Approved Amendments by Corporate Membership September 18, 2010 AMENDED & RESTATED BY LAWS OF AMERICAN BAPTIST HOMES OF THE WEST

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1 Approved Amendments by Corporate Membership September 18, 2010 AMENDED & RESTATED BY LAWS OF AMERICAN BAPTIST HOMES OF THE WEST ARTICLE I NAME AND PURPOSE The name of this Corporation and the purposes for which this Corporation is formed shall be as provided in its Articles of Incorporation. Section 1. Qualifications ARTICLE II CORPORATE MEMBERSHIP A majority of the Corporate Members shall at all times be members of an American Baptist Church or an American Baptist Church congregation. Each Corporate Member shall be a responsible citizen of the community who affirms the Core Mission Statement of this Corporation which provides as follows: American Baptist Homes of the West, as an expression of Christian mission, seeks to enhance the independence, well-being and security of older people through the provision of housing, health care and supportive services. In addition, each Corporate Member shall possess the following qualifications, among others: a. A sincere interest in providing care for the physical, mental and spiritual needs of the aging. b. A willingness to devote the necessary time for attending corporate meetings and any responsibilities relating thereto. c. A background of education and/or experience that will contribute to the activities and deliberations of this Corporation. Section 2. Duties. The Corporate Members of this Corporation shall consist of those persons who meet the qualifications as provided in Section 1, above, and who are selected to serve or are elected in accordance with these Bylaws. The functions of the Corporate Members shall include: a. to elect the At-Large and Honorary Corporate Members and At-Large Directors of this Corporation; b. to review the Annual Report and other periodic reports of this Corporation and to adopt the Audit; and, c. to exercise any authority granted by the Articles of Incorporation of this Corporation, these Bylaws or the laws of the State of California. 1

2 Section 3. Classification and Number. The Corporate Members shall be of two categories: Regular Corporate Members and Honorary Corporate Members. a. Regular. The Regular Corporate Members of this Corporation shall be comprised as follows: (i) The Chair of each Continuing Care Retirement Community Board of Directors (or Trustees)or Advisory Board either owned by American Baptist Homes of the West or of which American Baptist Homes of the West is the sole Corporate Member. (ii) The Chair of each Affordable Housing Community Board either owned by American Baptist Homes of the West or of which American Baptist Homes of the West is the sole Corporate Member. (iii)three (3) persons, who shall be members of an American Baptist Church located in the geographic area where this Corporation owns or is sole member of a continuing care retirement community or an affordable housing community. The length of each term shall be three (3) years, and the terms shall be staggered so that one expires each year. The persons selected shall serve for the entire term, provided they remain qualified. (iv) Sufficient At-Large Members to assure that a majority of Regular Corporate Members are members of an American Baptist Church or an American Baptist Church congregation. b. Honorary Corporate Members. A Regular Corporate Member or Director who has served for a minimum of three (3) terms or has served for a minimum of two (2) terms and has attained the age of seventy (70) years, or a retired officer of this Corporation, may be elected by the Corporate Members as an Honorary Corporate Member. This position shall be reserved for those Corporate Members, Directors or retired officers with a record of unusual and distinctive service. Honorary Corporate Members shall be entitled to receive notice of all meetings of the Corporate Members, to attend and speak at all such meetings and to receive minutes of all meetings of the Corporate Members. They shall not have the power to vote nor shall they be counted toward a quorum. Section 4. Election and Term of Office. Regular At-Large Members shall be elected at the Annual Meeting of the Corporate Membership to serve for one year. Such Members shall hold office until the completion of the Annual Meeting of the Corporate Membership following their election or until their successors are elected, whichever comes later. Approved Amendments 9/18/10 2

