offices, either within or without the State of Colorado, as the Board of Trustees may from time to time determine.
Section 4. Dissolution
Subject to the requirements of law and of the Amended and Restated Articles of Incorporation, at any time the board of trustees shall have the power to dissolve the corporation and wind up its affairs by the vote of two-third of the board of trustees. In such case it shall be the duty of said board of trustees to designate by like action a successor nonprofit corporation organized for educational, charitable, or scientific purposes, contributions to which are deductible for federal income tax purposes, to take over all or substantially all of the functions and purposes of the corporation, or if no such successor corporation is so designated, to designate one or more exempt organizations of the kind described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended from time to time (the "Code") as the recipient or recipients to which any property or assets remaining after such winding up of the affairs of the corporation shall be paid over or transferred.
Article 2--Nonprofit Purposes
Section 1. IRC Section 501(c)(3) Purposes
This corporation is organized exclusively for one or more of the purposes as specified in Section 501(c)(3) of the Internal Revenue Code, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under Section 501(c)(3) of the Internal Revenue Code.
Section 2. Specific Objectives and Purposes
The specific objectives and purposes of this corporation shall be:
(1) conduct research to better understand the stability of the climate system under anthropogenic forcing
(2) train the next generation scientists and educators in the area of climate change science in an
interscriplinary and bilingual/cultural context
(3) educate the public about the working of the climate system
(4) promote international communication and collaboration among the scientists and educators, in particular, those between the US and China, through organizing conferences, sponsoring visits of scholars, and online publications.
Article 3--Trustees (directors)
Section 1. General powers
Subject to the provisions of the laws of this state and any limitations in the articles of incorporation and these bylaws relating to action required or permitted to be taken or approved by the members, if any, of this corporation, the activities and affairs of this corporation shall be conducted and all corporate powers shall be exercised by or under the direction of the board. Trustees need not be residents of the State of Colorado.
Section 2. Number
The corporation shall have 5 trustees (directors) and collectively they shall be known as the board of trustees. The corporation may increase the number of the trustees to 7 if the initial board of trustees (directors) deem the increase beneficial to the corporationís growth.
Section 3. Qualifications
(1) Strong commitment to HIECís mission
(2)Willingness to represent and promote HIEC
(4)Ability to work effectively as a team member
(5)Ability to work effectively towards common goals
(6)Time available to fulfill the duties of the trusteeship
Section 4. Term of Office
Each trustee shall hold office for a period of 2 years and until his or her successor is elected and qualifies.
Section 5. Election and Tenure of Elected Trustees
The board of trustees elects new members from the recommendations by the chairperson of the board.
Section 6. Compensation
Trustees shall serve without compensation except that a reasonable fee may be paid to them for attending regular and special meetings of the board. In addition, they shall be allowed reasonable advancement or reimbursement of expenses incurred in the performance of their duties. Any payments to trustees shall be approved in advance in accordance with this corporation's conflict of interest policy, as set forth in Article 9 of these bylaws. Nothing herein shall be construed
to preclude any Trustee from serving the corporation in some other capacity and
receiving compensation therefor.
Section 7. Vacancies
Any vacancy occurring in the Board of Trustees by reason of the death, resignation, removal or disqualification may be filled by the vote of a majority of the remaining Trustees. The chair of the board provides the candidates for the replacement.
Section 8. Removal.
Any elected Trustee, may be removed from office with or without cause by the vote of two-thirds of the members of the board, present at a meeting at which a quorum is present.
Section 9. Annual Meeting
The annual meeting of the Board of Trustees shall be held during the first four months of each calendar year on such date and at such time as may be designated by resolution of the Board of Trustees from time to time.
Section 10. Regular Meetings
The Board of Trustees shall have such regular meetings in each year as the Board of Trustees may determine from time to time; provided, however, the Board of Trustees shall schedule at least one regular meetings in each year in addition to its annual meeting.
