SR-106-025 (4)
CED:JM:ds ...
Cl ty Councll !~eeWng: November 15, 1983
.S.-A (~ell"u'c0
Santa Monlca, Call~ornla
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.~ 15 ~
TO: Hayor and Clty Council
FROM: City Staff
SUBJSCT: Recow~endation to Apnrove Artlcles of Incorporatlon and
Bylaws of the Pler Festoratlon Cor}oration (PRC)
Introductlon
ThlS report ~resents a su~~ary of the Articles of Incorooratlon
and Byla\lS of the Pier Restoration Corporation and reco~ends that
Councll approve these docu~ents. The reDort further recoMnends that
Councll dlrect the Clty Manager to develop the aareement(s) v7hlCh
will deflne the rights and res?onslbllities of the P~er Restoratlon
Corporatlon aDd return to Council for aurroval.
In addltion, it
reconnends that Councll aDDoint the Cltv Manaaer as sole incoroorator
tc fulflll the leqal re~Ulrewents of lncorporatlon.
Background
The ~:ay 10 Pler Staff Report, among other thinas, set forth
the concept of creating a quasl-publlC organization to onerate and
manaqe the restoratlon of the Santa Monlca Pler. k~ong the benef~ts
of for~lng a non?rofit publlC beneflt corDoration are admlnlstratlve
autonomy, a legal status that allows for certaln actlons, partlcularlv
~und ralslng, WhlCh lS not as easlly avallable to a municlpal government,
the lmproved ablllty to leverage and Dackage both prlvate and Dublic
resources, and a ~ubllc-private partnershl~ which will ensure equal
attentlon to sound bUSlness practlce and publlC lnterest obJectives.
The CounCll ap~roved the concept o~ the Pler Pestoration Corooration
and dlrected sta~f to nrepare the ap~roDriate documents to create the
corporatlon includlna Byl~ws, Artlcles of Incor?Oratlon, and other
agreements.
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CED:JM:ds
City councll Meetlng: November 15, 1983
Santa Monlca, Ca1lfornln
Because of a potential conflict of interest wlth the City
Attorney's Offlce the City engaged the law flrm of Stern and Mlller
to asslst ln the formatlon of a Callfornla Non-Proflt PubllC Beneflt
Corporation and the procurement of rullngs from the Internal Revenue
Servlce and the Callfornia Franchlse Tax Board as to the tax exempt
and charltable status of the PFC for tax purposes.
On September 13, 1983 Councl1 anpointed twelve indlviduals to
serve as members of the Board of Directors o~ the Pler Restoration
Corporation. The proposed Artlcles and Bylaws, included ln this
report as Attachments A and B respectlvely, have been revlewed and
dlscussed by the Board appolntees. A document WhlCh wll1 be presented
to COUDCll at a later date, WhlCh more sDecifically deflnes the role
and responslblllty of the PRC, wlll be the SerVlce Contract, Slnce
the inltla1 tasks of determlning stafflng requlrements and
developlnQ a management plan will take SlX to eight months to
complete, staff will recommend later ln thls report that Councll
dlrect the Clty Manager to develop an Jnterim Agreement which will
lnltlally capltallze the PRe, as cOMtemplated lD the budqet, and
s~eelfy the serVlces to be Derformed for the remalnder of thlS
flseal year. After hlrlnq staff and setting up a management ~lan,
the PRC wlll be ln a posltlon to negot1ate and execute a more complex
and deflnltlve SerVlce Contract.
It 1S lmoortant to DOlnt out that the proposed Artlcles and
Bvlaws are consistent wlth the Clty'S position, as stated at the
outset, that the Clty Councll would retain anproval rlghts over the
slgni~leant actlvltles of the Corporation. By establishlng the Clty
as the sole member of the PRe, The Bylaws ensure that ultlmate control
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CED:J~:ds
City Councl1 ~eet~ng:
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Nove~ber 15, 1983
Santa ~onica, Call=ornia
remains with the Cltv CaunCll.
Artlcles of Incorporatlon
Corporate eXlstence begllls with the flllll0 of the Artlcles of
Incorporatlon. The Artlcles create the corporate Ulllon between the
~embe~s.
The PRC 1S orqanlzed under the nonprofit PuhllC Beneflt
Cornoratlon Law and the Artlcles state the recruired prov1sions WhlCh
lnclude the corporate nawe, a statement that the cornoratlon is not
organlzed for orlvate aaln of any nerson and lS organlzed for
charltable or ?ubllC pur~oses, and the name and address of the
prlnCl~al agent.
In addltion the Art1cles Drovlde that in the
event 0= dlSSolutlon, any assets of the Corporation ~111l be distrlbutec
to the Cltv of Santa ~.on1ca. The Artlcles also lncluoe lanauaae
wlth regard to the activities and organlzatlon o~ the Corporatlon
Wh1Ch wlll enable the Cornoratlon to aualifv ~or federal and state
tax exe~Dtlon.
Bvlaws
Bylaws are the rules ado~ted by a eornoratlon for ltS lnternal
government and for resulatlon of ltS affairs.
Rather than deserlbe
the contents of the Bylaws In detail, thlS seetlon wlll hlghllght
the ~aJor elements.
I. Members: The Clty of Santa poniea shall be the sole ~e~ber
of the corporatlon and shall aet throuoh its Cltv Counel1. The
funetlons of the ~~ember lnclude electing the Boare of Directors,
aporovln~ a~endnents to the Bylaws, approving cornoratlonls budget,
and other dutles as way be established.
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CED:JM:ds
Clty Counell Heetlng: November 15, 1983
Santa Monica, Ca11fornia
II. Dlrectors:
A. Powers: The activltles and affalrs of the corporatlon shall
be conducted by or under the dlrectlon of the Board of Dlrectors.
