SAMPLE DOCUMENT. Date: 2010 USE STATEMENT & COPYRIGHT NOTICE

Transcription

1 SAMPLE DOCUMENT Type of Document: Bylaws for Museums or Parent Organizations Museum Name: San Diego Air & Space Museum Date: 2010 Type: Specialized: Air & Space Budget Size: $1 million to $4.9 million Budget Year: 2015 Governance Type: Private, Nonprofit Organization Notes on strengths or special features: Name, Location, & Offices Purpose Membership Board of Trustees Number, Term, & Election Qualifications Quorum Vacancies, Removal, & Resignation Authority & Responsibilities Meetings Action Without Meeting Honorary Trustees Officers Number, Term, & Election Accredited: Yes Vacancies, Removal, & Resignation Authority & Responsibilities Committees Composition Authority & Responsibilities Advisory Groups Support Groups Director s Authority & Responsibilities Fiscal Issues Indemnification Dissolution Amendments Other: Non-partisan activities USE STATEMENT & COPYRIGHT NOTICE The AAM Information Center has provided this sample document. It serves as an example of how one museum addresses a particular issue. Museums should compose original materials based on their unique circumstances. Any document produced by the recipient should not substantially use the contents of this sample as the basis. Materials in the AAM Information Center are provided "as is," without any guarantee or warranty of any kind, expressed or implied. NOTICE CONCERNING COPYRIGHT RESTRICTIONS Under certain conditions specified in the copyright law of the United States (Title 17, United States Code), libraries and archives may furnish a photocopy or other reproduction. The photocopy or reproduction may not be used for any purpose other than private study, scholarship or research. If a user makes a request for, or later uses, a photocopy or reproduction for purposes in excess of fair use, that user may be liable for copyright infringement.

2 OF, INC. A California Nonprofit Public Benefit Corporation ARTICLE I NAME The name of this corporation shall be San Diego Air & Space Museum, Inc. ARTICLE II OFFICES SECTION 1. PRINCIPAL OFFICE The principal office for the transaction of the business of this corporation ("principal business office") is located at 2001 Pan American Plaza, San Diego California. The Directors may change the principal business office from one location to another. Any change of this location shall be noted by the secretary on these bylaws opposite this Section, or this Section may be amended to state the new location. SECTION 2. OTHER OFFICES The Board of Directors may at any time establish branch or subordinate offices at any place or places where the corporation is qualified to do business. PAGE 1 OF 27

3 ARTICLE III PURPOSES OF THE CORPORATION The purposes of this corporation are charitable, historical, scientific and educational. Its specific purposes are to (1) celebrate aviation and space flight history through preservation of significant artifacts, presentation of dynamic exhibits, and commemoration of the men and women who forged aerospace history, (2) educate the public about the social and historical significance of aerospace technology and its promise for the future, and (3) inspire students to excel in technology, mathematics and the sciences, and encourage all visitors to become life-long learners in support of aerospace advancement. ARTICLE IV NONPARTISAN ACTIVITIES This corporation has been formed under the California Nonprofit Corporation Law for the public purposes described above, and it shall be nonprofit and nonpartisan. No substantial part of the activities of the corporation shall consist of the publication or dissemination of materials with the purpose of attempting to influence legislation, and the corporation shall not participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office or for or against any cause or measure being submitted to the people for a vote. The San Diego Air & Space Museum premises shall not be utilized for the purpose of supporting, working, or campaigning for the nomination or election to any public office whether partisan or non-partisan. The corporation shall not, except in an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the purposes described above. PAGE 2 OF 27 ARTICLE V DEDICATION OF ASSETS The properties and assets of this nonprofit corporation are irrevocably dedicated to charitable public benefit purposes. No part of the net earnings, properties, or assets of this corporation, on dissolution or otherwise, shall inure to the benefit of any private person or individual, or any Director of this corporation. On liquidation or dissolution, all properties and assets and obligations shall be distributed and paid over to the San Diego Air & Space Museum Foundation, and if that organization is not in existence, then to a nonprofit fund, foundation, or

4 corporation that is organized and operated exclusively for charitable purposes, that has established its exempt status under Internal Revenue Code sections 170(b)(1)(A) and 501(c)(3) and whose charitable purpose is as closely aligned to that of San Diego Air & Space Museum as possible. The Corporation shall have no members. ARTICLE VI MEMBERS SECTION 1. NO MEMBERS SECTION 2. ASSOCIATES; NONVOTING MEMBERS The Board of Directors may, in its discretion, admit individuals to one or more classes of nonvoting members or associates and the Corporation shall have the right to refer to persons associated with it as "members" even though such persons are not member within the meaning of Section 5056 of the California Nonprofit Corporation Law, and no such reference shall construe anyone a member as defined in such section. The class or classes shall only have such rights and obligations as the Board finds appropriate and that are not inconsistent with the Bylaws or the Articles of Incorporation. PAGE 3 OF 27 ARTICLE VII DIRECTORS SECTION 1. POWERS OF THE CORPORATION (a) General Corporate Powers. Subject to the provisions of the California Nonprofit Corporation Law and other related provisions of the laws of California and any limitations in the Articles of Incorporation and these Bylaws, the business activities and affairs of the corporation shall be managed, and all corporate powers shall be exercised, by or under the direction of the Board of Directors. 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.