Section 11. Special Meetings
Special meetings may be called by the Chairperson of the Board, or the Vice Chairperson of the Board when acting for the Chairperson, and, upon the written request filed with the Secretary of one-third or more of the Trustees in office, shall be called by the Secretary.
Section 12. Place of Meeting
Any meeting of the Board of Trustees may be held within or without the State of Colorado as the Board of Trustees may determine, but in the absence of any other determination by the Board of Trustees as to the place of meeting, it shall be held at the principal offices of the corporation in Boulder, Colorado.
Section 13. Notice of Meetings
Notice of each meeting of Trustees, whether annual, regular or special, shall be given to each Trustee at least fourteen days prior to the date of such meeting. Notice may be given in person, by telephone, facsimile, electronic mail, or other form of wire or wireless communication, or by mail or private carrier. If mailed, such notice shall be deemed given when deposited in the United States mail, postage prepaid, addressed to the Trustee at such Trustee's residence or place of business. In all other cases, notice shall be given when received. The notice of all meetings shall state the place, date and hour thereof, but need not, unless otherwise required by law, state the purpose or purposes thereof.
Section 14. Quorum
A majority of the members of the Board of Trustees then holding office shall constitute a quorum for the transaction of business at any meeting of the Board of Trustees. If a quorum is not present at a meeting or at any adjournment thereof, then those present may adjourn such meeting or adjourned meeting. Written notice of the date, time and place of the adjourned meeting shall be given to each Trustee at least ten days prior to the adjourned meeting, and thereupon any business may be transacted which might have been transacted at the meeting as originally called had such original meeting been held.
Section 15. Manner of Acting
The act of a majority of the Trustees present at a meeting at which a quorum is present shall be the act of the Board of Trustees, unless the act of a greater number is required by law or by these bylaws.
Section 16. Action by Unanimous Written Consent.
Any action required by law to be taken at a meeting of the Board of Trustees or any committee thereof, or any action which may be taken at a meeting of the Board of Trustees of any committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Trustees or all of the members of any committee thereof, as applicable.
Section 17. Meetings by Telephone/Internet
The Board of Trustees or any committee thereof may permit any Trustee to participate in an annual, or regular, or special meeting by, or conduct the meeting through the use of, any means of communication by which all Trustees participating may hear each other during the meeting. A Trustee participating in a meeting by this means is deemed to be present in person at the meeting.
Section 18. Quorum for Meetings
A quorum shall consist three of the members of the board of trustees. Except as otherwise provided under the articles of incorporation, these bylaws, or provisions of law, no business shall be considered by the board at any meeting at which the required quorum is not present, and the only motion which the chair shall entertain at such meeting is a motion to adjourn.
Section 19. Majority Action as Board Action
Every act or decision done or made by a majority of the trustees present at a meeting duly held at which a quorum is present is the act of the board of trustees, unless the articles of incorporation, these bylaws, or provisions of law require a greater percentage or different voting rules for approval of a matter by the board.
Section 20. Conduct of Meetings
Meetings of the board of trustees shall be presided over by the chairperson of the board, or, if no such person has been so designated, or in his or her absence, the vice chairperson of the board, the president of the corporation, or in his or her absence, by the vice president of the corporation, or in the absence of each of these persons, by a chairperson chosen by a majority of the directors present at the meeting. The secretary of the corporation shall act as secretary of all meetings of the board, provided that, in his or her absence, the presiding officer shall appoint another person to act as secretary of the meeting.
Section 21. Nonliability of trustees
The trustees shall not be personally liable for the debts, liabilities, or other obligations of the corporation.
Section 22. Indemnification by Corporation of trustees and Officers
The trustees and officers of the corporation shall be indemnified by the corporation to the fullest extent permissible under the laws of this state.
Section 23. Insurance for Corporate Agents
Except as may be otherwise provided under provisions of law, the board of trustees may adopt a resolution authorizing the purchase and maintenance of insurance on behalf of any agent of the corporation (including a trustee, officer, employee, or other agent of the corporation) against liabilities 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 articles of incorporation, these bylaws, or provisions of law.