3 Section 5. Voting. Each Regular Corporate Member shall be entitled to one (1) vote on any matter submitted to the Membership. Voting must be exercised in person; proxy voting shall not be allowed. The Chair shall determine the method of voting unless a majority of the Corporate Members decide to vote by secret ballot. Section 6. Resignation. Any At-Large Member may resign at any time by filing a written resignation with the Secretary which shall be signed by the resigning Member and shall state the effective date of such resignation. Section 7. Reserved Powers. Any provisions of these bylaws notwithstanding, the Regular Corporate Members may, by a vote of two-thirds (2/3 s) of all Regular Corporate Members, terminate on thirty (30) days written notice, any management contract between the Corporation and Cornerstone Affiliates, a California nonprofit public benefit corporation ( Cornerstone ). Any such management contract entered into by the Corporation shall contain a provision allowing for such termination without penalty. ARTICLE III BOARD OF DIRECTORS Section 1. General Powers and Authority. h The Board shall conduct or direct the affairs of the corporation and exercise its powers, subject to the limitations of the California Nonprofit Public Benefit Corporation Law, applicable California law, [1]. the Articles of Incorporation and these Bylaws. The Board may delegate the management of the activities of the corporation to others, so long as the affairs of the corporation are managed, and its powers are exercised, under the Board's ultimate jurisdiction. Each Director shall perform all duties of a Director, including duties on any Board Committee, in good faith, in a manner the Director believes to be in the corporation's best interest and with such care, including reasonable inquiry, as an ordinary prudent person in a like position would use under similar circumstances. In performing the duties of a Director, a Director shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, presented or prepared by one or more officers or employees of the corporation whom the Director believes to be reliable and competent in the matters presented; legal counsel, independent accountants or other persons as to matters that the Director believes are within that person's professional or expert competence; or a Board Committee on which the Director does not serve, as to matters within its designated authority, provided the Director believes the Committee merits confidence and the Director acts in good faith, after reasonable inquiry when the need is indicated by the circumstances, and without knowledge that would cause such reliance to be unwarranted. [2] Providing governance for the corporation, the principal role of the Board shall be to set and clarify expectations of management and to assess the performance of management in light of those expectations. Approved Amendments 9/18/10 3

4 Section 2. Classification and Number. a. The Board of Directors shall be comprised of fifteen (15) persons. They are: (i). Seven Directors shall be elected At-Large by the Regular Corporate Members. Three of the At-Large Directors shall be the same members who serve as Corporate Members of this Corporation pursuant to Article II, Section 3.a (iii). (ii). The remaining eight (8) Directors shall be appointed by Cornerstone. Notwithstanding the foregoing, these Directors shall be elected by the Regular Corporate Members (and will thereupon be considered additional At-Large Directors) if the Regular Corporate Members, by a vote of at least two-thirds (2/3 s) of all of the Regular Corporate Members, determine that Cornerstone or this Corporation has persistently and intentionally acted in a manner contrary to the Mission Statement of this Corporation as set forth in Article II, Section 1 or that this Corporation has undertaken or proposed to undertake action for which an extraordinary majority vote is required under Article V, Section 6 without obtaining such vote. Such determination shall be made on the basis of a writing detailing with specificity the nature of the action(s) at issue. No vote with respect to such action(s) shall be taken without providing 30 days written notice of same to the Board of Directors of Cornerstone and providing the Board of Directors of Cornerstone an additional 30 days in which to meet with respect to the action(s) at issue and cure the matter same to the satisfaction of the Regular Corporate Members.[3] b. The Immediate Past Chair of the Board of Directors, at his or her option, serve as an Honorary chair without vote. He/she shall receive all agendas and other materials provided to the Board of Directors Section 3. Election and Term. All appointed members of the Board of Directors serve by reason of their official capacity and their terms shall be concurrent with their terms in such capacity. The terms of office of all of the Directors shall be divided, as nearly as possible, be divided into three (3) classes of equal size, as determined by the Board Development Committee. Each class shall serve a term of three (3) years, with approximately one-third of the At-Large Directors to be elected at each Annual Meeting of the Corporate Members. All Directors shall hold office until the completion of their terms, or until their successors take office, whichever occurs later, unless they resign or are removed from office pursuant to Section 6 of this Article III, below. Section 4. Resignation. Any At-Large Director of this Corporation may resign effective upon giving written notice to the Chair of the Board of Directors of this Corporation, unless the notice specifies a later time for the effectiveness of such resignation. Section 5. Vacancies. Any At-Large vacancy occurring on the Board of Directors between Annual Meetings may be filled by the Board of Directors. Section 6. Removal of Directors. Any At-Large Director of this Corporation may be removed from office at any time, with or without cause, by the affirmative vote of three-fifths of the Corporate Members present at any meeting of the Corporate Members at which notice of the consideration of such action has been given in the Approved Amendments 9/18/10 4