5 (b) Specific Powers. Without prejudice to the general powers stated just above, and subject to any limitations contained in the Articles of Incorporation or these Bylaws and in compliance with any other applicable laws, this corporation, in carrying out its activities, shall have the same powers as an individual to do all the things necessary or convenient to carry out its affairs and all of the specific powers granted in California Nonprofit Corporation Law including, without limitation, the power: PAGE 4 OF 27 (1) to sue and be sued, complain, and defend in its corporate name; (2) to have a corporate seal, which may be altered at will, and to use it or a facsimile of the seal by impressing, affixing, or in any other manner reproducing it; (3) to make and amend bylaws, consistent with its articles of incorporation or with the laws of this state, for regulating and managing the affairs of the corporation; (4) to purchase, receive, lease, or otherwise acquire and to own, hold, improve, use, and otherwise deal with real or personal property or any legal or equitable interest in property, wherever located; (5) to sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property; (6) to purchase, receive, subscribe for, or otherwise acquire any other entity; to own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of any other entity; and to deal in and with shares or other interests in or obligations of any other entity; (7) to make contracts and guaranties; to incur liabilities; to borrow money; to issue notes, bonds, and other obligations; and to secure any of its obligations by mortgage or pledge of any of its property, franchises, or income; (8) to lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment; (9) to be a promoter, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity; (10) to conduct its activities, locate offices, and exercise the powers granted by this chapter in the state or out of the state; (11) to elect or appoint directors, officers, employees, and agents of the

6 corporation; to define their duties; and to fix their compensation; (12) to pay pensions and establish pension plans, pension trusts, and other benefit and incentive plans for any or all of its current or former officers, employees, and agents; SECTION 2. NUMBER AND QUALIFICATION OF DIRECTORS The Board of Directors shall consist of no more than thirty-three (33) Directors, unless changed by amendment to these bylaws, but in no event fewer than three persons at any time. The specific number authorized to serve at any time shall be set by a majority vote of the Board and recorded in the Minutes of the corporation. Directors need not be residents of the State of California. SECTION 3. ELECTION AND TERM OF OFFICE OF DIRECTORS Persons associated with the corporation who are in good standing, are eligible to be directors. All Directors shall be elected to a [ four ] year term of office. Those elected at other than the year-end meeting to fill vacancies will serve [ four ] years from the nearest annual meeting date. Directors may serve two [four ] year terms, and then must go off the Board for at least one year before becoming a candidate for a new term. Any Director meeting this requirement, upon reelection, will be eligible for an additional two four year terms. In cases of special circumstances, a Director who has completed his/her two full terms may be extended for one additional year by majority vote of the Board. Each Director, including a Director elected or appointed to fill a vacancy or elected at a special meeting, shall hold office until expiration of the term for which elected and until a successor has been elected and qualified. Election shall be by a majority of the Directors then in office, unless otherwise stated in these Bylaws. SECTION 4. VACANCIES (a) Events Causing Vacancy. A vacancy or vacancies in the Board of Directors shall be deemed to exist on the occurrence of the following: (i) the death or resignation of any Director; PAGE 5 OF 27

7 (ii) the removal of a Director without cause pursuant to California Nonprofit Corporation Law by approval of two-thirds of Directors then in office; (iii) the resolution of the Board of Directors of a vacancy of the office of a Director who has been declared of unsound mind by an order of court or convicted of a felony, found by a court to have engaged in fraud or dishonest conduct or gross abuse of authority or discretion or has been found by final order or judgment of any court to have breached any duty under California Nonprofit Corporation Law pertaining to directors of nonprofit organizations; PAGE 6 OF 27 (iv) the increase of the authorized number of Directors; (v) the breach of duty (if the Board has good cause to suspect that a Director has breached a duty to the corporation under California Nonprofit Corporation Law, then it may suspend the Director pending an investigation of the misconduct; removal shall require a majority vote of the full Board of Directors finding that the Director has contravened the mission of the organization and upon adjudication by the Board, a Director may be either reinstated or removed); and (vi) the absence from one-half of the regular Board meetings in any fiscal year without excuse (he or she will be deemed to have resigned and his or her seat will be deemed vacant), unless (a) the Director requests a leave of absence for a limited period of time, and the leave is approved by the Directors at a regular or special meeting (if such leave is granted, the number of Board members will be reduced by one in determining whether a quorum is or is not present), (b) the Director suffers from an illness or disability that prevents him or her from attending meetings, which waives the automatic removal procedure of this subsection; or (c) the Board, by resolution of the majority of Board members then in office, agrees that a Director who has missed one-half of the meetings may be reinstated. Excuse from attendance shall be delivered to the Chairman or any one of the officers of the corporation (a) by personal delivery or written notice; (b) by first-class mail, postage paid; (c) by telephone communication, either directly to the Chairman or officer or to a voice messaging system, (d) by facsimile, or (e) by . (b) Resignations. Except as provided in this paragraph, any Director may resign, which resignation shall be effective immediately on giving written notice to the full