S~eclfic powers lnc1ude:
1) Selectlon and re~oval of Executlve Director and
employees; selectlon of 8xecutlve Dlrector lS subJect to approval
of City Manager.
2) Borrowlng money or lncurrlng debt subJect to Drior
approval of the ~ember.
3) Carrying on buslness at a profit subJect to restrlctions
contalned In the Artlcles.
B. Election and Term of Offlce: Twelve Directors shall be
elected by the Hember and shall serve for a term of three years except
that the lnltlal directors shall serve for ryeriods as follo~s:
Group A: One group of four dlrectors shall serve for a
term of two years (untll the Second Annual Meetlng)
and the successors to this lnitlal Group A shall
likewlse serve for term of two years. Thereafter
all successors shall serve three year terms.
Group B: Second group of four directors shall serve an
lnltial term of three years. Successors shall
serve a two year terw. Thereafter Group B
dlrectors shall serve three year terms.
Group C: Thlrd group of four directors shall serve inltlal
term of three years and successors to the initlal
group shall serve for three year terms.
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CED:J~:ds
C~ty Council ~eeting: November 15, 1983
Santa Mon~ca, Calitornia
The purpose of this scheme is to provide continuity and to allow
the lnltlal members sufflclent tlffie to ~mplement a proaram of
ooeration.
III. ~eet~nqs: Regular ~eetings of the board shall be held
at a time flxed by the Board and notlce wlll be oublished in the
newspaper and sent to Clty Clerk and Clty Manaqer. Speclal Meetlngs
may be called by the Chair of the Board, the Executive Dlrector, and
Vlce Chalr, the Secretary, or any three dlrectors and shall be
held upon four days notlce by mail or 48 hours notice given personally.
Notice shall also be glven to two dally newsoapers and the Clty Clerk
and Clty Manager. Seven directors constltute a auorum for the
transactlon of bUSlness excent to adJourn WhlCh ~ay be wade bv
a naJority of the directors present.
The Bylaws are consistent with the Brown Act. All meetings
shall be open and publlC, however the Board may hold closed sessions,
to the extent permltted by appllcable law for the followlng ?urposes:
a. dlScusslon of pending or antlc~pated litlgation,
b. conslderatlon of appolntment, employment, or dismlssal of
an employee,
c. for any other purpose speclflcally authorlzed by the
Ralph M. Brown Act.
The Board appolntees had slgnlflcant bUSlness concerns with
respect to confidentlallty of proprletarv and flnanclal inforrnationr
partlcularly wlth regard to lease negotiations and recommended that
Sectlon 13 PubllC Meetings lnclude the following language as well.
"Addltlonally, In order to protect the bona flde rlghts of
prlvacy of both prospectlve and current tenants, lncluding thelr
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CED:J!'1:ds
Clty Council ~eetlng: Nove~ber 15, 1983
Santa Monlca, Call~ornla
rlght to confldentlallty of proprletary and flnancial lnfor~at1on,
to the extent perm1tted by appllcable law, the Board may hold a
closed session to conduct negotiatlons with respect to specific
contracts or agreements that may be entered lnto bv the corporatlon
pursuant to POllCY prevlously established by the Board In aDen
seSSlon. Provlded, hm.lever, that the flnal vote of the Board on
any actlon to be taken by the corporatlon with resnect to the
appolntment, employment or dismlssal of an employee, or the lettlng
of any contract or the enterinq lnto of any aqreewent shall be taken
at a meeting of the Board while such meetlng is open to the public."
However, Slnee the proposed Bylaws are substantlally In
cOffiDllance wlth the Brown Act, it 15 staff's Judgement and recom-
mendatlon that they be consistent with the law and therefore thev do
not lnclude the above language. This 1S also a Drotective weasure
against potent1al 11tigation.
Members of the publ1C shall be entltled to 9art1cipate 1n
meet1nas subject to rules adopted by the Board.
IV. Offlcers: The offlcers shall be a Cha1r of the Board,
a Secretary, and Ch1ef Financial Offlcer. The Board, at its dlscretlon,
mav have one or more Vlce-Chalrs, Asslstant Secretarles, Assistant
Treasurers, and an Executive Dlrector. Nelther the Secretary, any
Ass1stant Secretary, Chief FinanClal Officer, nor any Ass1stant
Treasurer may serve concurrently as Exectulve Director or Chalr.
The Executlve D1rector shall not be a dlrector of the Corporation
and it shall be the Board1s determination as to whether the Executlve
Dlrector shall be an officer of the Corporatlon. At the Board's
dlscretion, the Executlve Dlrector shall have the general powers
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CED:JM:ds
Clty Councll Meeting: November 15,1983
Santa Monlca, Californla
and dutles of the oresldent of the corporatlon.
v. Flnanclal Transactlon: Corporatlon is prohlblted fro~
enterlng lnto transactions ln WhlCh one or more of the dlrectors
has a materlal financlal lnterest, However, there are certaln
condltlons under whlch the corporatlon may engage ln self-deallng
transactlons:
if Callfornia Attorney General approves transactions,
If transactlon lS approved by ma]Orlty of dlrectors without
countlng vote of interested dlrector(s)
~f Board determlned that Corporation could not have
obtalned a more advantageous arrangement.
Corporatlon shall not make any loan of money or property to any
director or officer except for (a) advance for expenses anticlpated
ln performance of dutles, (b) payment of premlums on llfe lnsurance
POllCY so long as repayment is secured by proceeds of POllCY, and
(c) loan for purchase of resldence of offlcer in order to secure
servlces.
VI. Reports and Records: The Board shall provlde an annual
report of its operatlons to the Clty Council wlthln nlnety days
after the close of the corporation1s flscal year. The books and
records of the corporation shall be open to inspection by members
of the publlc to the same extent as the public records of the
Clty of Santa Monlca.
