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BYLAWS of  NAMI of PENNSYLVANIA, BUCKS COUNTY CHAPTER

 

 

Article I – ORGANIZATION NAME

 

1.1       The name of this organization shall be the National Alliance on Mental Illness of Pennsylvania, Bucks County Chapter, formerly known as the Bucks County Chapter, National Alliance for The Mentally III (NAMI) of Pennsylvania, hereinafter referred to as the “Chapter”; said chapter being an affiliate of the National Alliance on Mental Illness (NAMI) of Pennsylvania, hereinafter referred to as NAMI of PA.

 

Article 2 – MISSION

 

2.1       The Chapter shall have unlimited powers (subject to the provisions of Paragraph 2.4) to engage in any activity consistent with its nonprofit status under the laws governing it as an affiliate of NAMI of Penna. as amended.

 

2.2       The Chapter shall engage in any activity (subject to the provisions of Paragraph 2.4) that is consistent with its mission such as:

 

 

  1. Providing support, education and advocacy for persons with mental illness and their families.

 

  1. Promoting better quality of care, rights and interests of citizens with mental illness, particularly of those who cannot speak for themselves, and to advocate policies at the local, state and national levels to accomplish these objectives.

 

  1. Helping families and friends of persons with mental illness by providing emotional support, education and information.

 

2.3       The Chapter accepts and embraces the purposes of the National Alliance on Mental Illness (NAMI) and NAMI Pennsylvania (subject to the provisions of Paragraph 2.4).

 

2.4       Paragraph 2.1, 2.2, and 2.3 are expressly limited in scope by the provisions of section 501(c) (3) of the Internal Revenue Code, or corresponding section of any future federal tax code.

 

Article 3 – MEMBERSHIP

 

3.1       Membership shall be open to all persons interested in and in agreement with the purposes and programs of the Chapter.

 

3.2       The Board shall identify the categories of membership.

 

3.3       No individual accepted as a Chapter member shall discriminate against any other individual

 

or group of individuals on the basis of race, color, religion, sex, age, national origin, sexual orientation or disability, whether acting in connection with Chapter activities or otherwise. Any such discrimination may be cause for loss of membership.

 

3.4       All prospective members and members shall be required to pay annual dues unless determined otherwise by the Board of Directors (Board). The Board shall set the amount of annual dues.

 

3.5       The Board, by an affirmative vote of two-thirds (2/3), may suspend or expel members for cause after appropriate notification and, if requested, a hearing with the Board.

 

3.6       Members in default of dues shall be notified of the delinquency and, at the discretion of the Board, may have their membership terminated.

 

3.7       Chapter membership is not transferable.

 

Article 4 – MEMBER MEETINGS

 

4.1       Subject to the discretion of the Board of Directors, regular meetings of the members shall be held on the third Thursday of every other month at the Chapter’s principal meeting location unless the number of meetings, venue and/or date is changed by the Board.

 

4.2       An Annual Meeting of the Chapter shall be held at the regular April meeting of the members unless the date is changed by the Board. The Annual Meeting agenda shall be published and made available to members at the monthly meeting immediately preceding the Annual Meeting and shall include information about Board-election candidates and other business topics to be brought before the members. When appropriate, the requirement for The Annual Meeting agenda may be satisfied by its inclusion in the Chapter newsletter. If the annual date of said meeting is changed by the Board of Directors, notice of said meeting shall be given by publishing in the chapter newsletter.

 

4.3       Special meetings of the members may be called at any time upon the written request of the President or Board, or by written petition of 10% of the Chapter membership. The Secretary

shall fix the time for the meeting, which shall be held within one month of the date of the request or receipt of a valid petition. Business discussed at the special meeting shall be

 

confined to the purposes stated in the meeting request or petition.

 

4.4       Before conducting special meetings or voting on special issues at regular meetings, a special-meeting notice shall be given to all members eligible to vote. The requirement for a special-meeting notice may be satisfied by its inclusion in the Chapter newsletter.

 

4.5       The presence of 10% of the membership or 12 members entitled to vote, whichever the fewer, shall constitute a quorum. A quorum is required for the entire meeting.