5 notice of said meeting. ARTICLE IV MEETINGS OF CORPORATE MEMBERS Section 1. Regular Meetings of Corporate Members. An Annual Meeting of the Corporate Members of this Corporation shall be held each year, at a time and place established by the Chair of the Board of Directors for the purpose of electing At-Large and Honorary Corporate Members and At-Large Directors, for reviewing the Annual Report and adopting the Audit and for the transaction of such other business in accordance with the duties and functions of Corporate Members as set forth in Articles II and III of these Bylaws and the California Corporations Code. The Corporate Members of this Corporation may hold additional meetings at times and places established by the Membership. Section 2. Special Meetings. Special meetings of the Corporate Members of this Corporation may be called by the Chair of the Board and must be called by the Chair upon written request by six (6) Corporate Members. Any special meeting so called shall be held at the time and place designated by the Chair or the President and specified in the notice of such meeting. The notice of each special meeting must state the purpose of the meeting and no business shall be transacted at a special meeting other than that set forth in the notice. Section 3. Place of Meeting. Any meeting of the Corporate Members may be held either within or without the State of California at the place specified in the notice. Section 4. Notice of Meetings. Notice of the time and place of each regular or special meeting shall be deemed given to each Member provided that such notice is given at least ten (10) days but not more than thirty (30) days prior to the date of such meeting. Notice shall be given in writing and mailed by first-class mail or by to Members at the addresses appearing on the records of the Corporation. Section 5. Quorum. At meetings of the Corporate Members a majority of the Corporate Members shall constitute a quorum for the transaction of business. If less than a quorum is present at any meeting, the only business that may be legally transacted is to establish a time for the next meeting of the Corporate Members and to adjourn. The act of the majority of those present and voting at any meeting at which a quorum is present shall be considered the act of that body, unless the act of a greater number is required by law or by these Bylaws. Section 6. Action by Consent. Any action required or permitted to be taken by Corporate Membership under the provisions of the California Corporations Code, the Articles of Incorporation, or these Bylaws, may be taken without a meeting, if all Corporate Members shall individually or collectively consent in writing to such action. Approved Amendments 9/18/10 5

6 Such written consent or consents shall be filed with the minutes of the proceedings of the Corporate Membership. Such an action by written consent shall have the same force and effect as a unanimous vote of such Corporate Members. Any certificate or other document filed on behalf of the Corporation relating to an action taken by the Corporate Members without a meeting shall state that the action was taken by written consent of the Membership without a meeting, and that the Bylaws of this Corporation authorize its Corporate Members so to act. Section 7. Telephonic Participation. Corporate Members may participate in a meeting through use of a conference telephone or similar communications equipment, so long as all Corporate Members participating in such meeting can hear one another. Participation in a meeting pursuant to this paragraph constitutes presence in person at such meeting. ARTICLE V MEETINGS OF DIRECTORS Section 1. Meetings of the Board of Directors. The Board of Directors of this Corporation shall meet at least three times each year at a time and place established by the Board. One such meeting shall be the Annual Meeting of the Board of Directors which Annual Meeting shall be held so as to coincide with the Annual Meeting of the Corporate Members of this Corporation. Special meetings of the Board of Directors may be called by the Chair or by the President and must be called by the Chair of the Board upon the written request by three (3) directors. Any special meeting so called shall be held at the time and place designated by the Chair or the President and specified in the notice of such meeting. The notice of each special meeting must state the purpose of the meeting and no business shall be transacted at a special meeting other than that set forth in the notice Section 2. Notice of Meetings. Notice of the time and place of each regular or special meeting shall be deemed given to each Director provided that such notice is given at least ten (10) days but not more than thirty (30) days prior to the date of such meeting. Notice shall be given in writing and mailed by first-class mail or by to Directors at the addresses appearing on the records of this Corporation. Section 3. Quorum. At meetings of the Board of Directors, a majority of the Directors then in office shall constitute a quorum for the transaction of business. If less than a quorum is present at any meeting, the only business that may be legally transacted is to establish a time for the next meeting of the Board of Directors and to adjourn. The act of the majority of those present and voting at any meeting at which a quorum is present shall be considered the act of the Board of Directors, unless the act of a greater number is required by law or by these Bylaws. Section 4. Action by Consent. Any action required or permitted to be taken by the Board of Directors under the provisions of the Approved Amendments 9/18/10 6