8 Board of Directors, Chairman of the Board, or Secretary of the Corporation. If the notice is given to any particular officer, that officer has a duty to notify the full Board prior to the next Board meeting. The resignation will not be effective immediately if the notice specifies a later time for the resignation to become effective. If the resignation of a Director is effective at a future time, the Board of Directors may elect a successor to take office as of the date when resignation becomes effective. Except upon notice to the California Attorney General, no Director may resign where the corporation would then be left without a duly elected Director or Directors in charge of its affairs. (c) Appointment Upon Vacancy of Director. If a Vacancy is caused by the inability of a Director to serve his or her complete term, the Governance Committee shall nominate a replacement and such nomination shall be approved by majority vote of the full Board. (d) No Vacancy On Reduction of Number of Directors. No reduction of the authorized number of Directors shall have the effect of removing any Director before that Director s term of office expires. SECTION 5. PRESIDENT/CEO NOT A DIRECTOR OF CORPORATION The President/CEO shall be a staff position and is not a member of the Board of Directors, although he or she may be an officer of the corporation. Attendance at the Board meetings is expected of the President/CEO; however, the President/CEO shall not have a vote. SECTION 6. TIME AND PLACE OF MEETINGS; MEETINGS BY TELEPHONE OR ELECTRONIC MEDIA (a) Time and Place of Regular Meetings. Regular meetings of the Board of Directors are to be held a minimum of four times per year, at any place within or outside the State of California that has been designated on a schedule fixed by resolution of the board or by the bylaws. In the absence of designation of place, regular meetings shall be held at the principal business office of the corporation. Notwithstanding the above provisions of this Section, a regular or special meeting of the Board of Directors may be held at any location. (b) Notice of Regular Meetings. Unless regular meetings are fixed by schedule, notice of a meeting must be given to all Directors, by telephone, mail, facsimile, or , at least four (4) days in advance of the meeting, or at the previous Board meeting. All waivers, consents, and approvals shall be filed with the minutes of the meeting. (c) Annual Meeting. The last regularly scheduled meeting of the fiscal year shall be the annual meeting. PAGE 7 OF 27

9 SECTION 7. SPECIAL MEETINGS (a) Authority to Call. Special meetings of the Board of Directors for any purpose may be called at any time by the Chairman of the Board or by a quorum (one-third of current directors in office) of the then current Board. (b) Notice (i) Manner of Giving. Notice of the time and place of special meetings shall be given to each Director by one of the following methods: (a) by personal delivery or written notice; (b) by first-class mail, postage paid; (c) by telephone communication, either directly to the Director, to a person at the Director s office who would reasonably be expected to communicate such notice promptly to the Director, or to a voice messaging system, (d) by facsimile, or (e) by . All such notices shall be given or sent to a Director s address, telephone or facsimile number, or address as shown on the records of the corporation. (ii) Time Requirements. Notices sent by first class mail shall be deposited into a United States mail box at least four (4) days before the time set for the meeting. Notices given by personal delivery, telephone, facsimile or shall be delivered, telephoned, or sent at least two days ( 48 hours) before the time set for the meeting. (iii) Notice Contents. The notice shall state the time and place for the meeting. However, it need not specify the purpose of meeting, or the place of the meeting, if it is to be held at the principal business office of the corporation. SECTION 8. QUORUM (a) Quorum. No fewer than the greater of one-third of the directors then in office or two directors shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 11 of this Article VII. 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 of Directors, subject to the provisions of the California Nonprofit Public Benefit Corporation Law, especially those provisions relating to (i) approval of contracts or transactions in which a Director has a direct or indirect material financial interest, (ii) appointment of committees, and (iii) indemnification of Directors and (iv) approval of certain transactions between corporations having common Directorships. A meeting at which a quorum is initially PAGE 8 OF 27