Article 4-- Officers
Section 1. Designation of Officers
The officers of the corporation shall be a president, a secretary, and a treasurer. The corporation may also have a chairperson of the board, a vice chairperson of the board, one or more vice presidents, one or more assistant secretaries, assistant treasurers, and other such officers with such titles as may be determined from time to time by the board of trustees.
Section 2. Qualifications
Any person may serve as officer of this corporation.
Section 3. Election and Term of Office
Officers shall be elected by the board of trustees, at any time, and each officer shall hold office until he or she resigns or is removed or is otherwise disqualified to serve, or until his or her successor shall be elected and qualified, whichever occurs first.
Section 4. Removal and Resignation
Any officer may be removed, either with or without cause, by the board of trustees, at any time. Any officer may resign at any time by giving written notice to the board of trustees or to the president or secretary of the corporation. Any such resignation shall take effect at the date of receipt of such notice or at any later date specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. The above provisions of this section shall be superseded by any conflicting terms of a contract which has been approved or ratified by the board of trustees relating to the employment of any officer of the corporation.
Section 5. Vacancies
Any vacancy caused by the death, resignation, removal, disqualification, or otherwise, of any officer shall be filled by the board of turstees. In the event of a vacancy in any office other than that of president, such vacancy may be filled temporarily by appointment by the president until such time as the board shall fill the vacancy. Vacancies occurring in offices of officers appointed at the discretion of the board may or may not be filled as the board shall determine.
Section 6. Duties of President
The president shall be the chief executive officer of the corporation and shall, subject to the control of the board of trustees, supervise and control the affairs of the corporation and the activities of the officers. He or she shall perform all duties incident to his or her office and such other duties as may be required by law, by the articles of incorporation, or by these bylaws, or which may be prescribed from time to time by the board of trustees. Unless another person is specifically appointed as chairperson of the board of trustees, the president shall preside at all meetings of the board of trustees and, if this corporation has members, at all meetings of the members. Except as otherwise expressly provided by law, by the articles of incorporation, or by these bylaws, he or she shall, in the name of the corporation, execute such deeds, mortgages, bonds, contracts, checks, or other instruments which may from time to time be authorized by the board of directors.
Section 7. Duties of Vice Presidents
In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the Board or, if not ranked, a vice president designated by the Board, shall perform all the duties of a president. When acting as a president, the appropriate vice president shall have all the powers of, and be subject to all the restrictions upon, that 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, these bylaws, the chairman of the Board, and the president.
Section 8. Duties of Secretary
The secretary shall:
Certify and keep at the principal office of the corporation the original, or a copy, of these bylaws as amended or otherwise altered to date. Keep at the principal office of the corporation or at such other place as the board may determine, a book of minutes of all meetings of the trustees, and, if applicable, meetings of committees of trustees and of members, recording therein the time and place of holding, whether regular or special, how called, how notice thereof was given, the names of those present or represented at the meeting, and the proceedings thereof.
Ensure that the minutes of meetings of the corporation, any written consents approving action taken without a meeting, and any supporting documents pertaining to meetings, minutes, and consents shall be contemporaneously recorded in the corporate records of this corporation. "Contemporaneously" in this context means that the minutes, consents, and supporting documents shall be recorded in the records of this corporation by the later of (1) the next meeting of the board, committee, membership, or other body for which the minutes, consents, or supporting documents are being recorded, or (2) sixty (60) days after the date of the meeting or written consent.
See that all notices are duly given in accordance with the provisions of these bylaws or as required by law. Be custodian of the records and of the seal of the corporation and affix the seal, as authorized by law or the provisions of these bylaws, to duly executed documents of the corporation. Keep at the principal office of the corporation a membership book containing the name and address of each and any members, and, in the case where any membership has been terminated, he or she shall record such fact in the membership book together with the date on which such membership ceased. Exhibit at all reasonable times to any trustees of the corporation, or to his or her agent or attorney, on request therefor, the bylaws, the membership book, and the minutes of the proceedings of the trustees of the corporation. In general, perform all duties incident to the office of secretary and such other duties as may be required by law, by the articles of incorporation, or by these bylaws, or which may be assigned to him or her from time to time by the board of trustees.
