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SR 10-10-2017 3J City Council Report City Council Meeting: October 10, 2017 Agenda Item: 3.J 1 of 4 To: Mayor and City Council From: Jacqueline Seabrooks, Police Chief, Police Department Subject: Consideration of five persons nominated by City staff to serve as the first nonprofit Board of Directors for the Friends of Santa Monica Animal Shelter Recommended Action Approve five persons nominated by City staff to serve as the first nonprofit Board of Directors for the Friends of Santa Monica Animal Shelter to initially serve two or three- year terms. Executive Summary In response to Council direction, staff worked to establish the Friends of the Animal Shelter (“Nonprofit”) as a non-profit partner of the Santa Monica Animal Shelter (“Animal Shelter”). Staff now nominates and seeks Council approval of five people to serve as the first Board of Directors for the Nonprofit. The Nonprofit would serve as a fundraising arm to the Santa Monica Animal Shelter. The Nonprofit will assist the Animal Shelter in acquiring much needed resources by helping to increase donation opportunities through fundraising and development of community partnerships. These efforts will help ensure that the Animal Shelter continues providing the highest quality of care. Per staff recommendations during the City Council review on December 18, 2015, the initial Board of Directors shall be approved by the City Council (Attachment A). Background On October 28, 2014, Council approved staff's proposal to incorporate a nonprofit entity to partner with the Animal Shelter and directed staff to establish articles of incorporation and bylaws (Attachment B and C). Staff returned to Council on December 8, 2015, to present articles of incorporation and bylaws, which were approved by Council. Staff now returns to Council to request approval of five nominees to serve as the initial Board of 2 of 4 Directors to the Nonprofit. Staff also filed the Nonprofit’s articles of incorporation with the State of California. The Animal Shelter is operated by the Santa Monica Police Department. The Animal Shelter houses lost or stray animals, animal victims of injury or abuse, confiscated stolen animals, animal evidence in criminal investigations, and occasionally City-owned Police K-9's and Police Horses. Paid staff, supplemented by a volunteer corps, feed, clean, vaccinate, medicate, microchip, and exercise the animals as well as facilitate animal adoptions. The Animal Shelter is also responsible for the care and shelter of animals displaced during a natural or manmade disaster. The quality and quantity of services provided at the Shelter are currently limited to the funds provided by the City’s budget and some limited donated funds and services. The Nonprofit’s primary role will be fundraising for the Animal Shelter. The Nonprofit will not participate in management of the shelter or supervision of staff. Funds and services resulting from the Nonprofit’s fundraising efforts could be utilized for Shelter programs, equipment, and comfort items for housed animals as well as sustainability of the Police Department's Mounted Unit and K-9 programs. Discussion The five-member Board of Directors will serve as the governing entity for the Friends of the Animal Shelter. The bylaws require that each Board member live in the City of Santa Monica or work in a veterinarian-care related field within the City of Santa Monica. Board members must also be residents of the State of California prior to appointment. On December 18, 2015, Staff proposed appointment of initial Board members via nomination by the Animal Shelter Public Services Administrator and a multi-disciplinary team comprised of the City’s leadership staff, followed by Council approval. Once appointed the initial Board of Directors will be divided into two groups and designated by the Board to serve two- or three-year terms. Thereafter, the term of office for each Director shall be three years. The purpose will be to prevent the entire Board of 3 of 4 Directors reaching term limits at the same time. Going forward from the initial Board creation, the Board would be self-appointing in accordance with the Bylaws. Staff has undergone an extensive notification process consisting of press releases, media interviews, multiple social media announcements, and a public posting announcement by the City Clerk’s Office. Staff received a large number of applications. Staff then interviewed the candidates that provided important insight in various areas including veterinary medicine, organizational leadership and nonprofit fundraising. The proposed nominees then completed a criminal background check by the Police Department and staff verified that each nominee meets the necessary qualifications. Nominated Board Members and Background: After considering the strength of the all the applicants, staff recommends the approval of the following five Board member candidates. Each Board member brings a distinct perspective and technical knowledge to the nonprofit, which will be valuable as the organization continues to develop. Jonathan D. Kaufelt, Attorney with training and practice in tax law and trust and estates, primarily for entertainment clients