 

4.6       Individual members of the Chapter in good standing shall be entitled to one vote; family members in good standing, a maximum of two (2) votes. Memberships listed in the name of organizations shall have no voting privileges.

 

4.7       Voting may be by written ballot, show of hands, or voice, whichever is stipulated by the presiding officer or the Board.

 

 

Article 5 – BOARD OF DIRECTORS

 

5.1       The Board shall have the exclusive responsibility to manage and direct the Chapter in all matters, shall evaluate Chapter functions continually, and shall make changes when appropriate to ensure that Chapter purposes are being served fully.

 

5.2       Members of the Board shall be at least 21 years of age, be elected from the body of members in good standing, and comprise no less than seven (7) Directors (President, Vice President, Secretary, Treasurer, and at least three (3) additional Directors which may include the Immediate Past President). The total number of Directors shall not exceed twenty (20).

 

5.3       Directors shall be elected for a three-year (3) term by Chapter members at the Annual meeting and shall assume their duties on the first day of the month following their election.

 

5.4       At least two thirds of the Board shall consist of family members (close relatives, or legal

 

guardians of persons who have or have had a serious brain disorder).

 

5.5       The Board shall conduct no fewer than six meetings within each calendar year.  Such meetings shall be held on the third Thursday of the month at the Chapter’s principal meeting location unless the Board or President changes the date and/or venue. Special Board meetings shall be held only upon a call by the President or a majority of the Board. All Board meetings shall be held no sooner then seven (7) days after notice of such meetings unless the selected date is acceptable to 100% of the Board. Said notice may be given by electronic communication. Special meeting Agenda items may be voted upon by A quorum of the Board via electronic means conducted by and recorded and documented by the Secretary.

 

5.6       A majority of the Board in office shall constitute a quorum for any meeting. Unless stated otherwise in these bylaws, the majority of those composing the quorum shall have the power to act on behalf of the Board on all matters if the quorum remains intact when voting on issues. Any or all of those composing the quorum may participate in Board meetings by appropriate electronic means.

 

5.7       In addition to the powers and authorities expressly conferred on them by these bylaws, the Board may exercise all such powers and do all such lawful acts consistent with the purpose of the Chapter.

 

5.8       All Board meetings shall be open to Chapter members in good standing.

 

5.9       A Director may be removed from office by a two-thirds (2/3) vote of the Board whenever the Board judges that such a removal will serve the best interests of the Chapter. Three (3) unexcused absences from Board meetings over any twelve (12) month period may be used as cause for removal from office.

 

5.10     No Director shall be personally liable for monetary damages stemming from any action taken or not taken unless the Director has breached or failed to perform the duties of that Director’s office under Section 8363 of the Director’s Liability Act (relating to standard of care and justifiable reliance), and the breach or failure to perform constitutes self-dealing, willful misconduct, or recklessness. The provision of this section shall not apply to the responsibility or liability of a Director pursuant to any criminal statute, or the liability of a Director for the payment of taxes pursuant to local, State, or Federal Law.

 

5.11     No Director shall receive remuneration from the Chapter or from contracts executed by the

Chapter or NAMI Pennsylvania except for reimbursements for expenses approved by the Board.

 

 

  • All Directors, either with respect to Chapter activities or otherwise, shall conduct themselves in accordance with the highest standards of behavior at all times and shall in no way participate in activities that are construed as, or that convey the appearance of, conflict of interest.
  • A director of the corporation shall stand in a fiduciary relation to the corporation and shall perform his/her duties as a director, including his/her duties as a member of any committee of the board upon which he/she may serve, in good faith, in a manner he/she reasonably believes to be in the best interests of the corporation, and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances. In performing his/her duties, a director shall be entitled to rely in good faith on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared by any of the following:

(1)         One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented.

(2)         Counsel, public accountants or other persons as to matters which the director reasonably believes to be within the professional or expert competence of such person.

(3)        A committee of the board upon which he/she does not serve, duly designated in accordance with law, as to matters within its designated authority, which the director reasonably believes to merit confidence.