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CED:JM:ds
City Councl1 Meetlng: November 15, 1983
Santa MODlca, California
Budget Impact
The actlon recommended by staff ln thlS report does not have
a budget lmpact. Funds for the capltalization of the PRC have been
appropriated In thlS year's budget in Account 30-400-626-000-506.
Recommended Actlon
Staff resoectfully recommends that the Council take the
followlng actlons:
1. Approve the attached Artlcles of Incorporatlon and Bylaws
of the Pler Restoration Corporatlon.
2. Appolnt the Clty Manaqer as Sole Incorporator.
3. Dlrect the Sole Incorporator to execute and cause to be
flleo the Articles of Incorporatlon.
4. Dlrect the Sole Incorporator to adopt the Bylaws.
5. Dlrect the Sole Incorporator to elect the slate of
Dlrectors, prevlously adopted by Councll on September 13, 1983.
6. Dlrect the Clty Manager to negotlate an Interim Agreement
for serVlces to be provlded by the PRC for the remalnder of flscal
year 1983-84 and return to COUDCll for approval no later than
December 13, 1983.
7. Dlrect the Clty Manager to develop and negotiate a SerVlce
Contract WhlCh wlll deflne the role and responsibllity of the pier
Restoratlon Corporatlon and return to Counell for approval no later
than June 1, 1984.
Prepared by: Judith Melster, Pier Development Manager, CjED Department
Attachment A: Articles of Incorporatlon
Attachment B: Bylaws
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ATTACHMENT p.~
ARTICLES OF INCORPORATION
OF
SANTA MONICA pmR R'FRTORAnON CORPORATION
AR'ftCLE I
The name of this corporation is SANTA MONICA PIER RESTORA nON COR-
PORA TlON
AR'nCLB n
A. This corporation is a nonprofit public benefit corporation and is not
organized for the private gain of any person. It is organized under the Nonprofit Public
Benefit Corporation Law for charitable purposes.
B. This corporation's specific and primary purposes are to lessen the burdens of
government by maintaining and operating the public educational and recreational
facility in the City of Santa Monica commonly known as the Santa Monica Pier.
ARTICLE m
The name and address in the State of California of this corporation's initial agent
for service of process is:
Michael D. Miller, Esq.
Stern & Miller, A Professional Corporation
701 Santa Monica Boulevard
The Third Floor
Santa Monica, California 90401
ARTICLE IV
A. This corporation is organized and operated exclusively for charitable and
educational purposes within the meaning of Section 501(c){3) of the Internal Revenue
Code.
B. No substantial part of the activities of this corporation shall consist of
carrying on propaganda, or otherwise attempting to influence legislation, and the
corporation shall not participate or intervene in any poll tical campaign (ineluding the
publishing or distribution of statements) on behalf of any candidate tor publie office.
C. Notwithstanding any other provision of these Articles, the corporation shall
not carry on any activities not permitted to be carried on (a) by a corporation exempt
from Federal income tax under S 501(cX3) of the Internal Revenue Code ot 1954 (or the
corresponding provision of any future United States Internal Revenue law), or (b) by a
corporation exempt from California corporate income and franchise taxes under
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. California Revenue and Taxation Code S 23701d (or the corresponding provisIon of any
future California revenue or taxation law).
AR'I1CLE V
A. The property of thlS corporation IS irrevocably dedicated to charitable and
educational purposes and no part of the net income or assets of this corporation shall
ever inure to the benefit of any director, officer or private shareholder thereof or to
the benefit of any private person or individual. Upon the dissolution or wmdmg up of
the corporation, Its assets remaming after payment, or prOVISion for payment, of all
debts and l1abilitIes of this corporation shall be dIStributed to the City of Santa Monica,
or to such nonprofit fund, foundation or corporation which IS orgarnzed and operated
exclusively for charitable or educational purposes and which has established Its tax
exempt status under Section 501(c){3) of the Internal Revenue Code, as may be
designated by the City Council of the CIty of Santa Monica. The purposes contained in
this paragraph are limited to meeting the requirements for a welfare exemption under
Section 214 of the Califorma Revenue and Taxation Code.
B. If this corporation holds any assets in trust, or a corporation is formed for
charitable purposes, such assets shall be disposed of in such manner as may be directed
by decree of the Superior Court of the county in which the corporation has its principal
offIce, upon petition therefor by the Attorney General or by 8 person concerned in the
liquidation, in a proceeding to WhICh the Attorney General is a party.
ARTICLE VI
The corporation may admit persons to membership subject to the terms and
conditions set forth in the By-laws.
DATED: November
, 1983
John H. Alschuler, Jr., Incorporator
The undersigned hereby declares that he is the person who executed the foregoing
Articles of Incorporation, which execution IS the act and deed of the undersigned.
JOHN H. ALSCHULER, JR.
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ATTACHHENT B
BYLAWS
OF
SANTA MONICA pmR ~TORATION CORPORATION
a CAlifornia nonprofit public benefit corporation
ARTICLE L OFFICES
Section 1. Principal Office. The corporation's principal office shall be fixed
and located at such place in the City of Santa Monica, California as the Board of
Directors (herein called the "Boardfl) shall determine. The Board is granted full power
and authorIty to change said principal office from one location to another.
Section 2. Other Offices. Branch or subordinate offices may be established
at any time by the Board at any place or places.
ARTICLE lL MRMlIERS
...
Section 1. Member. The CIty of Santa Monica shall be the sole Member
(herein called the uMember1') of this corporation and shall act through its City Council
(the "City Council") in accordance with the City Charter, the City's Municipal Code
and the applicable state laws. The fmction of the Member shall be to elect the Board
of Du-ectors, to approve any amendment to these Bylaws, to approve the corporation's
budget and to perform other duties as the Board of Directors may from time to time
aSSIgn or establish with the prior approval of the Member.