10 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 that meeting. (b) Distance participation. Any meeting, regular or special, may be held by conference telephone, live web conferencing or similar live communication equipment, so long as each Director participating in the meeting can communicate concurrently with all other Directors, and each member is provided the means of participating in all matters before the Board, including, without limitation, the capacity to propose, or to interpose an objection to, a specific action to be taken by the corporation, and all Directors participating in the meeting can hear one another; all Directors communicating in such a manner shall be deemed to be present in person at such a meeting. (c) Leave of Absence. Any board member on approved leave of absence or medical leave shall not be counted for purposes of quorum while absent. SECTION 9. WAIVER OF NOTICE The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though taken at a meeting duly held after regular call and notice, if (a) a quorum is present, and either (b) before or after the meeting, each of the Directors not present signs a written waiver of notice, a consent to holding the meeting, or an approval of the minutes, or (c) a director attends the meeting without protesting before or at its commencement about the lack of adequate notice. The waiver of notice or consent need not specify the purpose of the meeting. All waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. PAGE 9 OF 27 SECTION 10. VISITORS No person other than a director and the President/CEO may attend any board of directors meeting without the advance written consent of the Chairman or his or her designee, provided, however, that the President/CEO may invite key staff members and the Chair of the SDASM Volunteers organization as nonvoting guests. SECTION 11. NOTICE OF ADJOURNED MEETING A majority of the Directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place. Notice of the time and place of holding an adjourned meeting need not be given, unless the meeting is adjourned for more than 24 hours, in which case personal notice of the time and place shall be given before the time of the adjourned meeting to the Directors who were not present at the time of the adjournment.

11 PAGE 10 OF 27 SECTION 12. ACTION WITHOUT MEETING Any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all members of the Board, individually or collectively, consent in writing, including via , fax, or via post to Directors secure, password-protected internet site, to that action. Such action by written consent shall have the same force and effect as a unanimous vote of the Board of Directors. Action so taken is effective when the last director signs the consent unless a different date is specified in the action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board. SECTION 13. FEES AND COMPENSATION OF DIRECTORS Directors and members of committees may not receive compensation for their services. They may receive reimbursement for directly related expenses if approved by the President/CEO, and if not available, by the Controller. SECTION 14 STANDARD OF CONDUCT OF DIRECTORS A director shall discharge his or her duties, including his or her duties as a member of a committee: (a) in good faith; (b) with the care an ordinarily prudent person in a similar position would exercise under similar circumstances; and (c) in a manner the director reasonably believes to be in the best interests of the corporation. (d) in accordance with Museum policies as adopted by the Board of Directors, such as the Code of Conduct, Code of Ethics and Conflict of Interest Policy. These duties, including the duty of loyalty, shall be adhered to at all times that a director is in office and after the expiration of his or her term. SECTION 15. HONORARY BOARD The Board may establish an Honorary Board of Directors composed of retired members invited by the Museum's Board of Directors who by virtue of their museum experience can be a resource to the Museum Board. Honorary Directors shall not be expected or required to attend

12 Board meetings. The Chairman of the Board shall appoint the Honorary Board Chairman. Past Museum Board members may be selected to join the Honorary Board by a committee composed of the Chairman of the Museum, Chairman of the Honorary Board and the Museum President/CEO. ARTICLE VIII COMMITTEES SECTION 1. COMMITTEES OF DIRECTORS The Chairman of the Board shall nominate Directors to serve on committees and appoint the chair of the committee. Each Director shall serve on at least one committee and shall consent to the nomination to the committee made by the Chairman. The Board of Directors may then, by resolution adopted by a majority of the Directors at a duly noticed or regularly scheduled meeting where a quorum is present, approve or disapprove such nominations. Each committee shall consist of two or more Directors, to serve at the pleasure of the Board (other than the Audit Committee). Non-Directors may also be appointed to a committee. Committees may be categorized as standing or permanent committees (generally relating to the administration of corporate affairs), program committees (generally relating to the carrying out of the mission of the corporation) or ad hoc committees (temporary issue or project oriented committees). Standing committees shall be described in these bylaws. All committees shall have a written charter approved by the board. Committees shall be bound by the same rules for directors with respect to the requirements of meetings, notice, standards of conduct, action without meeting, waivers and quorum. Pursuant to California Nonprofit Corporation Law section 5212, any committee, to the extent provided in the resolution of the Board, or in the bylaws, or in its approved charter, shall have the authority of the Board delegated to it with respect to its specific charter or assigned duty, except that no committee, regardless of Board resolution, may: (a) Take any final action on matters, which, under the California Nonprofit Corporation Law, also requires approval of the Board of Directors, including the dissolution, sale, merger, pledge or transfer of substantially all of the corporate assets.; (b) Elect, appoint or remove directors or fill vacancies on the Board of Directors or in any committee that has the authority of the Board; PAGE 11 OF 27