A director shall not be considered to be acting in good faith if he/she has knowledge concerning the matter in question that would cause his/her reliance to be unwarranted.

In discharging the duties of their respective positions, the Board of Directors, committees of the Board and individual directors may, in considering the best interests of the corporation, consider the effects of any action upon employees, upon suppliers and customers of the corporation and upon communities in which offices or other establishments of the corporation are located, and all other pertinent factors.  The consideration of those factors shall not constitute a violation of this section.

 

Absent breach of fiduciary duty, lack of good faith or self-dealing, actions taken as a director or any failure to take any action shall be presumed to be in the best interests of the corporation.

A director of the corporation shall not be personally liable for monetary damages as such for any action taken, or any failure to take any action, unless:

(1)        The director has breached or failed to perform the duties of his/her office under this section.

(2)        The breach or failure to perform constitutes self-dealing, willful misconduct or recklessness.

The provisions of this section shall not apply to:

(1)        The responsibility or liability of a director pursuant to any criminal statute; or

(2)       The liability of a director for the payment of taxes pursuant to local, State or Federal law.

5.14    Disclosure

  1. Any Director who, in the opinion of the Board, has a financial interest in

his/her vote on any matter before the Board, either directly or indirectly to him/herself or his/her employer, may be precluded from voting thereon in accordance with the procedures set forth in Article 14.

  1. Any director whose family member is an individual receiving the services/support of the Corporation and who will directly or indirectly benefits from the Director’s vote on any matter before the Board, may be precluded from voting thereon in accordance with the procedures set forth in Article 14.
  2. Any Director who is also a director or staff member of, or routinely receiving compensation from, a provider, funding source, monitoring group, evaluation entity or similar Behavioral Health/Mental Retardation agency, may be precluded from Board or Committee voting in areas directly or indirectly related to such affiliation in accordance with the procedures set forth in Article 14.

 

5.15      Disclosure of Criminal Conduct

 

  1. Prior to his/her election to the Board, an individual must disclose whether he/she was ever convicted (whether the conviction results from a plea or otherwise) of an offense designated a felony or misdemeanor, or was the subject of an indicated or founded report of child abuse.
  2. If a Director is arrested or convicted (whether the conviction results from a plea or otherwise) of an offense designated a felony or misdemeanor, or is the subject of an indicated or founded report of child abuse, he/she must disclose the date and nature of the arrest or conviction or child abuse report to the Board, meeting in closed session, no later than the next Board meeting following such arrest, conviction or report.
  3. The failure of a Director to make disclosure to the Board in accordance with paragraph A or B, unless the failure to do so is for good cause, may subject the Director to removal from the Board or other appropriate disciplinary action.
  4. Upon disclosure by the Director as required by paragraph B, the Board must determine whether cause exists to take appropriate disciplinary action against the Director. The Director will be presented with an opportunity to explain his/her conduct, and may present any evidence on his/her behalf.  The director shall then leave the meeting, and the remaining Board will consider, among other factors: (a) the nature of the offense; (b) the nature of the Director’s position; (c) the interests of the individuals receiving NAMI of Bucks County’s services/support and their families; (d) NAMI of Bucks County’s interest; (e) the Director’s explanation and any relevant evidence in support thereof; (f) the Director’s conduct; and (g) any other relevant factors.

 

  1. After considering the factors set forth in paragraph D, the remaining Board shall constitute a quorum and decide, by a majority vote, whether the Director’s conduct requires Board disciplinary action. If disciplinary action is warranted, the Board may remove the Director or take any other appropriate disciplinary action.