Cynthia E. Fruchtman, Attorney with a solo practice in Santa Monica; practice in labor employment, civil litigation practice in business, real estate, assisted reproduction, bioethics and mediation Cynthia Lauren, Nonprofit leadership consultant; currently an independent consultant working nonprofit and foundation on fund development strategies and programs Stacia Oemig, District Manager with a major pet food distributor; previous experience as a founder and director with a startup non-profit Shana L. Gross, D.V.M, Founder of veterinary home care practice 4 of 4 In addition, the Public Service Administrator overseeing Animal Control Services will serve as a nonvoting member on the nonprofit Board and provide insight and direction on needs of the Animal Shelter. Financial Impacts and Budget Actions None. Prepared By: Alejandro Mendoza, Administrator Approved Forwarded to Council Attachments: A. Staff Report 12/8/2015 - Animal Shelter Non-Profit Organization - Articles of Incorporation and Bylaws (Web Link) B. Staff Report 10/28/2014 - Incorporation of a Non-Profit Organization (weblink) C. Bylaws - Friends of the Santa Monica Animal Shelter 1 FRIENDS OF THE SANTA MONICA ANIMAL SHELTER BYLAWS ARTICLE I. NAME The name of this corporation shall be: FRIENDS OF THE SANTA MONICA ANIMAL SHELTER ARTICLE II OFFICES Section 1. PRINCIPAL OFFICE. This 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 “Board”) shall determine. The Board is granted full power and authority to change said principal office from one location to another. ARTICLE III. OBJECTIVE AND PURPOSES This corporation has been formed under the California Nonprofit Public Benefit Corporation law for the purposes described in its Articles of Incorporation. This corporation shall not, expect except in an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the purposes described in the Articles of Incorporation and these Bylaws. The purposes of this corporation shall include, but not be limited to, increasing donation opportunities through fundraising and development of community partnerships that will assist the City of Santa Monica (the “City”) in acquiring much needed resources in order to ensure the Santa Monica Animal Shelter (the “Shelter”) continues to provide the highest quality of care and services to all Santa Monica animals and to continue the Shelter’s efforts to maintain a low rate of euthanasia by ensuring animals are placed in appropriate homes or rescue group. Targeted donation areas of interest include: equipment specific to an Animal Emergency Management Response Plan; a mobile veterinary clinic; and other items necessary for the care, comfort and control of shelter animals and City-owned Police K-9’s and horses. 2 ARTICLE IV. NONPARTISAN ACTIVITES This corporation shall be nonpartisan. No substantial part of the activities of this corporation shall consist of the publication or dissemination of materials with the purpose of attempting to influence legislation, and this corporation shall not participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office or for or against any cause or measure being submitted to the people for a vote. ARTICLE V. DIRECTORS Section 1. POWERS. (a) General Corporate Powers. The business and affairs of this corporation shall be managed, and all corporate powers shall be exercised, by or under the direction of the Board. (b) Specific Powers. Without prejudice to these general powers, and subject to the same limitations, the Board: (i) Except as otherwise provided in these Bylaws, select and remove all Officers, agents, and employees of this corporation; prescribe any powers and duties for them that are consistent with law, with the Articles of Incorporation, and with these Bylaws. (ii) Change the principal executive office or the principal business office in the City of Santa Monica from one location to another; cause this corporation to be qualified to do business in any other state, territory, dependency, or country and conduct business within or outside of the State of California; and designate any place within or outside of the State of California for the holding of any meeting or meetings including regular meetings. (iii) Adopt, make, and use a corporate seal and alter the form of the seal and certificate. (c) Limitation of General Corporate Powers. Neither the Board nor any individual Director shall have authority over the operations of the Santa Monica Animal Shelter or its staff. Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The number of Directors on the Board shall be not less or more than five (5). All Directors shall live in the City of Santa Monica or work in veterinarian-care related field in the City of Santa Monica. All Directors must be residents of the State of California prior to being appointed to the Board, all prospective Directors shall complete the volunteer process that is currently required by the Santa Monica Police Department. This will include having no felony or serious misdemeanor 3 convictions. Within the first year of their term, Directors shall enroll in the Santa Monica Police Department’s Community Academy program. Section 3. ELECTION AND TERM OF OFFICE OF DIRECTORS. (a) Election. At the first annual meeting, the Directors