7 California Corporations Code, the Articles of Incorporation, or these Bylaws, may be taken without a meeting, if all Directors shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board of Directors. Such an action by written consent shall have the same force and effect as a unanimous vote of such Directors. Any certificate or other document filed on behalf of the Corporation relating to an action taken by the Directors without a meeting shall state that the action was taken by written consent of said body without a meeting, and that the Bylaws of this Corporation authorize its Directors so to act. Section 5. Telephonic Participation. Directors may participate in a meeting through use of a conference telephone or similar communications equipment, so long as all Directors participating in such meeting can hear one another. Participation in a meeting pursuant to this paragraph constitutes presence in person at such meeting. Section 6. Extraordinary Majority Votes. Any provisions of these Bylaws notwithstanding, none of the following actions shall be taken or approved by the Board of Directors unless the vote of two thirds (2/3) of all of the Directors shall have been obtained: a. Amendments to these Bylaws b. Amendments to the Articles of Incorporation of the Corporation c. Dissolution of the Corporation d. A decision to seek bankruptcy protection or a receivership e. Any acquisition or disposition of assets by the Corporation which exceeds 10% of the book value of the Corporation s assets as shown on its most recent audited financial statement. Section 7. Electronic Voting Electronic voting (voting by ) by the Board shall be carried out as follows: (a) The Chair shall determine which matters shall be eligible for electronic voting and shall so indicate with respect to any matter coming before the Board. The making of, seconding of, and voting on matters determined by the Chair to be eligible for electronic voting shall take place on an electronic mailing list to which all Directors subscribe. (b) The administration of the electronic voting process shall be administered by the Secretary or, at the option of the Chair, a Secretary Pro Tem as vote administrator. (c) When a motion has been made and seconded, the Chair shall establish a deadline date and hour for a vote and shall instruct the Secretary to send a ballot form by to all Directors. This form must state the motion, name the proposer and seconder thereof, and shall state the date and hour by which the ballot must be returned to the Secretary. The ballot will have provision for entering votes for the motion, against the motion, and for recording abstention. (d) The returned ballots must be time stamped no later than the deadline date and hour in the time zone of the voter. Voting must be on the ballot form provided by the Secretary. The only exception will be in the event that has failed, in which case a vote may be made by fax or by telephone. A Director who has already voted may change his or Approved Amendments 9/18/10 7

8 her vote, provided that it is done before the deadline. (e) A motion is carried if the total number of returned ballots is at least a quorum of the Board and if there are no negative votes. Any negative vote will require the motion to be postponed until the next regular or special meeting at which discussion is held. (f) The Secretary will publish to the Board the outcome and the vote of each Director who returned a ballot. Section 8. Waiver of Notice. Whenever any notice is required to be given under the provisions of applicable law or under these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE VI CORPORATION OFFICERS Section 1. Elected Officers. Elected officers of the Corporation shall be a Chair of the Board, a Vice Chair of the Board and a Secretary. The Board may elect such Assistant Secretaries, and establish the duties and responsibilities therefor, as it sees fit. Each such officer shall be a Director and shall have such power and duties as are set forth in these Bylaws. Notwithstanding the foregoing, an Assistant Secretary need not necessarily be a Director. Any two (2) offices may be held concurrently by the same person except the offices of Secretary and Chair of the Board. Section 2. Appointed Officers. The appointed officers of the Corporation, who are employed members of the corporation's staff, shall be a President, a Chief Financial Officer and one or more vice presidents. Section 3. Election and Term of Office. The elected officers of the Corporation shall serve for a term of one year, shall hold office until their successors shall be duly elected and shall be elected at the Annual Meeting of the Board of Directors of this Corporation. The appointed officers of the Corporation, except the President, shall be selected by the President. Their terms shall be set by the President. The President shall be appointed by and shall serve at the will of the Board of Directors. Section 4. Removal. a. Any elected officer and the President may be removed by the Board of Directors whenever, in its judgment, the best interests of this Corporation would be served by such action. b. Any appointed officer may be removed by the President whenever, in his/her judgment, the best interests of this Corporation would be served by such action. Approved Amendments 9/18/10 8