Section 2. Meetings of Member. There shall be an annual meeting of the
Member of this corporation held each year during the second week of November or as
soon thereafter as possible at such time and place as may be determined by the
Member. A special meetmg of the Member may be held upon call by the Member. All
meetings of the Member shall be conducted at meetmgs of the City Council, and shall
be pla~ed on the agenda. of the City Council meetings in accordance with the City
Council's regular procedures.
Section 3. Notice of Meetings. Written notIce of each annual or special
meeting shall be given to the Member either personally or by mail or other means of
wrItten commUnication, charges prepaid, addressed to such Member as follows: City
of Santa Momea, 1685 Main Street, Santa Monica, California 90401, Attention: Office
of the City Clerk or to such other address or addresses as shall be given by it to the
corporation for the purpose of notice. All such notices shall be sent to the Member
not fewer than ten (10) nor more than ninety (90) days before each meeting; shall
speCIfy the place, day and hour of such meetmg; shall state the general matter of the
business or proposal to be considered or acted upon at such meeting; and shall contain
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a request that the City Clerk ("City Clerk") of the City of Santa Monica give such
publIc notice of the 'meetmg as may be required by the Ralph M. Brown Act (California
Government Code secbons 54950 et se<;).). Such notice shall also be given to the City
Manager (the "City Manager") of the City of Santa Monica. Such notice shall comply
with section 5511 of the California Nonprofit Publ1c Benefit Corporation Law.
Secbon 4. Quorum. The presence in person of a majority of the City Council
shall constitute a quorum for the transaction of business at all meetings.
Section 5. Action. Membership action shall be effective upon written
notification to the corporation by the CIty Clerk.
Section 6. ARROCiates. Nothing In this Article n shall be construed as
limiting the right of the corporation to refer to persons associated with it as
f1membersff even though such persons are not members, and no such reference shall
constitute anyone a member, within the meaning of Section 5056 of the California
Nonprofit Public BenefIt Corporation Law. The corporation may confer by amendment
of its Articles or of these Bylaws some or all of the rights of a member, as set forth in
the California Nonprofit Public BenefIt Corporation Law, upon any person or persons
who do not have the right to vote for the election of directors or on a disposItion of
substanti~ lly all of the assets of the corporation or on a merger or on a dissolution or
on changes to the corporation's Articles or Bylaws, but no such person shall be a
member within the meaning of said Section 5056.
ARTICLE In. DIRECTORS
Section 1. Powers. Subject to limitations of the Articles and these Bylaws,
the activities and affairs of the corporation shall be conducted and all corporate
powers shall be exercised by or under the direction of the Board. The Board. may
delegate the management of the activities of the corporation to an Executive Director
and Staff, to any other person or persons, or to committees however composed,
provided that the activities and affairs of the corporation shall be managed and all
corporate powers shall be exercised under the ultimate direction of the Board.
Without prejudice to such general powers, but subject to the same limitations, it is
hereby expressly declared that the Board shall have the follOWing powers in addition to
the other powers enumerated in these Bylaws:
(a) To select and remove an Executive Director, officers,
agents, and employees of the corporation, prescribe powers and duties for them
as may not be inconsistent WIth law, the Articles, or these Bylaws, fix their
compensation, and require from them security for faithful service; provIded,
however, that the selection of the Executive Director of the corporation shall be
SUbject to the express WrItten eonsent of the City Manager.
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(b) - To conduct, manage, and control the affairs and activities
of the corporation and to make such rules and regulations therefor not Incon-
sIStent with law, the Articles, or these Bylaws, as they may deem best.
(e) To adopt, make and use a corporate seal and to alter the
form of such seal from time to time as they may deem best.
(d) To borrow money and Incur indebtedness for the purposes of
the corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations, or other evidences of debt and securities therefor,
subject, however, to the prior approval of the Member.
(e) To carryon a business at a profit and apply any profit that
results from the business activity to any activity in which it may lawfully
engage, subject, however, to the restrictions contained in the Articles.
Section 2. Number of Directors. The authorized number of directors shall be
twelve (12) until changed by amendment of the Articles or by a Bylaw.
Section 3. Election and Term of Ofr-lee. Directors shall be elected by the
Member. Directors shall serve for a term of three years, except that the corporation's
initial Directors shall serve for the periods herein set forth. The. initial Board of
Directors shall divide Its members into three groups of four directors each by drawing
- Jots.
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One group shall serve for 8. term of two yeers and shall hold office
until the second annual meeting of the Member ("Group A Directors"). Successors to
the initial Group A Directors shall be elected to and shall thereafter likewise serve for
a term of two years and shall hold office until the fourth annual meeting of the
Member. Thereafter all successors to Group A Directors shall be elected to and shall
serve for a term of three years. The second group of initial directors (ftGroup B
Directorsft) shall serve for a term of three years and shall hold office until the third
annual meeting of the Member. Successors to the initial Group B Directors shall be
elected to and shall thereafter serve for a term of two years and shall hold offlce until
the fifth annual meeting of the Member. Thereafter all successors to Group B
Directors shall be elected to and shall serve for a term of three years. The third group
of Initial direetors shall serve for a term of three years and shall hold office until the
third annual meeting of the Member ("Group C DlI'ectors"). Successors to the ir..itial
Group C Directors shall be elected to and shall serve for a term of three years.