Section 9. Duties of Treasurer
The treasurer shall: Have charge and custody of, and be responsible for, all funds and securities of the corporation, and deposit all such funds in the name of the corporation in such banks, trust companies, or other depositories as shall be selected by the board of trustees. Receive, and give receipt for, monies due and payable to the corporation from any source whatsoever. Disburse, or cause to be disbursed, the funds of the corporation as may be directed by the board of trustees, taking proper vouchers for such disbursements. Keep and maintain adequate and correct accounts of the corporation's properties and business transactions, including accounts of its assets, liabilities, receipts, disbursements, gains, and losses. Exhibit at all reasonable times the books of account and financial records to any trustee of the corporation, or to his or her agent or attorney, on request therefor. Render to the president and trustees, whenever requested, an account of any or all of his or her transactions as treasurer and of the financial condition of the corporation. Prepare, or cause to be prepared, and certify, or cause to be certified, the financial statements to be included in any required reports. In general, perform all duties incident to the office of treasurer and such other duties as may be required by law, by the articles of incorporation of the corporation, or by these bylaws, or which may be assigned to him or her from time to time by the board of trustees.
Section 10. Compensation
The salaries of the officers, if any, shall be fixed from time to time by resolution of the board of trustees. In all cases, any salaries received by officers of this corporation shall be reasonable and given in return for services actually rendered to or for the corporation. All officer salaries shall be approved in advance in accordance with this corporation's conflict of interest policy, as set forth in Article 9 of these bylaws.
Section 1. Executive Committee
The board of trustees may, by a majority vote of its members, designate an Executive Committee consisting of three board members and may delegate to such committee the powers and authority of the board in the management of the business and affairs of the corporation, to the extent permitted, and, except as may otherwise be provided, by provisions of law. By a majority vote of its members, the board may at any time revoke or modify any or all of the executive committee authority so delegated, increase or decrease but not below two (2) the number of the members of the executive committee, and fill vacancies on the Executive Committee from the members of the board. The executive committee shall keep regular minutes of its proceedings, cause them to be filed with the corporate records, and report the same to the board from time to time as the board may require.
Section 2. Other Committees
The corporation shall have such other committees as may from time to time be designated by resolution of the board of directors. These committees may consist of persons who are not also members of the board and shall act in an advisory capacity to the board.
Section 3. Meetings and Action of Committees
Meetings and action of committees shall be governed by, noticed, held, and taken in accordance with the provisions of these bylaws concerning meetings of the board of trustees, with such changes in the context of such bylaw provisions as are necessary to substitute the committee and its members for the board of trustees and its members, except that the time for regular and special meetings of committees may be fixed by resolution of the board of trustees or by the committee. The board of trustees may also adopt rules and regulations pertaining to the conduct of meetings of committees to the extent that such rules and regulations are not inconsistent with the provisions of these bylaws.
Execution of Instruments, Deposits, and Funds
Section 1. Execution of Instruments
The board of trustees, except as otherwise provided in these bylaws, may by resolution authorize any officer or agent of the corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Unless so authorized, no officer, agent, or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable monetarily for any purpose or in any amount.
Section 2. Checks and Notes
Except as otherwise specifically determined by resolution of the board of turstees, or as otherwise required by law, checks, drafts, promissory notes, orders for the payment of money, and other evidence of indebtedness of the corporation shall be signed by the treasurer and countersigned by the president of the corporation.
Section 3. 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 trustees may select.
Section 4. Gifts
The board of trustees may accept on behalf of the corporation any contribution, gift, bequest, or devise for the nonprofit purposes of this corporation.