9 Section 5. Duties of Elected Officers. a. Chair of the Board. The Chair of the Board shall preside at all meetings of the Board of Directors, and the Chair, or his/her designee, shall preside at all meetings of the Corporate Membership. Except as otherwise specified in these Bylaws, the Chair shall appoint the committees of the Board, appoint a chair of each such committee and shall be an ex-officio member of all committees. In the event of absence, inability to act or vacancy in the office of President of the Corporation, the Chair shall have and exercise the power of the President of this Corporation until a President or acting President is appointed. b. Vice Chair of the Board. The Vice Chair of the Board shall fulfill the duties and responsibilities of the Chair when that person is unable or unwilling to carry out his/her duties and may also be assigned additional duties by the Chair or the Board. c. Secretary. The Secretary shall keep or cause to be kept a book of minutes at the principal office or at such other place as the Board may order of all meetings of the Corporate Members, the Board of Directors and the Standing Committees with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at these meetings, and the proceedings thereof. The Secretary shall also keep or cause to be kept a register showing the names and addresses of all Corporate Members and Directors. The Secretary shall give or cause to be given notice of all the meetings of the bodies required by these Bylaws or by law to be given, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors from time to time. Section 6. Vacancies. A vacancy in any elected office may be filled by the Board of Directors for the unexpired portion of the term. Section 7. President. The President shall be the Chief Executive Officer and administrative head of this Corporation and shall have responsibility for the implementation of the policies of the Board of Directors. The President shall have general oversight of the interests of this Corporation. The duties of the President shall be as follows: a. As Chief Executive Officer of this Corporation and as authorized by resolution of the Board of Directors in either general or specific instances, the President shall have power to execute all instruments, agreements, contracts, commercial paper and evidences of indebtedness in the name of the Corporation and to delegate such authority whenever applicable to other employees to carry out their assigned responsibilities. b. The President shall authorize the employment of and determine the tenure of all appointive officers and employed staff of this Corporation and shall supervise their duties. c. The President shall formulate the Annual Report of this Corporation and shall submit said report to the Annual Meeting of the Membership. A copy of the Annual Report shall be sent to each Corporate Member and to each Director of this Corporation at least fifteen (15) days prior to the Annual Meeting of the Corporate Members. Approved Amendments 9/18/10 9