13 (c) (d) Fix compensation of the Directors for serving on the Board or on any committee; Amend or repeal bylaws or adopt new bylaws; (e) Amend or repeal any resolution of the Board of Directors which by its express terms is not so amendable or repealable; (f) Appoint any other committees of the Board of Directors or the members of these committees; (g) Authorize distributions; (h) Approve any contract or transaction (1) to which the corporation is a party and one or more Directors have a material financial interest; or (2) between the corporation and one or more of its Directors or between the corporation or any person in which one or more of its Directors have a material financial interest except as special approval is provided for in California Nonprofit Law section Matters involving an interested director must be presented to the Board of Directors. The interested director must be excused from any vote on the matter in question. The Museum Conflict of Interest policy shall be adhered to in these matters. SECTION 2. EXECUTIVE COMMITTEE The Executive Committee shall consist of the Chairman, the Vice Chairman, the Secretary, the Treasurer, the Chairman of the Foundation, the President/CEO of the San Diego Air & Space Museum, the President/CEO of the San Diego Air & Space Technology Center (or his/her designee). The Chairman of the Board may also appoint up to two other Directors of the corporation to serve as the Executive Committee of the Board. The Executive Committee, unless limited by a resolution of the Board, shall have and may exercise all the authority of the Board in the management of the business and affairs of the corporation between meetings of the Board and shall at least annually evaluate the President/CEO; provided, however, that the Executive Committee shall not have the authority of the Board in reference to those matters enumerated in Section 1(a)-(h) of this Article. Written minutes of each meeting shall be posted on a Director s secure website or sent to the full Board with the Board minutes and agenda for the following meeting. Quorum for a meeting of the Executive Committee shall be four of its members. All actions of the Executive Committee shall be reported to and ratified by the full Board at the next duly scheduled Board meeting. PAGE 12 OF 27

14 SECTION 3. AUDIT COMMITTEE; AUDITS (a) Audit Committee. The Chairman of the Board shall nominate one or more members of the Board of Directors and other qualified committee members to an audit committee. (b) Required Audit Committee. If the corporation is required by California law to have an audit committee (current California law requires an audit committee where gross revenue is $2 million or more per year), it shall be recommended by the Chairman of the Board and appointed by a majority of the Board of Directors and consist of at least one Director, and may include persons who are not members of the Board of Directors. Staff and officers of the corporation who receive, directly or indirectly, any wages, consulting, advisory, or other compensatory fees from the corporation (other than for service as Director), the President/CEO and the Treasurer/CFO may not serve on the audit committee. Members of the Finance Committee may serve on the Audit Committee, however, they shall constitute less than one-half of the Audit Committee. (c) Duties of the Audit Committee. The audit committee shall perform the duties and adhere to the guidelines set forth in the corporation s audit committee charter as amended from time to time by the Board. Subject to the supervision of the Board of Directors, such committee shall be responsible for: (i) Recommending an independent auditor and retention or termination of the auditor; (ii) Negotiating the auditor s compensation; (iii) Conferring with the auditor to satisfy the committee members that the corporation s financial affairs are in order; (iv) Reviewing and determining whether to accept or reject the audit; (v) Assuring that any non-audit services performed by the audit firm conform with the standards for auditor independence as described in (b) above, and (vi) Approving the performance of non-audit services by the auditing firm. (d) Compensation. Members of the audit committee shall not receive compensation for their service on the audit committee in excess of that provided to Directors for their service on the Board. PAGE 13 OF 27

15 (e) Audited Financial Statements. The corporation shall prepare annual financial statements using generally accepted accounting principles that are audited by an independent certified public accountant in conformity with generally accepted auditing standards. (f) Non-Audit Services. For any non-audit services performed by the firm conducting the audit, the firm and its individual auditors shall adhere to the standards for auditor independence set forth in the latest revision of the Government Auditing Standards, issue by the Comptroller General of the United States (the Yellow Book) and any standards prescribed by the California Attorney General for auditor independence in the performance of non-audit services, including standards different from those set forth in the Yellow Book. (g) Controlled Organization. If the corporation is under the control of another organization, the controlling organization may prepare a consolidated financial statement. PAGE 14 OF 27 SECTION 4. FINANCE / INVESTMENT COMMITTEES (a) Composition of Finance Committee. The Chairman of the Board may nominate for the approval by a majority of the Board a Finance Committee and an Investment Committee, or a Committee that serves both finance and investment. If the corporation has a Finance Committee, it must be separate from the Audit Committee. The Chairman of the Audit Committee may not serve on the Finance Committee. (b) Duties of Finance Committee. The Finance Committee duties shall include oversight of the preparation of the budget, the year-to-date financial reports and the final financial statements for each year. (c) Investments by Finance Committee or Investment Committee. The corporation may also have an Investment Committee, which may be combined with the Finance Committee. The committee shall act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of like character and with like aims to accomplish the purposes of the institution. Individual investments shall be considered as part of an overall investment strategy. Any asset allocation strategy adopted by the Finance Committee shall be presented to the Board of Directors of the Museum for approval. (d) Standards for Investing. The members of the Finance/Investment Committees shall consider the long- and short-term needs of the institution in carrying out its purposes, its present and anticipated financial requirements, expected total return and associated risks on its investments, general economic conditions, the appropriateness of a reasonable proportion of