Commencing with the second annual meeting of the Member, election of directors to
succeed directors whose terms have expired shall occur annually by the Member at the
annual meeting of the Member and such dI.rectors shall serve for terms as hereinabove
set forth. DIrectors shall, however, hold office until their successors are elected and
qualified. The Member shall adopt a nomination and electlOn procedure that will
comply WIth Sectlon 5520 of the California Nonprofit Public Benefit Corporation Law.
Section 4. Vacancies. Subject to the' proviSIOns of Section 5226 of the
California Nonprofit Public Benefit Corporation Law, any director may resign
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effective upon giving written notice to the Ch8.lI' of the Board, the Secretary, or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may be
elected before such time, to take office when the resignation becomes effective.
Vacancies in the Board shall be filled by the Member. Each
director so selected shall hold office until the expiratIon of the term of the replaced
director and until a succesor has been elected and qualified.
A vacancy or vacancies in the Board shall be deemed to exist in
case of the death, reSignation, or removal of any director, or if the authorized number
of directors is increased.
The Board may declare vacant the office of a director who has
been declared of unsound mind by a final order of court, or convicted of a felony, or
found by a final order or judgment of any court to have breached any duty arising
under Article 3 of the California Nonprofit Public Benefit Corporation Law or who has
failed to attend six (6) regular meetings of the Board within a twelve (12) month
period. A director may be removed without cause by the vote of six (6) City Council
members. A removed director's successor may be elected immediately.
No reduction of the authorized number of directors shall have the
sffect of re moving any director prior to the expiration of the director's term of office.
_ Section 5. Place of Meeting. Meetings of the Board shall be held at any
... place within the City of Santa Monica, State of California which is open to the public
and which has been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal office of the corporation,
in which case the principal office of the corporation shall be open to the pUblic for the
meeting of the Board.
Section 6. Annual Meetings. The Board shall hold an annual meeting for the
purpose of organiza.tion, election of officers, and the transaction of other business.
Section 7. RegulAI' Meetings. Regt_ll~!, meetings of the Board shall be held on
such dates and at such bmes as may be fixed by the Board. NotIce of regular meetings
shall be pubbshed once in a newspaper of general Circulation in the City of Santa
Monica and shall be sent to the City Clerk and the City Manager not fewer than four
(4) nor more than ten (10) days before such meeting. The notice shall specify the
business intended to be conducted at the meeting, but any business transacted at such
meeting shall be validly conducted, so long as not otherwise inconsistent with law, the
Articles or these Bylaws.
Section 8. Special Meetings. Special meetings of the Board for any purpose
or purposes may be called at any time by the Chair of the Board, the Executive
Director, any VICe Chair, the Secretary, or any three directors.
Special meetings of the Board shall be held upon four days notice
by fIrst-class mail or 48 hours notice given personally or by telephone, telegraph,
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telex, or other similar means of communIcation. Any such notice shall be addressed or
delivered to each director at such director's address as it is shown upon the records of
the corporation or as may have been given to the corporation by the director for
purposes of notice or, if such address is not shown on sueh records or is not readily
ascertainable, at the place in which the meetings of the dIrectors are regularly held.
Sueh notice shall also be given to: (a) Two (2) daily newspapers of general circulAtion
in the City of Santa Monica; (b) such other news media In the County of Los Angeles
that has filed a written request therefor with the Secretary of the corporation; and
(c) the City Clerk and the CIty Manager. The notice shall specify the purpose of the
meeting, but any busmess transacted at such meeting shall be validly conducted, so
long as not otherwise inconsistent with law, the Articles or these Bylaws.
Notice by mail shall be deemed to have been given at the time a
written notice is depOSIted in the United States mails, postage prepaid. Any other
written notice shall be deemed to have been given at the time it is personally
delivered to the recipient or is delivered to a common carrier for transmission, or
actually transmitted by the person giving the notice by electronic means, to the
recipient. Oral notice shall be deemed to have been given at the time it is
communicated, in person or by telephone or wireless, to the recipient or to a person at
the office of the recipient who the person giving the notice has reason to believe will
promptly communicate it to the receiver.
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Section 9. Quorum. Seven (7) directors constitute a quorum of the Board for
_ the transaction of business, except to adjourn as provided in Section 12 of thIS Article
m. Every act or decision done or made by a majority of the number of directors
authorized by these Bylaws shall be regarded as the act ot the Board, unless a greater
number is required by law, by the Articles 01" by these Bylaws.
Section 10. Participation in Meetings by Conference T~!~e. Members of
the Board may participate in a meeting through use of conference telephone or similar
communications equipment, so long as all pel"SOns partiCIpating in or present at such
meeting can hear one another, and so long as not less than a quorum of the Board is
present in person at the meeting. In order to vote at such a meeting, any director
participating through the use of conference telephone or sirnilAl' communications
equipment must have so participated for the entire portion of such meetmg precedmg
such vote.
Section 11. Waiver of Notice. Notice of a meeting need not be gIven to any
director who signs a waiver of notll~e or a wrItten eonsent to holding the meeting or an
approval of the minutes thereof, whether before or after the meeting, or who attends
the meeting without protesting, prIor thereto or at its commencement, the lack of
notice to such director. All such waivers, consents, and approvals shall be filed with
the corporate records or made a part of the minutes of the meetings.
Section 12. Adjournment. A majority of the direetors present, whether or not
a quorum IS present, may adjourn any dIrectors' meetmg to another time and place.
NotIce of the time and place of holding an adjourned meeting need not be given to
absent directors, nor to the news medlaJ the City Clerk or the City Manager if the
time and place IS fixed at the meeting adjourned, except as provided in the next two
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sentences. If the meeting is adjourned for more than seventy-two (72) hours, notice of
any adjournment to another time or place shall be given prior to the time of the
adjourned meeting to the directors who were not present at the time of the
adjournment. A written notice of adjournment setting forth the time and place of the
adjourned meeting shall be conspicuously posted on or near the door of the place where
the regular, adjourned regular, special or adjourned special meeting was held within 24
hours after the time of adjournment, and shall remain posted until at least the time
specified therein for the commencement of the adjourned meeting.