shall be divided into two groups and designated by the Board to serve two- or three-year terms. Thereafter, the term of office for each Director shall be three years. Each Director, including a Director elected to fill a vacancy, shall hold office until the expiration of the term for which he or she was elected and until the election and qualification of a successor, or until that Director’s earlier resignation or removal in accordance with these Bylaws and California Nonprofit Corporation Law. Thereafter, shall be nominated and elected by the Board at each annual meeting. (b) Term. Except for the initial election, all Directors shall be elected for terms of three (3) years, and eligible for up to three (3) additional three (3) year terms. (c) Chair and Vice Chair of the Board. The Directors shall by majority vote to select a Chair and a Vice Chair of the Board at each annual meeting. The Chair of the Board, or the Vice Chair in the absence of the Chair, shall preside at the meetings of the Board and exercise and perform such other powers and duties as may be from time to time assigned by the Board or prescribed by these Bylaws. Section 4. VACANCIES. (a) Events Causing Vacancy. A vacancy or vacancies on the Board shall be deemed to exist on the occurrence of the following: (i) the death, resignation, or removal of any Director, (ii) the declaration by resolution of the Board of a vacancy of the office of a Director who has been declared of unsound mind by an order of court or convicted of a felony or serious misdemeanor or has been found by final order or judgment of any court to have breached a duty under Sections 5230 and following of the California Nonprofit Corporation law, or (iii) the increase of authorized number of Directors. (b) Resignations. Except as provided in this paragraph, any Director may resign, which resignation shall be effective on giving written notice to the Chair of the Board, the Vice Chair, the Executive Director, or the Board, unless the notice specifies a later time for the resignation to become effective. (c) Removal. (i) Any Director may be removed with or without cause by the vote of the 4 majority of the members of the entire Board at a special meeting called for that purpose, or at a regular meeting, provided notice of that meeting and of the removal questions are given as provided in Section 9 of this Article V. Any vacancy caused by the removal of a Director shall be filled as provided in paragraph (e) below. (ii) Any Director who does not attend three (3) successive Board meetings will automatically be removed from the Board without Board action unless: (A) the Director requests a leave of absence for a limited period of time, and the leave is approved by the Directors at a regular or special meeting; (B) the Director suffers from an illness or disability which prevents him or her from attending meetings and the Board by resolution waives the automatic removal procedure of this subsection (ii); or the Board by resolution of the majority of the Board agrees to reinstate the Director who has missed three (3) successive meetings. If leave is granted as provided in (A), above, the number of Board members will be reduced by one (1) in determining whether a quorum is not present. (d) No Vacancy on Reduction of Number of Directors. No reduction of the authorized number of Directors shall have the effect of removing any Director before that Director’s term of office expires. (e) Filling of Vacancies. Any vacancy caused by the death, resignation, or removal of a Director shall be filled in accordance with the provisions of Section 3 of this Article V. Section 5. PLACE OF MEETING. Meetings of the Board shall be held at any place within the City of Santa Monica 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 this corporation; in which case the principal office of this 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 organization, electing the Board, electing Officers and the transaction of other regular business. Notice of annual meetings shall be in accordance with Section 9 of Article V. Section 7. REGULAR MEETINGS. Regular meetings of the Board shall be held on such dates and at such times as may be fixed by the Board. Notice of regular meetings shall be in accordance with Section 9 of this Article V. Section 8. SPECIAL MEETINGS. Special meetings of the board Directors for any purpose may be called at any time by the Chair of the Board, the Vice Chair, the Executive Director or any two (2) Directors. Notice of Special meetings shall be in accordance with Section 9 of this Article V. Section 9. NOTICE OF MEETINGS. 5 (a) Notice of Annual and Regular Meetings. Notice of each Annual or Regular Meeting shall be in writing and given at least three (3) but no more than ten (10) days prior to the meeting date. The notice shall be given either personally, by electronic transmission as provided in Section 3 of Article X of these Bylaws, or by first-class, registered, or certified mail, or by other means of written communication, charges prepaid. 