10 d. The President shall prepare a proposed budget for the ensuing fiscal year, that is responsive to the Corporate financial goals established by the Board of Directors, and present it to the Board of Directors of this Corporation for review at least ten (10) working days prior to the meeting of the Board of Directors at which the budget is scheduled to be adopted. e. The President shall perform such other duties as may be assigned by the Board of Directors or that may be necessary in the best interest of this Corporation. Section 8. Vice Presidents. The Vice Presidents shall have such duties as may be assigned, from time to time, by the President. Section 9. Chief Financial Officer. The Chief Financial Officer shall serve as fiscal policy advisor to the President. The Chief Financial Officer shall have authority to perform such other duties as from time to time may be assigned by the President. The Chief Financial Officer shall transmit to the Corporate Members and Directors of this Corporation the Annual Audit pursuant to Article X, Section 5 of these Bylaws; and shall present an annual report of the financial condition of this Corporation at the Annual Meeting of the Members of this Corporation. The Chief Financial Officer shall monitor the following corporate functions: a. The receipt and custody of all monies, securities and other valuable effects of the Corporation. b. The maintenance of complete and accurate accounts of the receipts and expenditures and assets and liabilities of the Corporation. c. The security and safe deposit of all monies, securities and other valuable effects in the name and to the credit of this Corporation in such depository as may be designated by the Board of Directors. d. The disbursement of all corporate funds as authorized by budget or other actions of the Board. e. Arranging for short-term borrowing, and long-term financing and refinancing of the debts of this Corporation as authorized by the Board of Directors. f. The development of budgetary procedures for this Corporation and monitoring compliance therewith. ARTICLE VII COMMITTEES Section 1. Committees Generally. a. Committees of the Board shall be standing or ad hoc. Each committee shall exercise such power and carry out such functions as are designated by these Bylaws or as delegated by the Board of Directors from time to time. Except as otherwise described, such committees shall be advisory only and subject to the control of the Board of Directors. Each committee shall adopt its own rules which shall not be inconsistent with these Bylaws, the Articles of Incorporation or the policies of this Corporation. Each committee shall meet as necessary to carry out its duties. Committee meetings may be called by the Chair of the Committee or the Chair of the Board of this Corporation. Approved Amendments 9/18/10 10

11 b. Committee members may participate in a meeting through use of a conference telephone or similar communications equipment, so long as such telephonic participation is approved, in advance, by the chair of each such committee and so long as all committee members participating in such meeting can hear one another. Participation in a meeting pursuant to this paragraph constitutes presence in person at such meeting. c. Any action required or permitted to be taken by any such committee may be taken without a meeting, if all committee members shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of such committee. Such an action by written consent shall have the same force and effect as a unanimous vote of such committee members. Any certificate or other document filed on behalf of this Corporation relating to an action taken by committee members without a meeting shall state that the action was taken by written consent of said body without a meeting, and that the Bylaws of this Corporation authorize its committees so to act. d. Whenever any notice is required to be given under the provisions of applicable law or under these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Section 2. Standing Committees. Standing committees shall consist of the Board Development Committee, the Audit Committee, and the Compensation Committee. Section 3. Ad hoc Committees. Ad hoc committees of the Board may be appointed by the Chair for such special tasks as circumstances warrant. An ad hoc committee shall limit its activities to the accomplishment of the task for which it is appointed and shall have no power to act except as is specifically conferred by action of the Board of Directors. Upon completion of the task for which it was appointed, such ad hoc committee shall stand discharged. Section 4. Membership, Appointment. The Chair and members of each committee, except as otherwise provided herein, shall be appointed annually by the Chair of the Board. Except for the Board Development Committee only, the Chair of a committee must be a Director, but more than one Director may serve on any committee. Section 5. Quorum At all committee meetings a majority of the committee members shall constitute a quorum for the transaction of business. If less than a quorum is present at any meeting, the only business that may be legally transacted is to establish a time for the next meeting of the committee and to adjourn. The act of the majority of those present and voting at any meeting at which a quorum is present shall be considered the act of that committee, unless the act of a greater number is required by law or by these Bylaws. Section 6. Vacancies. Approved Amendments 9/18/10 11