 

Article 6 – OFFICERS

 

6.1       Officers of the Chapter shall be Chapter members in good standing and, except for the Immediate Past President, shall be elected from and by the Board for a term of two (2) years. Officers are nominated by a three-member Nominating Committee appointed by the president and including at least one member who is a past president of the affiliate, if he/she desires to serve. After securing the consent of the nominees to serve if elected, the Nominating Committee prepares a slate of candidates for election as officers. Officer Nominations are permitted from the floor provided the candidate is a member in good standing and has agreed to serve if elected. The Officers shall include a President, Vice President, Secretary, Treasurer, Immediate Past President (if he/she desires to serve), and such other officers and assistant officers as may be required. Officers shall be elected at the first meeting of the Board following the election of Board members and shall assume their positions immediately upon election. The Officers shall have such authority and perform such duties as provided by these bylaws and as prescribed by the President. When Board members entering the third year of their three-year term are elected Officers, their terms of office shall be extended by one year to enable them to serve the full two-year term of an Officer.

 

6.2       Any Officer may be removed from office by a two-thirds (2/3) vote of the Board whenever the Board judges that such a removal will serve the best interests of the Chapter.

 

6.3       The President shall serve as the chief executive officer of the Chapter, preside at all membership and Board meetings, supervise and manage all Chapter affairs, and ensure that all orders and resolutions of the Board are satisfied. The President shall also serve as an ex-officio member of all committees and shall have the general power and duties of supervision and management usually vested in the office of a President. The Board, at its discretion, may overrule any actions of the President.

 

6.4       The Vice-President shall serve on behalf of the President in the absence or incapacity of the President.

 

6.5       The Secretary shall attend all Board and membership meetings and act as the clerk thereof, recording all votes and maintaining accurate meeting minutes. The Secretary shall give notice of all membership and Board meetings and shall perform other duties as prescribed by the President or Board.

 

6.6       The Treasurer shall have custody of the Chapter’s funds and other monetary assets, keep full

and accurate accounts of receipts and disbursements, and deposit Chapter monies in insured,

 

Board-approved accounts registered in the Chapter’s name. The Treasurer shall disburse Chapter funds only upon Board authorization, taking proper vouchers for such disbursements. The Treasurer shall submit a written report showing the Chapter’s net worth and all transactions since the last report at each regular meeting of the Board (except when excused by the President) or when so requested by the Board.

 

Article 7 – VACANCIES

 

7.1       If a Director leaves the Board for any reason, the Board may fill this position by the vote of a quorum of the remaining members of the Board. A member so elected shall serve until a successor is elected by the membership at the next annual meeting or at a special membership meeting called for such purpose.

 

7.2       If an Officer leaves a Board office for any reason, the Board shall elect a successor to complete the unexpired term.

 

Article 8 – COMMITTEES

 

8.1       The President shall create Standing and Ad Hoc Committees, appoint committee members, and authorize all powers and expenses for the conduct of committee business. The Board shall oversee all committee activities and approve all committee recommendations before implementation.  All committee members shall serve at the discretion of the Board.

 

8.2       Chairperson of standing committees shall be appointed by the President.

 

8.3       Committees may include, but not be limited to, the following:

 

  1. Support Services
  2. Education Services
  3. Membership Services
  4. Public Policy
  5. Community/Media Relations
  6. Nominating
  7. Finance

 

 

 

8.5       Membership of each committee shall include at least one member of the Board as its liaison with the Board.

 

 

Article 9 – STAFFING

 

9.1       The Chapter, by a two-thirds (2/3) vote of the Board, may hire full- or part-time employees and consultants to perform activities on behalf of the Chapter. Before each hiring, the President shall appoint a Search Committee to develop a job description, identify and interview candidates, assess candidate credentials and capabilities, and prepare a written report summarizing recommendations.  As part of its initial activities, the Committee shall also inform the membership about the Chapter’s hiring need and make the job description(s) available to them.

 

9.2       An Executive Director may be employed by the Board of Directors and shall have general direction of and supervision over the day-to-day affairs of the Chapter, exercising such authority and performing such duties that the Board,

 

from time to time, may assign. When so directed by the President, the Executive Director shall serve in place of the Search Committee when hiring additional staff.

 

9.3       The Board shall review and evaluate the performance of Chapter employees or consultants at least once during each calendar year.

 

9.4       With respect to practices such as recruitment, hiring, evaluation, promotion, transfer, discipline, discharge, termination, and compensation, the Chapter shall conduct its employment practices in full accord with equal employment opportunity laws.