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 such records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. The notice shall specify the purpose of the meeting, but any business transacted at such meeting shall be considered validly conducted, so long as not otherwise inconsistent with the law, the Articles of Incorporation, or these Bylaws. (b) Notice of Special Meetings. Notice of each Special Meeting of the Board shall be in writing and given at least twenty-four (24) hours but no more than seven (7) days prior to the meeting date. The notices shall be given either personally, by electronic transmission as provided in Section 3 of Article X of these Bylaws, or by first-class, registered or certified mail, or by other means of written communication, charges prepaid. Any such notice shall be addressed or delivered to each Director at such Director’s address as it shown upon the records of the corporation or as may have been given to the records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. The notice shall specify the purpose of the meeting, but any business transacted at such meeting shall be considered validly conducted, so long as not otherwise inconsistent with the law, the Articles of Incorporation, or these Bylaws. (c) Compliance with Open Meeting Laws. Notwithstanding any of the foregoing, notice of meetings, including adjournment, shall also be given in accordance with the provisions of the Ralph M. Brown Act, California Government Code section 54950 et seq. (the “Brown Act”). The noticing provisions set forth in this Section 9 of Article V shall be subject to any amendments of the Brown Act. Section 10. QUORUM. A majority of the number of Directors in office shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 13 of this Article V. Every act or decision done by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, subject to the provisions of the California Nonprofit Corporation Law, except those provisions relating to (i) approval of contracts or transactions in which a Director has a direct or indirect material financial interest and (ii) indemnification of Directors. Section 11. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Subject to the requirements of the Brown Act, Directors may participate in a meeting through use of conference telephone or similar communications equipment, so long as all persons participating in or present at such meetings 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 similar communications equipment must have so participated for the entire portion of such meeting preceding such vote. 6 Section 12. ADJOURNMENT. A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting to another time and place consistent with the requirements of the Brown Act. 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 in 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 Brown Act; 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 shall be taken at a meeting of the Board while such meeting is open to the public. Section 14. FEES AND COMPENSATION. Directors shall receive no compensation for their services as such Directors. Section 15. RESTRICTION ON INTERESTED DIRECTORS. Not more than forty- nine percent (49%) of Directors at any time may be interested persons. An interested person is (a) any person compensated by the corporation for services rendered to it within the previous twelve (12) months, whether as a full-time, part-time employee, independent contractor, or otherwise; (b) any shareholder, employee or Officer of any corporation, or partner or employee of any partnership, which has rendered compensated services to the corporation within the previous twelve (12) months; and (c) any brother, sister, ancestor, descendent, spouse, brother- in-law, sister-in-law, mother-in-law, or father-in-law of any person described in (a) or (b) of these Bylaws. Any violation of the provisions of this Section shall not, however, affect the validity or enforceability of any transaction entered into by this corporation. ARTICLE VI. OFFICERS Section 1. OFFICERS. This corporation shall have the following Officers: Executive Director, Secretary and Treasurer, and such other Officers as the Board may designate by resolution and appoint pursuant to Section 3 of the Article VI. One person may hold two or more offices, except no person serving as Secretary or Treasurer may serve concurrently as Chair of the Board. Section 2. ELECTION OF OFFICERS. The Officers of this corporation, except those appointed in accordance with the provisions of Section 3 of this Article VI, shall be chosen by the Board, and each shall serve at the pleasure of the Board, subject to the rights, if any, of an Officer under any contract of employment. 