12 Vacancies in any committee shall be filled for the unexpired portion of the term in the same manner as provided in the case of original appointment. Section 7. Reports. Reports of all meetings of committees shall be made to the Board at or prior to the next Board of Directors meeting. Section 8. Waiver of Notice. Whenever any notice is required to be given under the provisions of applicable law or under these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Section 9. Board Development Committee. a. a The Board Development Committee shall be a combined committee of American Baptist Homes Foundation of the West ( ABHFOW ) and this Corporation. It shall consist of two (2) members of the Board of Directors from each Corporation and one resident from an ABHOW continuing care retirement community. b. The Board Development Committee shall be chaired by a person who is not a Director of ABHOW and shall be appointed at least three (3) months prior to the Annual Meeting of this Corporation by the Chairs of ABHFOW and this Corporation. The Chair of the Board and President of these Corporations shall be ex-officio members of this committee. However, they shall have no power to vote nor shall they be counted toward a quorum. The duties and responsibilities of the Board Development Committee shall be as follows: with respect to this Corporation, to nominate candidates for the Board and Officers of the Board. c. The duties and responsibilities of the Board Development Committee shall be as follows: (i) to develop criteria and establish procedures for nominating At-Large and Honorary Corporate Members, At-Large Directors and elected Board officers; (ii) to meet the requirement of Article II, Section 3.a.(iii) and (iv) of these Bylaws that a majority of the Regular Corporate Members shall be members of an American Baptist Church or an American Baptist Church Congregation located in areas in which the Corporation owns or is sole member of a community at the time of their election. (iii) to recruit and nominate persons to fill the elected positions; and (iv) to annually evaluate the performance of Directors. b. The Board Development Committee shall cause the names of its nominees and a brief resume of their background to be mailed to all Corporate Members not less than fifteen (15) days prior to the date of the Annual Meeting of the Corporate Members at which time the election of new At-Large Members and Directors shall be held. Section 10. Audit Committee. Approved Amendments 9/18/10 12

13 The Audit Committee shall consist of four (4) members of the Board of Directors as appointed annually by the Chair, and not more than two members who are not Directors. No member of the Committee shall be an employee of the Corporation. The duties and responsibilities of the Audit Committee shall be as follows: a. to recommend to the Board the selection of an independent auditor for this Corporation. b. to meet with the internal auditor of this Corporation as necessary. c. to review the nature and scope of the audit work to be performed each year prior to entering into a formal contract for auditing services; d. to review the client representation letter, the audited financial statements, the management letter and such other matters that the independent auditor wishes to raise; e. to meet with the independent auditor after completion of the audit; f. to furnish a report of its audit review to the Board of Directors; and g. to monitor the accounting policies and the financial reporting systems of this Corporation. Section 11. Compensation Committee. The Compensation Committee shall consist of four (4) members of the Board of Directors and not more than two (2) additional members who are not Directors. The duties and responsibilities of the Compensation Committee shall be as follows: a. to annually: (1) evaluate and make recommendations to the Board of Directors on the salary and benefits paid to the President and Chief Financial Officer, and (2) to approve the incentive compensation pool for, and to review and evaluate the salary and benefits for senior corporate officers of this Corporation and of any wholly-owned subsidiary of this Corporation, that are set by the President, and to present these to the Board for information; b. to advise the President on compensation levels for staff, inflation factors, pay range increments and associated matters; c. to review and advise the President on necessary changes in employee benefit levels; and d. to perform such other duties as may be assigned by the Board of Directors. ARTICLE VIII CONTRACTS, CHECKS, DEPOSITS AND FUNDS Section 1. Execution of Contracts and other Instruments. Approved Amendments 9/18/10 13

14 In addition to the authority of the President as set forth in these Bylaws, the Board of Directors may authorize any officer or officers, agent or agents of this Corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of this Corporation, and such authority may be general or may be confined to specific instances. Section 2. Authorized Signatures. All checks, drafts or orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of this Corporation, and in such manner as shall from time to time be determined by general resolution of Board of Directors. In the absence of such determination by the Board, such instruments shall be signed by the Chief Financial Officer or by his/her assistant and countersigned by the President of this Corporation. Section 3. Deposit of Funds. All funds of this Corporation shall be deposited from time to time to the credit of this Corporation in such banks, trust companies or other depositories as the Board of Directors may select or may delegate to the selection of the Chief Financial Officer. ARTICLE IX BOOKS AND RECORDS This Corporation shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of its Corporate Members, the Board of Directors and the standing committees of the Board, and shall keep at the principal office a record giving the names and addresses of the Corporate Members, Directors and Officers. All books and records of the Corporation may be inspected by any Director or Corporate Member or his/her agent or attorney for any proper purpose at any reasonable time during normal business hours. In addition, access to records and books will be provided in accordance with applicable California laws. ARTICLE X GENERAL PROVISIONS Section 1. Offices. The principal office of the Corporation shall be located in the City of Pleasanton, County of Alameda, State of California. The Corporation may establish a different location in California for its principal office and may establish other offices, either within or without the State, as the Board of Directors may determine from time to time. Section 2. Fiscal Year. The fiscal year of this Corporation shall end on the last day of September of each year. Section 3. Indemnification. a. This Corporation shall defend, indemnify and hold financially harmless any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the Approved Amendments 9/18/10 14