Corporate Records, Reports, and Seal
Section 1. Maintenance of Corporate Records
The corporation shall keep at its principal office:
a. Minutes of all meetings of directors, committees of the board, and, if this corporation has members, of all meetings of members, indicating the time and place of holding such meetings, whether regular or special, how called, the notice given, and the names of those present and the proceedings thereof; b. Adequate and correct books and records of account, including accounts of its properties and business transactions and accounts of its assets, liabilities, receipts, disbursements, gains, and losses; c. A record of its members, if any, indicating their names and addresses and, if applicable, the class of membership held by each member and the termination date of any membership; d. A copy of the corporation's articles of incorporation and bylaws as amended to date, which shall be open to inspection by the members, if any, of the corporation at all reasonable times during office hours.
Section 2. Corporate Seal
The board of trustees may adopt, use, and at will alter, a corporate seal. Such seal shall be kept at the principal office of the corporation. Failure to affix the seal to corporate instruments, however, shall not affect the validity of any such instrument.
Section 3. Trustees' Inspection Rights
Every trustee 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, and shall have such other rights to inspect the books, records, and properties of this corporation as may be required under the articles of incorporation, other provisions of these bylaws, and provisions of law.
Section 4. Right to Copy and Make Extracts
Any inspection under the provisions of this article may be made in person or by agent or attorney and the right to inspection shall include the right to copy and make extracts.
Section 5. Periodic Report
The board shall cause any annual or periodic report required under law to be prepared and delivered to an office of this state or to the members, if any, of this corporation, to be so prepared and delivered within the time limits set by law.
IRC 501(c)(3) Tax Exemption Provisions
Section 1. Limitations on Activities
No substantial part of the activities of this corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation (except as otherwise provided by Section 501(h) of the Internal Revenue Code), and this corporation shall not participate in, or intervene in (including the publishing or distribution of statements), any political campaign on behalf of, or in opposition to, any candidate for public office. Notwithstanding any other provisions of these bylaws, this corporation shall not carry on any 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.
Section 2. Prohibition Against Private Inurement
No part of the net earnings of this corporation shall inure to the benefit of, or be distributable to, its members, directors or trustees, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes of this corporation.
Section 3. Distribution of Assets
Upon the dissolution of this corporation, its assets remaining after payment, or provision for payment, of all debts and liabilities of this corporation, shall be distributed for one or more exempt purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code or shall be distributed to the federal government, or to a state or local government, for a public purpose. Such distribution shall be made in accordance with all applicable provisions of the laws of this state.
Section 4. Private Foundation Requirements and Restrictions
In any taxable year in which this corporation is a private foundation as described in Section 509(a) of the Internal Revenue Code, the corporation 1) shall distribute its income for said period at such time and manner as not to subject it to tax under Section 4942 of the Internal Revenue Code; 2) shall not engage in any act of self-dealing as defined in Section 4941(d) of the Internal Revenue Code; 3) shall not retain any excess business holdings as defined in Section 4943(c) of the Internal Revenue Code; 4) shall not make any investments in such manner as to subject the corporation to tax under Section 4944 of the Internal Revenue Code; and 5) shall not make any taxable expenditures as defined in Section 4945(d) of the Internal Revenue Code.
Conflict of Interest and
Compensation Approval Policies
Section 1. Purpose of Conflict of Interest Policy
The purpose of this conflict of interest policy is to protect this tax-exempt corporation's interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or trustees of the corporation or any "disqualified person" as defined in Section 4958(f)(1) of the Internal Revenue Code and as amplified by Section 53.4958-3 of the IRS Regulations and which might result in a possible "excess benefit transaction" as defined in Section 4958(c)(1)(A) of the Internal Revenue Code and as amplified by Section 53.4958 of the IRS Regulations. This policy is intended to supplement but not replace any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations.