7 Section 3. SUBORDINATE OFFICERS. The Board may appoint, and may authorize the Chair of the Board, or another Officer to appoint, any other Officers that the business of the corporation may require, each of whom shall have the title, hold office for the period, have the authority, and perform the duties specified in these Bylaws or determined from time to time by the Board. Section 4. REMOVAL OF OFFICERS. Subject to the rights, if any, of an Officer under any contract of employment, any Officer may be removed, with or without cause, by the Board or Chief of Police, at any regular or special meeting of the Board, or, except in case of an Officer chosen by the Board, by an Officer on whom such power of removal may be conferred by the Board. Section 5. RESIGNATION OF OFFICERS. Any Officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of this corporation under any contract to which the Officer is a party. Section 6. VACANCIES IN OFFICES. A vacancy in any office because of death, resignation, removal, disqualification, or any other cause shall be filled only in the manner prescribed in these Bylaws for regular appointments to that office. Section 7. RESPONSIBILITIES OF OFFICERS. (a) Executive Director. The Executive Director shall be the chief executive officer of this corporation. He or she shall have such other powers and duties as may be prescribed by the Board, the Chief of Police or these Bylaws. The Executive Director role will be filled by the Animal Shelter Public Services Administrator and he/she shall be responsible to the Board, shall see that the Board is advised on all significant matters of this corporation’s business, and shall see that all orders and resolutions of the Board are carried into effect. In the event that there is a void in the Animal Shelter Public Services Administrator position, the Division Commander will assume the responsibilities of Executive Director . The Executive Director shall be empowered to act, speak for, or otherwise represent this corporation between meetings of the Board within the boundaries of policies and purposes established by the Board and as set forth in the Articles of Incorporation and these Bylaws. The Executive Director shall be responsible for keeping the Board informed at all times of staff performance as related to program objectives, and for implementing any personnel policies adopted by the Department. (b) Secretary. The secretary shall attend to the following: i. Book of Minutes. The secretary shall keep or cause to be kept, at the principal office, or such other place as the Board may direct, a book of minutes of all meetings and actions of Directors, with the time and place of holding, whether, annual regular or special, 8 and, if special, how authorized, the notice given, the names of those present at such meetings, and the proceedings of such meetings. ii. Notices, Seal and other Duties. The Secretary shall give, or cause to be given, notice of all meetings of the Board required by the Bylaws to be given. The Secretary shall keep the seal of the corporation in safe custody. The secretary shall have such other powers and perform other duties as prescribed by the Board, the Executive Director, Chief of Police or these Bylaws. (c) Treasurer. The Treasurer shall attend to the following: i. Books of Account. The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and other matters customarily included in financial statements. The books of account shall be open to inspection by any Director, the Executive Director and Chief of Police at all reasonable times. The Treasurer shall provide a financial report at each Board of Directors meeting. ii. Deposit and disbursement of money and valuables. The Treasurer shall deposit all money and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board and Executive Director; 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 of his transactions as Treasurer of the financial condition of the corporation; and shall have other powers and perform such other duties as may be prescribed by the Board, the Executive Director, Chief of Police or these Bylaws. iii. Bond. If required by the Board or the Executive Director, the Treasurer shall give this corporation a bond in the amount and with the surety specified by the Board for the faithful performance of the duties of his or her office and for restoration to the corporation of all its books, papers, vouchers, money, and other property of every kind in his or her possession or under his or her control on his or her death, resignation, retirement, or removal from office. ARTICLE VII. TRANSACTIONS IN WHICH DIRECTORS HAVE MATERIAL FINANCIAL INTEREST Section 1. PROHIBITION AGAINST SELF-DEALING 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 VII. For purposes of this Article VII, a “self-dealing transaction” 9 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 VII, such a Director is referred to as an “interested Director.” This section shall not be construed to prohibit (a) transaction which is part of a 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). Section 2. PERMITTED SELF-DEALING TRANSACTIONS. The corporation shall be authorized to engage in a self-dealing transaction if: (a) The California Attorney General or the court in an action in which the California Attorney General is an indispensable party, has approved the transaction before or after it was consummated; or (b) The following facts are established: i. The corporation entered into the transaction for its own benefit; ii. The transaction was fair and reasonable as to the corporation at the time the corporation entered into the transaction; iii. 