15 right of this corporation) by reason of or arising from the fact that the person is or was a director, officer, employee or agent of this corporation or is or was serving at the request of this Corporation as a director, officer, employee, agent, partner or trustee of another corporation, partnership, joint venture, trust or other enterprise, against costs and expenses (including attorney's fees) of said suit, action of the proceeding, judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with the action, suit or proceeding to the fullest extent of the law if (i) the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of this Corporation and, with respect to a criminal action proceeding, did not know and had no reasonable cause to believe the conduct was unlawful, or (ii) the person's act or omission giving rise to such action, suit or proceeding is ratified, adopted or confirmed by this Corporation or the benefit thereof received by this Corporation. The termination of any action, suit or proceeding by judgment, order settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption, and settlement shall not constitute any evidence, that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of this Corporation and, with respect to a criminal action or proceeding, did not know and had no reasonable cause to believe that the conduct was unlawful. b. No indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for (a) a breach of such person s duty of loyalty to this Corporation; (b) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; or (c) a transaction from which such person derives an improper personal benefit, unless, and only to the extent that, the court in which the action or suit was brought, shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for the expenses which the court considers proper. c. Any person who desires to receive defense and indemnification under this section shall notify this Corporation reasonably promptly that such person has been named a defendant to any action, suit or proceeding of a type referred to above and that such person intends to rely upon the right to indemnification described in this section. The notice shall be in writing and mailed via registered or certified mail, return receipt requested, to the President of this Corporation at the executive offices of this Corporation or, in the event the notice is from the President, to the Chair of this Corporation. Notice need not be given when this Corporation is otherwise notified by being named a party to the action. d. At the discretion of the Board of Directors, this Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of this Corporation, or is or was serving at the request of the Board of Directors, or is or was serving at the request of the Board of Directors as a director, officer, employee, agent, partner or trustee of another corporation against any liability asserted against or incurred by the person in any such capacity, or arising out of the person's status as such, whether or not this Corporation would have the power to defend and indemnify such person against such liability under the provisions of this section. e. The indemnification provisions of this section shall be extended to a person who has ceased to be a director, officer, employee or agent as described above and shall inure to the benefit of the heirs, personal representatives, executors, and administrators of such person. The defense and indemnification referred to in the various provisions of this section shall be Approved Amendments 9/18/10 15

16 deemed to be in addition to and not in lieu of any other rights to which those defended and indemnified may be entitled under any statute, rule of law or equity, agreement, vote of the Corporate Members or Board of Directors or otherwise. Section 4. Annual Audit. Each year, there shall be an audit of this Corporation's financial records by an independent certified public accountant selected by the Board of Directors pursuant to Article VII, Section 11 of these Bylaws. The Chief Financial Officer of this Corporation shall send a copy of the Annual Audit to each Corporate Member and each Director of this Corporation at least ten (10) days prior to the meetings at which the Annual Audit is to be discussed. Section 5. Bonding. The principal officers of this Corporation shall be covered by a fidelity bond commensurate with the level of their financial responsibility. Section 6. Review of Bylaws. The Board of Directors shall review the Bylaws of this Corporation at least every five (5) years. Section 7. Robert s Rules of Order. The rules contained in the current edition of Robert s Rules of Order, Newly Revised, shall govern the Members, as well as the Board and all of its committees, in all cases in which they are applicable, and in which they are not inconsistent with the Articles of Incorporation of this Corporation or these Bylaws. ARTICLE XI AMENDMENTS These Bylaws may be amended or repealed, or new Bylaws may be adopted, by a two-thirds majority vote of the Corporate Members present at any regular meeting or at any special meeting, upon the recommendation of the Board of Directors provided that at least thirty (30) days written notice is given to amend or repeal, or to adopt new Bylaws at such meeting. Approved Amendments 9/18/10 16