Section 13. Public Meetings. All meetings of the Board shall be open and
pUblic, and any person shall be permitted to attend any meeting of the Board, except
as otherwise provided in this section. Members of the pUblic shall be entitled to
participate m accordance with such rules as may be adopted by the Board from time to
time. Nothing contained in this section or these Bylaws shall be construed to prevent
the Board from holding closed sessions to the extent permitted by applicable law
(a) for the purpose of discussing matters related to litigation, including pending,
threatened or anticipated litigation; (b) to consider the appointment, employment,
evaluation of performance, or dismissal of an employee or to hear complaints or
charges brought against an employee by another person or employee unless such
employee requests a public hearing or (c) for such other purposes as may be permitted
by the Ralph M. Brown Act (California Government Code Sections 54950 ~ seq.);
provided, however, that the final vote of the Board on any action to be taken by the
corporation with respect to the appointment, employment or dismissal of an employee
sh~ be taken at a meeting of the Board while such meetmg is open to the public.
Section 14. Rights of InBpeetion. Every director shall have the absolute right
at any reasonable time to inspect and copy all books, records, and documents of every
kind and to inspect the physical properties of the corporation.
Section 15. Committees. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of the
authority of the Board except with respect to:
(a) The approval of any action for whiCh the California Non-
profit Public Benefit Corporation Law also requires approval of the members or
approval of a majority of all members;
(b) The filling of vacancies on the Board or lD any committee
which has the authority of the Board;
(c) The fixing of compensation of the directors for serving on
the Board or on any com mittee;
(d) The amendment or repeal of bylaws or the adoption of new
byla ws;
(e) The amendment or repeal of any resolution of the Board
which by its express terms is not so amendable or repealable;
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(f) . The appointment of other committees of the Board or the
members thereof;
I (g) The expenditure of corporate funds to support a nominee for
directorj or
(h) The approval of any self-dealing transaction, as such ~
actions are defined in Section 5233(a) of the California Nonprofit Public BenefIt
Corporation Law.
Any such committee must be created, and the members thereof
appointed, by resolution adopted by a majority of the authorized number of directors
then in office, provided a quorum is present, and any such committee may be
designated an Executive Committee or by such other name as the Board B~All specify.
The Board may appoint, in the same manner, alternate members of any committee who
may replace any absent member at any meeting of the committee. The Board shall
have the power to prescribe the manner in which proceedings of any such committee
shall be conducted. In the absence of any such preseription, such committee shall have
the power to prescribe the manner in which its proceedings shall be conducted. Unless
the Board or such committee shall otherwise provide, the regular and special meetings
and other actions of any such committee shall be governed by the provisions of this
Article m applicable to meetings and actions of the Board. Minutes shall be kept of
each meeting of each committee.
Section 16. Pees and CompeDBlltion. Directors end members of committees
s}ull1 receive no compensation for their services as such directors or members, but may
receive such reimbursement for expenses, as may be fixed or determined by the Board.
,...
AR'11CLE IV. TJlAliISACTlOMS IN WHICH DIRECl'OBS
HAVE IlATRR1Al. PIRARCfAT.1NTEB.BST
Section 1. ProbibitiOll ~m.t Self-~1i"l Transactions. The corporation shall
not enter into any transaction in which one or more of its directors has a material
financial interest, unless the transaction meets the requirements of paragraph (a), (b)
or (c) of Section 2 of this Article IV. For purposes of this Article IV, a "self-dealing
transaction" means a transaction to which the corporation is a party and in which one
or more of its directors has a material financial interest. For purposes of this Article
IV, such a director is referred to as an "interested director." This section shall not be
construed to prohibit (a) a transaction whic.h is part of 8 public. or charitable program
of the corporation if it: (i) is approved or authorized by the corporation in good faith
and without unjustified favoritism; and (ii) results in a benefit to one or more directors
or their families because they are in the class of persons intended to be benefited by
the public or charitable program; or (b) a transaction, of which the interested director
or directors have no actual knowledge, and which does not exceed the lesser of 1
percent of the gross receipts of the corporation for the preceding fiscal year or one
hundred thousand dollars ($100,000).
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Section 2. "ermlttecJ Self-Dealing 'J'raI8aetioaL The corporation ....11 be
authorized to engage in a &e1f-d~lillg transaction if:
(a) The California Attorney General or the court in an action in
which the California Attomey General is an indispensable party, bas
approved the transaction before or after it was consummated; or
(b) The following facts are established:
0) The corporation entered into the transaction for its
own benefit;
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(ii) The transaction was fair and reasonable as to the
corporation at the time the corporation entered into the
transaction;
(lli) Prior to consummating the transaction or any part
thereof, the Board authorized or approved the transaction in
good faith by a vote of a majority of the direetors then in office
without counting the vote of the interested director or directors,
and with lmowledge of the material facts concerning the trans-
action and the director's interest in the transaction. Except as
provided in paragraph (c) of this Section 2, action by a commit-
tee of the Board shall not satisfy this paragraph; and
(iv) (A) Prior to authorizing or approving the transac-
tion the Board considered and in good faith aetermined after
reasonable investigation under the circumstances that the corpo-
ration could not have obtained a more advantageous arrangement
with reasonable effort under the circumstances; or
(B) The corporation in fact could not have obtained
a more advantageous arrangement with reasonable effort
under the eircumstances; or
(c) The following facts are established:
(i) A eommittee or person authorized by the Board
approved the transaction in a manner consistent with the stan-
dards set forth in paragraph (b) of this Section 2;
(ii) It was not reasonably practicable to obtain approval
of the Board prior to entering into the transaction; and
(iii) The Board, after determining in good faith that the
conditions of subparagraphs (i) and (il) of this paragraph were
satisfied, ratified the transaction at its next meeting by a vote
of the majority of the directors then in offiee without counting
the vote of the interested director or directors.