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 Directors then in office without counting the vote of the interested Director or Directors, and with knowledge of the material facts concerning the transaction and the Director’s interest in the transaction. Except as provided in paragraph (c) of this Section 2, action by the Executive Director shall not satisfy this paragraph; and iv. (A) Prior to authorizing or approving the transaction, the Board considered and in good faith determined after reasonable investigation under the circumstances that the corporation could not have obtained a more advantageous arrangement with reasonable effort under the circumstances; or (B) The corporation in fact could not obtained a more advantageous arrangement reasonable effort under the circumstances; or (c) The following facts are established: i. The Executive Director or other person authorized by the Board approved the transaction in a manner consistent with the standards set forth in paragraph (b) of this Section 2; 10 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 (ii) of this paragraph were satisfied, ratified the transaction at its next meeting by a vote of the majority of the Directors then in office without counting the vote of the interested Director or Directors. Section 3. PROHIBITED LOANS AND GUARANTEES. This corporation shall not make any loan of money or property to or guarantee the obligation of any Director or Officer, unless approved by the Attorney General of the State of California; provided, however, that this corporation may advance money to a Director or Officer for expenses reasonably anticipated to be incurred in the performance of the duties of such Director or Officer, provided that in the absence of such advance such Director or Officer would be entitled to be reimbursed for such expenses by the corporation. ARTICLE VIII. REPORTS, RECORDS AND RIGHTS OF INSPECTION Section 1. MAINTENANCE OF ARTICLES AND BYLAWS. This corporation shall keep at its principal executive office the original or a copy of its Articles of Incorporation and these Bylaws as amended to date. Section 2. MAINTENANCE OF OTHER CORPORATE RECORDS. The account, books, records, and minutes of the proceedings of the Board shall be kept at such place or placed designated by the Board or the Executive Director, or, in the absence of such designation, at the principal executive office of this corporation. The minutes and records shall be kept in either written or typed form or in any other form capable of being converted into written, typed, or printed form. Section 3. INSPECTION BY DIRECTORS. Every Director shall have the absolute right to any reasonable time to inspect all books, records, and documents of every kind, and the physical properties of this corporation and each of its subsidiary corporations. This inspection by a Director may be made in person or by an agent or attorney, and the right of inspection includes the right to copy and make extracts of documents. Section 4. ANNUAL REPORT. Within one hundred and twenty days (120) days after the close of the corporation’s fiscal year, which shall commence on July 1 of each calendar year and end on June 30 of the following year, the Executive Director shall furnish or cause to be furnished a written report to all Directors containing, in appropriate detail, all of the following information: (a) The assets and liabilities, including the trust funds, of the corporation as of the end of the fiscal year; 11 (b) The principal changes in assets and liabilities, including trust funds, during the fiscal year; (c) The revenue or receipts of the corporation, both unrestricted and restricted to particular purposes, for the fiscal year; (d) The expenses or disbursements of the corporation, for both general and restricted purposes, during the fiscal year; (e) Any information required by Section 6322 of the California Nonprofit Public Benefit Corporation Law (pertaining to certain transactions and indemnifications involving interested persons); and (f) A narrative description of the corporation’s principal activities during the fiscal year. Section 2. RECORDS AND RIGHTS OF INSPECTION. The corporation shall keep adequate and correct books and records of account and minutes of the proceedings of its 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. Section 3. FINANCIAL AUDIT. This corporation shall obtain a financial audit for every tax year in which it receives or accrues gross revenue of Five Hundred Thousand Dollars ($500,000) or more, excluding grant or contract income from any governmental entity for which the governmental entity requires an accounting. Any audited financial statements obtained by this corporation, whether or not required by law, shall be made available for inspection by the Attorney General and by the general public within nine (9) months after the close of the fiscal year to which the statements relate. For three (3) years, such statements (a) shall be available at this corporations principal, branch, and subordinate offices during regular business hours and (b) shall be made available either by mailing a copy to any person who so requests in person or in writing, or by posting them on this corporation’s website. ARTICLE IX. INDEMNIFICATION Section 1. STATUTORY INDEMNITY. This incorporation may indemnify any person who was or is a party, or is threatened to be made a party, to any action or proceeding by reason of the fact that such person is or was an Officer, Director, or agent of this corporation, or is or was serving