16 higher risk investment with respect to institutional funds as a whole, income, growth, and longterm net appreciation, as well as the probable safety of funds. In investing, reinvesting, purchasing, acquiring, exchanging, selling and managing the corporation's investments, the Finance/Investment Committee shall avoid speculation, looking instead to the permanent disposition of the funds, considering the probable income, as well as the probable safety of the corporation's capital. No investment violates this section where it conforms to provisions authorizing the investment contained in an instrument or agreement pursuant to which the assets were contributed to the corporation. (e) Retention of Advisors. The committee may retain professional financial advisors, and shall develop an investment policy that shall be reconsidered at least annually, in light of the changing needs of the corporation, economic conditions, and any other factors that may affect the corporation's tolerance of risk and need for income. The committee may recommend the retention of property contributed by a donor (whether or not it produces income), and a donor's request should be a factor in making the determination of whether to sell a particular asset contributed by a donor. PAGE 15 OF 27 SECTION 5. GOVERNANCE COMMITTEE The Chairman of the Board may nominate for the approval by a majority of the Board a Governance Committee, which shall consist of at least two Directors. (i) Nominations of Directors. The Governance shall nominate candidates for the Museum Board of Directors and shall review their credentials, their fit within the recommended board composition and financial and other capabilities. The Governance Committee shall interview each candidate who fits the criteria set by the Board. Recommendations are permitted to be made to the Governance Committee by other Board members, which shall include a resume of the candidate, his or her qualifications to serve on the board, how this candidate fits within the desired composition of the board and whether the candidate is capable of and willing to agree to the financial and other requirements of serving as a board member. This recommendation must be submitted at least 90 days in advance of a regularly scheduled meeting of the Board of Directors. The committee shall interview and recommend all qualified candidates for election to the Board of Directors at least 45 days before the date of any election of Directors. The Governance Committee shall make its report to the Board of Directors at least 30 days before the date of the election. (ii) Nominations of Officers. The Governance Committee shall nominate a slate of officers each year for approval by the full Board. (iii) Policies, Bylaws, Other Duties. The Board of Directors may charge the Governance Committee with the duties of drafting and maintaining policies of the Museum Board as well as

17 its subsidiary corporations, such as conflict of interest, code of conduct and code of ethics, and recommending changes to the bylaws, as well as other governance items, such as drafting committee charters and maintaining museum accreditation. SECTION 6. COMPENSATION COMMITTEE The Chairman of the Board may nominate for the approval of the board a Compensation Committee, or if none, the Executive Committee shall serve in its stead, which shall review and approve the compensation, including the benefits, of the President/CEO to assure that it is just and reasonable. The review shall occur initially upon the hiring of the officer, upon the renewal or extension of the position, or when the compensation is modified (unless the modification is extended to substantially all employees). SECTION 7. MEETINGS AND ACTION OF COMMITTEES; MINUTES Meetings and action of committees shall be governed by, and held and taken in accordance with, the provisions of Article VII of these bylaws, concerning meetings of Directors, with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members, except that the time for regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee. Special meetings of committees may also be called by resolution of the Board of Directors. Notice of special meetings of committees shall also be given, 48 hours in advance, by phone, fax or . Minutes shall be kept of each meeting of any committee, filed with the corporate records, and shall be given to the Secretary of the corporation to be posted on a secure website. Committee Minutes shall be presented at the following regular Board meeting along with other board materials. The Board of Directors may adopt rules for the governance of any committee not inconsistent with the provisions of these bylaws. ARTICLE IX OFFICERS SECTION 1. OFFICERS The officers of the corporation shall be a Chairman, a Vice Chairman, a Secretary, a Treasurer and a President/CEO. Each officer has the authority as delegated in these bylaws or by resolution of the Board or by direction of an officer authorized by the board to prescribe duties and authorities of other officers. PAGE 16 OF 27