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Seetlon 3. ProbIblted LoaDs ad Guarantees. 'lbe corporation shall not make any
loan of money or pl"Operty to or guarantee the obligation of any director or officer,
unless approved by the California A ttomey General, except that:
(a) The corporation may advance money to a director or officer of
the corporation for expenses reasonably anticipated to be incurred in the
performance of the duties of such officer or director, provided that in the
absence of web advance, such director or officer would be entitled to be
reimbursed for such expenses by the corporation;
(b) The corporation may pay premiums in whole or in part on a life
insurance polley on the ute of the director or officer 80 long as repayment
to the corporation of the amOWlt paid by it is secured by the proceeds of the
poliey and its cash surrender valuej and
(c) The corporation may loan money to or for the benefit of an
officer in circumstances where the loan is necessary, in the judgment of the
Board, to provide financing for the purchase of the principal t:esidence of
the officer in order to secure the services or continued services of the
officer and the loan is secured by real property located in the State of
c.Ufornia.
AR-TlCLE v. 'OPPlCEBS
Section 1. OffieerL The officers- of the corporation shall be a Chair of the
Board, a Secretary, and a Chief Financial Officer. The corporation may also have, at
the discretion of the Board, one or more Vice-Chairs, one or more Assistant Secretar-
ies, one or more Assistant Treasurers, an Executive Director and such other officers as
may be elected or appointed in accordance with the provisions of Section 3 of this
Article V. Any number of offices may be held by the same person except as provided in
the Articles or in these Bylaws and except that neither the Secretary, any Assistant
Secretary, the Chief Financial Officer, nor any Assistant Treasurer may serve concur-
rently as the Executive Director or the Chair of the Board.
Section 2. E1eetloD. The officers of the corporation, except the Executive
Director and such other officers as may be elected or appointed in accordance with the
provisions of Section 3 or Section 5 of this Article V, shall be chosen annually by, and
shall serve at the pleasure of, the Board, and shall hold their respective offices until
their resignation, removal, or other disqualification from service, or until their
respective successors shall be elected.
Section 3. Sd>ordinate Officers. The Board may elect, and may empower the
Chair of the Board to appoint, the Executive Director and such other officers as the
business of the corporation may require, each of whom shall hold office for such period,
have such authority, and perform such duties as are provided in these Bylaws or as the
Board may from time to time determine.
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SectIon 4. Removal and Resignation. Any officer may be removed. either with or
without cause, by the Board at any time or, except in the case of an officer chosen by
the Board, by any officer upon whom such power of removal may be conferred by. the
Board. Any such removal shall be without prejudice to the rights, if any, of the officer
under any contract of employment of the offIcer.
Any officer may resign at any time by giving written notice to the
corporatIon, but without prejudice to the rights, If any, of the corporation under any
contract to which the officer 15 a party. Any such resignation shall take effect at the
date of the receipt of such notIce or at any later time specified therem and, unless
otherwise specifIed therein, the acceptance of such resignatIon shall not be necessary
to make It effective.
Section 5. Vaeancies. A vacancy in any office because of death, resimlatio!l,
removal, disqualification, or any other cause shall be filled in the manner prescribed m
these Bylaws for regular election or appointment to such office, provided that such
vacancies shall be filled as they occur and not on an annual basis.
Section 6. C}mi.. of the Board The Chair of the Board shall, if present, preside at
all meetings of the Board and exercise and perform such other powers and duties as may
be assigned from time to time by the Board. The Chair of the Board must be a director
of the corporatIon.
. Section 7. Exeeutive Direetor. Subject to such powers, If any, as may be given by
- the Board to the Chair of the Board, and SUbject to the Board's determmation as to
-... -wl1ether the ExecutIve Director shall be an officer of the corporation, the Executive
DIrector shall be the chief executive officer and chief operating officer of the
corporation and shall have, subject to the control of the Board, general supervision,
direction and control of the business and other officers of the corporation. At the
Board's discretion, the Executive Director shall have the general powers and duties of
management UsuA.lly vested in the office of the president of a corporation and such
other powers and duties as may be prescribed by the Board. The Executive Director
shall not be a. director of the corporation and need not be an officer of the corporation.
Section 8. Vice Chairs. In the absence or disability of the Chair of the Board the
Vice-Chairs, if any are appointed, m order of their rank as fixed by the Board or, if not
ranked, the Vice-Chair designated by the Board, shall preside at meetings of the Board
and shall perform all the duties of, and be subject to all the restrictions upon, the Chair
of the Board. The Vice-Chairs shall have such other powers a.nd perform such other
duties as from time to time may be prescribed for them respectively by the Board. All
VIce-Chairs must be directors of the corporation.
Section 9. Secretary. The Secretary shall keep or cause to be kept, at the
principal office or such other place as the Board may order, a book of minutes of all
meetings of the Board and its committees, with the time and place of holding, whether
regular or special, and If spec18.1, how authorized, the notlce thereof gIven, the names
of those present at Board and committee meetings, and the proceedings thereof. The
Secretary shall keep, or cause to be kept, at the principal office in the State of
California the original or a copy of the corporation's Articles and Bylaws, as amended
to date.
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The Secretary shall glVe, or cause to be given, notice of all meetings of the
Board and any committees thereof required by these Bylaws or by law to be given, shall
keep the seal of the corporation is safe custody, and shall have such other powers and
perform such other dutIes as may be prescribed by the Board. In the absence or
dlSS.bility of the ChaIr of the Board and all Vice-Chairs, the Secretary shall preside at
meetings of the Board if the Secretary is a director of the corporation. The Secretary
may but need not be a dIrector of the corporation.