at the request of this corporation as a Director, Officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, or other enterprise, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with such proceeding, to the fullest extent permitted under the California Nonprofit Corporation Law. In determining whether indemnification is available to the Director, Officer, or agent of this corporation under California law, the determination as to whether the applicable 12 standard of conduct set forth in Corporations Code section 5238 has been met shall be made by a majority vote of a quorum of Directors who are not parties to the proceeding. If the number of Directors who are not parties to the proceeding is less than two-thirds of the total number of Directors seated at the time the determination is to be made, the determination as to whether the applicable standard of conduct has been met shall be made by the court in which the proceeding is or was pending. The indemnification provided herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be an agent and shall inure to the benefits of the heirs, executors and administrators of such person. Section 2. NONAPPLICABILITY OF FIDUCIARIES OF EMPLOYEE BENEFIT PLANS. This Article IX does not apply to any proceedings 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 corporation as defined in Section 1 of this Article IX. 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 California General Corporation Law. Section 3. INSURANCE. This corporation shall have the power and shall use its best efforts to purchase and maintain insurance on behalf of any Director, Officer or agent in any such capacity or arising out of the Director’s, Officer’s, or agent’s status as such, whether or not the corporation would have the power to indemnify the agent against such liability under Section 1 of this Article IX; provided, however, that the corporation shall have no power to purchase and maintain such insurance to indemnify any Director, Officer, or agent of the corporation for any self-dealing transaction, as described in California Corporations Code section 5233. ARTICLE X. OTHER PROVISIONS Section 1. MEMBERS. This corporation shall not have voting members within the meaning of the California Nonprofit Corporation Law. The Board may admit nonvoting members of one or more classes having such rights and obligations as the Board shall deem appropriate from time to time. Section 2. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise requires, the general provisions, rules of construction, and definitions contained in the California Nonprofit Corporation Law shall govern the construction of these Bylaws. Without limiting the generality of the foregoing, the masculine gender includes the feminine and neuter, the singular number includes the plural, and the plural number includes the singular. Section 3. NOTICING ELECTRONIC TRANSMISSION. (a) Noticing. For purposes of these Bylaws, notice shall be deemed given: (a) at the time written notice, including facsimile, electronic mail message, or other 13 digital notification 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; or (b) at the time any oral notice is communicated, in person or by telephone, including a voice messaging system, 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 recipient. (b) Electronic Transmission. Subject to applicable law, and any guidelines and Procedures that the Board and Administrator may adopt from time to time, the terms “written” and “in writing” as used in these Bylaws include any form of recorded message in the English language capable of comprehension by ordinary visual means and may include electronic transmissions, such as facsimile or email, provided (i) for electronic transmissions from this corporation, the corporation has obtained an unrevoked written consent from the recipient to the use of such means of communication; (ii) for electronic transmissions to the corporation, the corporation has in effect reasonable measures to verify that the sender is the individual purporting to have sent such transmission; and (iii) the transmission creates a record that can be retained, retrieved, reviewed, and rendered into clearly legible tangible form. Section 4. AMENDMENTS. These Bylaws may be adopted or repealed by approval of the Board effective only upon the written notification to the Corporation by the Santa Monica City Clerk after approval by the Santa Monica City Council. These Bylaws may be amended by approval of the Board and Chief of Police. The City Council of the City of Santa Monica shall have the right to review and approve these Bylaws five (5) years after the effective date of these Bylaws and every ten (10) years thereafter. CERTIFICATE OF SECRETARY I, the undersigned, the duly elected Secretary of Friends of the Santa Animal Shelter, a California nonprofit public benefit corporation, do hereby certify: That the foregoing Bylaws consisting of __ pages were adopted as the Bylaws of the corporation by the Board of Directors of the corporation on _________, 2015, and the same do now constitute the Bylaws of said corporation. IN WITNESS WHEREOF, I have hereunto subscribed my name this _________, 2015. By:__________________ Date:________________ 14