18 SECTION 2. NOMINATION / ELECTION OF OFFICERS (a) Board Officers. The officers of the corporation (other than the President/CEO) shall be nominated by the Governance Committee and presented to the full Board. Officers shall be elected by a majority vote of the Board of Directors for a term of one year and may be re-elected to one successive term. Elected officers may be extended to another term with the approval of a 2/3 vote by the Board in a regular or special meeting. A Board member may nominate a person for an office to the Governance Committee or from the floor at the regular Board meeting at which officers are elected. In the absence of a Governance Committee, the officers shall be selected and appointed by majority vote of the Board of Directors. Each officer shall serve at the pleasure of the Board, subject to the rights, if any, of an officer under any contract of employment. (b) President/CEO. The President/ CEO shall serve at the pleasure of the Board of Directors with an employment at will relationship. His or her compensation shall be approved by the Board upon recommendation by the Executive Committee. SECTION 3. SUBORDINATE OFFICERS The Chairman of the Board may appoint any other officers as approved by the Board that the business of the corporation may require, each of whom shall have the title, hold office for the period, have the authority, and perform the duties specified in the bylaws or determined from time to time by the Board of Directors. SECTION 4. REMOVAL OF OFFICERS Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, with or without cause, by the Board of Directors, at any regular or special meeting of the Board, or except in case of an officer chosen by the Board of Directors, by an officer on whom such power of removal may be conferred by the Board of Directors. The appointment of an officer does not of itself create contract rights and removal of an officer does not affect the corporation s contract rights with an officer. PAGE 17 OF 27 SECTION 5. RESIGNATION OF OFFICERS Any officer may resign at any time by giving written notice to the Board. Thirty (30) day notice is requested. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is

19 without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party. SECTION 6. VACANCIES IN OFFICES A vacancy in any office because of death, resignation, removal, disqualification, or any other cause shall be temporarily filled by appointment of the Chairman until the Board is able to officially vote. SECTION 7. RESPONSIBILITIES OF OFFICERS (a) (b) (c) Chairman of the Board. If such an officer be elected, the Chairman of the Board shall preside at meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to the Chairman by the Board of Directors or prescribed by the bylaws. If there is no president, the Chairman of the Board shall, in addition, be the chief executive officer of the corporation and shall have the powers and duties prescribed in paragraph (e), below. Vice Chairman. In the absence of the Chairman, a Vice Chairman elected by the Board shall perform all the duties of the Chairman and, when so acting, shall have all the powers of and be subject to all the restrictions upon the Chairman. The Vice Chairman shall have such other powers and perform such other duties as from time to time may be prescribed for each of them by the Chairman or the Bylaws. Secretary. The secretary shall attend to the following: (i) Book of Minutes. The secretary shall keep or cause to be kept, at the principal business office or such other place as the Board of Directors may direct, a book of minutes of all meetings and actions of Directors and committees of Directors, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice given, the names of those present at such meetings, and the proceedings of such meetings. (ii) Notices, Seal and Other Duties. The secretary shall give, or cause to be given, notice of all meetings of the Board of Directors required by the bylaws to be given. He or she shall keep the seal of the corporation in safe custody. He or she shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by the bylaws. PAGE 18 OF 27

20 (iii) Articles and Bylaws. The secretary shall keep or cause to be kept, at the principal California office, a copy of the articles of incorporation and bylaws, as amended to date. (d) following: Treasurer. The treasurer is the chief financial officer and shall attend to the PAGE 19 OF 27 (i) Books of Account. The treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation. The treasurer shall send or cause to be given to the Directors such financial statements and reports as are required to be given by law, these bylaws, or by the Board. The books of account shall be open to inspection by any Director at all reasonable times. (ii) Deposit and Disbursement of Money and Valuables. The treasurer shall deposit, or cause to be deposited, all money and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the President/CEO or the Board of Directors; shall disburse, or cause to be disbursed, the funds of the corporation as may be ordered by the President/CEO or the Board of Directors; shall render to the President/CEO and the Board of Directors, whenever they request it, an account of all of his or her transactions as treasurer and of the financial condition of the corporation; and shall have other powers and perform such other duties as may be prescribed by the Board of Directors or the bylaws. (iii) Bond. If required by the Board of Directors, the treasurer shall give the corporation a bond in the amount and with the surety or sureties specified by the Board for faithful performance of the duties of that office and for restoration to the corporation of all its books, papers, vouchers, money, and other property of every kind in the treasurer s possession or under the treasurer s control on the treasurer s death, resignation, retirement, or removal from office. (e) President/CEO. The President/CEO shall be responsible for the business obligations and management functions of the museum. (i) He or she shall set operational agenda, create and execute sound financial policies, oversee physical operation of the museum, and hire, fire, and supervise all other museum employees and volunteer workers. (ii) The President/CEO shall prepare an annual budget, financial forecast, business plan and operation plan for Board approval. He or she shall ensure that all periodic and special reports are prepared accurately and on time as required by