Section 2. Definitions
a. Interested Person. Any director, principal officer, member of a committee with governing board delegated powers, or any other person who is a "disqualified person" as defined in Section 4958(f)(1) of the Internal Revenue Code and as amplified by Section 53.4958-3 of the IRS Regulations, who has a direct or indirect financial interest, as defined below, is an interested person.
b. Financial Interest. A person has a financial interest if the person has, directly or indirectly, through business, investment, or family:
1. An ownership or investment interest in any entity with which the corporation has a transaction or arrangement; 2. A compensation arrangement with the corporation or with any entity or individual with which the corporation has a transaction or arrangement; or 3. A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the corporation is negotiating a transaction or arrangement.
Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial. A financial interest is not necessarily a conflict of interest. Under Section 3, paragraph B, a person who has a financial interest may have a conflict of interest only if the appropriate governing board or committee decides that a conflict of interest exists.
Section 3. Conflict of Interest Avoidance Procedures
a. Duty to Disclose. In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the trustees and members of committees with governing board delegated powers considering the proposed transaction or arrangement.
b. Determining Whether a Conflict of Interest Exists. After disclosure of the financial interest and all material facts, and after any discussion with the interested person, he/she shall leave the governing board or committee meeting while the determination of a conflict of interest is discussed and voted upon. The remaining board or committee members shall decide if a conflict of interest exists.
c. Procedures for Addressing the Conflict of Interest. An interested person may make a presentation at the governing board or committee meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest. The chairperson of the governing board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement. After exercising due diligence, the governing board or committee shall determine whether the corporation can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest. If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the governing board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the corporation's best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination, it shall make its decision as to whether to enter into the transaction or arrangement.
d. Violations of the Conflicts of Interest Policy. If the governing board or committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose. If, after hearing the member's response and after making further investigation as warranted by the circumstances, the governing board or committee determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
Section 4. Records of Board and Board Committee Proceedings
The minutes of meetings of the governing board and all committees with board delegated powers shall contain:
a. The names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the governing board's or committee's decision as to whether a conflict of interest in fact existed. b. The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.
Section 5. Compensation Approval Policies
A voting member of the governing board who receives compensation, directly or indirectly, from the corporation for services is precluded from voting on matters pertaining to that member's compensation.
A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the corporation for services is precluded from voting on matters pertaining to that member's compensation.
No voting member of the governing board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the corporation, either individually or collectively, is prohibited from providing information to any committee regarding compensation.
When approving compensation for trustees, officers and employees, contractors, and any other compensation contract or arrangement, in addition to complying with the conflict of interest requirements and policies contained in the preceding and following sections of this article as well as the preceding paragraphs of this section of this article, the board or a duly constituted compensation committee of the board shall also comply with the following additional requirements and procedures:
a. the terms of compensation shall be approved by the board or compensation committee prior to the first payment of compensation;
b. all members of the board or compensation committee who approve compensation arrangements must not have a conflict of interest with respect to the compensation arrangement as specified in IRS Regulation Section 53.4958-6(c)(iii), which generally requires that each board member or committee member approving a compensation arrangement between this organization and a "disqualified person" (as defined in Section 4958(f)(1) of the Internal Revenue Code and as amplified by Section 53.4958-3 of the IRS Regulations):
1. is not the person who is the subject of the compensation arrangement, or a family member of such person; 2. is not in an employment relationship subject to the direction or control of the person who is the subject of the compensation arrangement; 3. does not receive compensation or other payments subject to approval by the person who is the subject of the compensation arrangement; 4. has no material financial interest affected by the compensation arrangement; and 5. does not approve a transaction providing economic benefits to the person who is the subject of the compensation arrangement, who in turn has approved or will approve a transaction providing benefits to the board or committee member.