SectIon 10. Chief Financial Officer. The ChIef FinanCIal Officer shall keep and
maintam, or cause to be kept and mamtained, adequate and correct accounts of the
properties and business transactions of the corporation. The books of account shall at
all times be open to inspection by any director.
The Chief Financial OffIcer shall deposit all moneys and other valuables in
the name and to the credIt of the corporation with such depositories as may be
deSIgnated by the Board. The Chief Financial Officer shall disburse the funds of the
corporation as may be ordered by the Board, shall render to the Executive Director and
directors, whenever they request it, an account of all transactions as Chief Financial
Officer and of the financial condition of the corporation, and shall have such other
powers and perform such other duties as may be prescribed by the Board. In the
absence or disability of the Chair of the Board, all Vice-Chairs and the Secretary, the
Chief Financial Officer shall preside at meetings of the Board, if the Chief Financial
Officer IS a director of the corporation. The Chief Financial Officer may but need not
_ be a director of the corporation.
ARTICLE VL REPORTS, RECORDS AND RIGHTS OF INSPECTION
Section 1. Annm.l Report to Member. Within nmety (90) days after the close of
the corporation's fiscal year, the Board shall cause an annual report of its operations to
be provided to the City Council. Such report shall contam, in appropriate detail, the
following:
(a) The assets and liabilities, including the trust funds, of the
corpora.tion as of the end of the fiscal year.
(b) The prinCipal changes m assets and liabilities, including trust
funds, during the fiscal year.
(c) The revenue or receIpts of the corporation, both unrestricted a.nd
restricted to particular purposes, for the fiscal year.
(d) The expenses or disbursements of the corporation, for both
general and restricted purposes, durIng the fjscal year.
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(e) Any mformation reqUired by Section 5322 of the California
Nonprofit Public Benefit CorporatIOn Law (pertainIng to certain transac-
tions and mdemnificatlOns involving interested persons).
(f) A narrative description of the corporation's principal activities
during the fiscal year.
(g) Such other information concerning the corporation as may be
requested by the City Council in writing not less than ninety (90) days
preceding the end of such fiscal year.
Section 2. Reeords and Rights of Inspection. The corporation shall keep adequate
a.nd correct books and records of account and minutes of the proceedings of its Member,
the Board and committees of the Board. Minutes shall be kept in written form. Other
books and records shall be kept either in written form or in any form capable of being
converted into written form. The books and records of the corporation shall be open to
inspection and copying by members of the public to the same extent as the public
:records of the City of Santa Monica.
ARTICLE VB.. INDEMNIFICATION
Section 1. Statutory Indemnity. This corporation shall indemnify its Directors,
officers and employees to the fullest extent permitted of the Calfornia Nonprofit
Public Benefit Corporation Law.
Section 2. N onapplieability to Fidueiaries of Employee Benefit Plans. This Arti-
ele VII does not apply to any proceeding against any trustee, investment manager, or
other fidUCiary of an employee benefit plan in such person's capacity as such, even
though such person may also be an agent of the corpora bon as defined in Section 1 of
this Article Vll. The corporation shall have power to indemnify such trustee,
investment manager, or other fiduciary to the extent permitted by subdivision (f) of
Section 207 of the Califomia General Corporation Law.
ARnCLEvnL OTHKRPRO~ON8
Section 1. Endorsement of Documents; Contracts. Subject to the prOVIsions of
applicable law and these Bylaws, any note, mortgage, evidence of indebtedness,
contract, conveyance, or other instrument In wrIting and any aSSignment or endorse-
ment thereof executed or entered into between the corporation and any other person,
when signed by (a) the Executive Director, Of (b)(i) the Chair of the Board or any Vice-
ChaJr and (b)(ii) the Secretary, any Assistant Secretary, the Chief Financial Officer, or
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any Assistant Treasurer of the corporation shall be valid and bindIng on the corporation
in the absence of actual knowledge on the part of the other person that the signing
officers had no authority to exeeute the same. Any such instruments may be signed by
any other person or persons in such manner as from time to time shall be determmed by
the Board~ and~ unless so authorized by the Board~ no offIcer, agent~ or employee shall
have any power or authority to bind the corporation by any contract or engagement or
to pledge its credIt or to render it liable for any purpose or amount.
Section 2. Representation of Shares of Other Corporations. The Chair of the
Board or any other officer or officers authorIzed by the Board or the Chair of the Board
are each authorized to vote, represent, and exercise on behalf of the corporation all
rights incident to any and all shares of any other corporatIon or corporations standing in
the name of the corporation. The authority herein granted may be exercised either by
any such officer in person or by any other persons authorized so to do by proxy or power
of attorney duly executed by said offIcer.
Section 3. Construction and Definitions. Unless the context otherwise requires,
the general provisions, rules of construction, and definitions contained in the General
Provisions of the California Nonprofit Corporation Law and in the Cali forma Nonprofit
Public Benefit Corporation Law shall govern the construction of these Bylaws.
Section 4. Establishment of Piseal Year. The fiscal year of this corporation shall
end on June 30 of each year.
Section 5. Amendments. These Bylaws may be amended or repealed by the
approval of the Board, effective only upon the Member1s wrItten approval given in
accordance with Section 5 of Article n.
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THIS IS TO CERTIFY:
That I am the duly elected, qualifIed and acting Secretary of Santa Monica Pler
Restoration CorporatIon and that the above and foregolng By-Laws were adopted as the
By-Laws of said corporation on the day of November, 1983 by the sole
incorporator of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this
1983.
day of November,
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