21 the Board of Directors and arrange for the completion of an annual external financial audit within one hundred twenty (120) days after the end of the fiscal year. (iii) He or she will manage, motivate, and communicate effectively with the employees and volunteers and conduct or cause to be conducted a formal annual performance review for every employee of the museum. Further, the President and CEO shall ensure that appropriate public relations and marketing programs are in place and effective for the growth of the museum. (iv) He or she will effectively represent the museum to the community, visitors, and Board. Working closely with the Board, the President/CEO will oversee strategic imperatives and requirements and provide guidance and leadership to provide new growth opportunities for the museum. (v) He or she shall act as the Board s agent for the execution of a strategic plan and have the general powers and duties of management usually vested in the office of President/CEO of a corporation, and shall have such other powers and duties as may be prescribed by a Board resolution or the Bylaws. (f) Authorization to execute documents. The board of directors shall authorize by corporate resolution certain officers to execute documents on behalf of the corporation. ARTICLE X INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS For the purpose of this Article, PAGE 20 OF 27 SECTION 1. DEFINITIONS (a) "Agent" means any person who is or was a Director, officer, employee, or other agent of this corporation, or is or was serving at the request of this 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 that was a predecessor corporation of this corporation or of another enterprise at the request of the predecessor corporation;

22 (b) "Proceeding" means any threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative; and (c) "Expenses" includes, without limitation, all attorneys' fees, costs, and any other expenses incurred in the defense of any claims or proceedings against an agent by reason of his position or relationship as agent and all attorneys' fees, costs, and other expenses incurred in establishing a right to indemnification under this Article. SECTION 2. SUCCESSFUL DEFENSE BY AGENT To the extent that an agent of this corporation has been successful on the merits in the defense of any proceeding referred to in this Article, or in the defense of any claim, issue, or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection with the claim. If an agent either settles any such claim or sustains a judgment rendered against him, then the provisions of Sections 3 through 5 shall determine whether the agent is entitled to indemnification. SECTION 3. ACTIONS BROUGHT BY PERSONS OTHER THAN THE CORPORATION Subject to the required findings to be made pursuant to Section 5, below, this corporation shall have power to indemnify any person who was or is a party, or is threatened to be made a party, to any proceeding other than an action brought by, or on behalf of, this corporation, or by an officer, director or person granted relator status by the Attorney General, or by the Attorney General on the ground that the defendant director was or is engaging in self-dealing within the meaning of California Corporations Code Section 5233 of the California Nonprofit Corporation Law, or 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 this corporation, for all expenses, judgments, fines, settlements, and other amount actually and reasonably incurred in connection with the proceeding. SECTION 4. ACTION BROUGHT BY OR ON BEHALF OF THE CORPORATION (a) Claims Settled Out of Court. If any agent settles or otherwise disposes of a threatened or pending action brought by or on behalf of this corporation, with or without court approval, the agent shall receive no indemnification for either amounts paid pursuant to the terms PAGE 21 OF 27

23 of the settlement or other disposition or for any expenses incurred in defending against the proceeding, unless it is settled with the approval of the Attorney General. (b) Claims and Suits Awarded Against Agent. This corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action brought by or on behalf of this corporation by reason of the fact that the person is or was an agent of this corporation, for all expenses actually and reasonably incurred in connection with the defense of that action, provided that both of the following are met: (i) The determination of good faith conduct required by Section 5, below, must be made in the manner provided for in that Section; and (ii) Upon application, the court in which the action was brought must determine that, in view of all of the circumstances of the case, the agent should be entitled to indemnity for the expenses incurred. If the agent is found to be so entitled, the court shall determine the appropriate amount of expenses to be reimbursed. SECTION 5. DETERMINATION OF AGENT'S GOOD FAITH CONDUCT The indemnification granted to an agent in Sections 3 and 4 above is conditioned on the following: (a) Required Standard of Conduct. The agent seeking reimbursement must be found, in the manner provided below, to have acted in good faith, in a manner such person reasonably believed to be in the best interest of this corporation, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use in similar circumstances. The termination of any proceeding by judgment, order, settlement, conviction, or on a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith or in a manner such person reasonably believed to be in the best interest of this corporation or that such person had reasonable cause to believe that the conduct of such person was unlawful. In the case of a criminal proceeding, the person must have had no reasonable cause to believe that the conduct of such person was unlawful. (b) Manner of Determination of Good Faith Conduct. The determination that the agent did act in a manner complying with Paragraph (a) above shall be made by: (i) The Board of Directors by a majority vote of a quorum consisting of Directors who are not parties to the proceeding; or PAGE 22 OF 27