c. the board or compensation committee shall obtain and rely upon appropriate data as to comparability prior to approving the terms of compensation. Appropriate data may include the following:
1. compensation levels paid by similarly situated organizations, both taxable and tax-exempt, for functionally comparable positions. "Similarly situated" organizations are those of a similar size, purpose, and with similar resources; 2. the availability of similar services in the geographic area of this organization; 3. current compensation surveys compiled by independent firms; 4. actual written offers from similar institutions competing for the services of the person who is the subject of the compensation arrangement;
As allowed by IRS Regulation 4958-6, if this organization has average annual gross receipts (including contributions) for its three prior tax years of less than $1 million, the board or compensation committee will have obtained and relied upon appropriate data as to comparability if it obtains and relies upon data on compensation paid by three comparable organizations in the same or similar communities for similar services.
d. the terms of compensation and the basis for approving them shall be recorded in written minutes of the meeting of the board or compensation committee that approved the compensation. Such documentation shall include:
1. the terms of the compensation arrangement and the date it was approved; 2. the members of the board or compensation committee who were present during debate on the transaction, those who voted on it, and the votes cast by each board or committee member; 3. the comparability data obtained and relied upon and how the data was obtained; 4. If the board or compensation committee determines that reasonable compensation for a specific position in this organization or for providing services under any other compensation arrangement with this organization is higher or lower than the range of comparability data obtained, the board or committee shall record in the minutes of the meeting the basis for its determination; 5. If the board or committee makes adjustments to comparability data due to geographic area or other specific conditions, these adjustments and the reasons for them shall be recorded in the minutes of the board or committee meeting; 6. any actions taken with respect to determining if a board or committee member had a conflict of interest with respect to the compensation arrangement, and if so, actions taken to make sure the member with the conflict of interest did not affect or participate in the approval of the transaction (for example, a notation in the records that after a finding of conflict of interest by a member, the member with the conflict of interest was asked to, and did, leave the meeting prior to a discussion of the compensation arrangement and a taking of the votes to approve the arrangement); 7. The minutes of board or committee meetings at which compensation arrangements are approved must be prepared before the later of the date of the next board or committee meeting or 60 days after the final actions of the board or committee are taken with respect to the approval of the compensation arrangements. The minutes must be reviewed and approved by the board and committee as reasonable, accurate, and complete within a reasonable period thereafter, normally prior to or at the next board or committee meeting following final action on the arrangement by the board or committee.
Section 6. Annual Statements
Each trustee, principal officer, and member of a committee with governing board delegated powers shall annually sign a statement which affirms such person:
a. has received a copy of the conflicts of interest policy; b. has read and understands the policy; c. has agreed to comply with the policy; and d. understands the corporation is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
Section 7. Periodic Reviews
To ensure the corporation operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted. The periodic reviews shall, at a minimum, include the following subjects:
a. Whether compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm's-length bargaining. b. Whether partnerships, joint ventures, and arrangements with management organizations conform to the corporation's written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes, and do not result in inurement, impermissible private benefit, or in an excess benefit transaction.
Section 8. Use of Outside Experts
When conducting the periodic reviews as provided for in Section 7, the corporation may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the governing board of its responsibility for ensuring periodic reviews are conducted.
Amendment of Bylaws
Section 1. Amendment
Subject to the power of the members, if any, of this corporation to adopt, amend, or repeal the bylaws of this corporation and except as may otherwise be specified under provisions of law, these bylaws, or any of them, may be altered, amended, or repealed and new bylaws adopted by approval of the board of directors.
Construction and Terms
If there is any conflict between the provisions of these bylaws and the articles of incorporation of this corporation, the provisions of the articles of incorporation shall govern. Should any of the provisions or portions of these bylaws be held unenforceable or invalid for any reason, the remaining provisions and portions of these bylaws shall be unaffected by such holding. All references in these bylaws to the articles of incorporation shall be to the articles of incorporation, articles of organization, certificate of incorporation, organizational charter, corporate charter, or other founding document of this corporation filed with an office of this state and used to establish the legal existence of this corporation. All references in these bylaws to a section or sections of the Internal Revenue Code shall be to such sections of the Internal Revenue Code of 1986 as amended from time to time, or to corresponding provisions of any future federal tax code.