 

Article 10 – COMMUNICATIONS

 

10.1     No member shall speak on behalf of the Chapter, NAMI, or NAMI Pennsylvania unless authorized to do so explicitly by the Board. In the event of any such unauthorized situation, the Board shall advise the member in writing to refrain from such practice. If such practice continues, the Board may elect to suspend or expel the member after appropriate notification and, if requested, a hearing.

 

10.2     Members shall use discretion when making public statements about mental illness topics, recognizing that all such communications could be construed as representing NAMI’s official position. When making public statements, therefore, all members shall accept the responsibility that their statements conform fully with the aims and purposes of the Chapter and NAMI and shall be held accountable to the Board accordingly.

 

Article 11 – FISCAL ADMINISTRATION

 

11.1     The Chapter’s fiscal year shall be the calendar year.

 

11.2     All Chapter members in good standing, because of the Chapter’s status as a charter member of NAMI and NAMI Pennsylvania, shall be members of NAMI and NAMI of Pennsylvania and a prorated portion of each member’s dues shall be paid to NAMI and NAMI Pennsylvania by the Chapter.

 

11.3     Any decisions related to real estate matters shall require a two-thirds (2/3) vote of the entire Board.

 

11.4     Whenever the lawful activities of the Chapter involve the charging of fees or prices for its services or products, it shall have the right to receive such income. All net income derived

 

from these activities shall be applied to the maintenance and operation of the Chapter’s lawful activities and, in no case, shall be divided or distributed in any manner whatsoever among the members, directors, or officers.

 

11.5     At the close of each fiscal year, the books and transactions of the Chapter may be audited by a committee appointed by the President or the Board.

 

Article 12 – DISSOLUTION

 

12.1     Dissolution of the Chapter shall be by a two-thirds (2/3) vote of the membership attending a meeting called for such purpose.

 

12.2     All liabilities and obligations shall be paid, satisfied, and discharged.

 

12.3     Any remaining assets shall be transferred to a Section 501(c)3 nonprofit organization designated by the Board.

 

12.4     In no event shall Chapter assets in any form be distributed to any member.

 

 

Article 13 – BYLAWS AMENDMENTS

 

13.1     Amendments to the bylaws shall be by majority vote of the members attending any regular or special meeting duly convened for this purpose after due notice and availability of copies of the existing bylaws and the proposed changes. Due notice is defined as member notification at least one calendar month prior to the scheduled voting; availability of copies is defined as copies being available for members (1) at the regular monthly meeting held one calendar month prior to the scheduled vote and (2) thereafter at the Chapter’s principal office during regular office hours up to the time of voting. Obtaining copies shall be the responsibility of the members.

 

13.2     Members may propose changes to the bylaws by submitting them in writing to the Board for review and approval. The Board shall return its assessment and approval or rejection of such proposed changes no later than two months after the first regular Board meeting following receipt of the proposed changes.

 

Article 14 – CONFLICTS OF INTEREST – PROCEDURE

 

14.1.                Purpose

The purpose of this conflicts of interest procedure is to protect the Corporation’s interest when it is contemplating business, or a transaction or arrangement that might benefit the financial or private interest of an Officer or Director of the Board.  This policy is intended to supplement but not replace any applicable state laws governing conflicts of interest applicable to nonprofit and charitable corporations.

 

14.2.                Definitions

  1. Interested Person

Any Director, principal officer, or member of a committee with Board‑delegated powers who has a direct or indirect financial or private interest, as defined below, is an interested person.

 

  1. Financial Interest

A person has a financial interest if the person has, directly or indirectly, through business, investment, or family:

(i)  an ownership or investment interest in any entity with which the Corporation has a transaction or arrangement; or

(ii)  a compensation arrangement with the Corporation or with any entity or I         ndividual with which the Corporation has a transaction or arrangement; or

(iii)  a potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Corporation is negotiating a transaction or arrangement.  Compensation includes direct and indirect remuneration as well as gifts or favors that are substantial in nature.

 

A person also has a financial interest if his/her employer will receive a direct or indirect benefit from the proposed business, transaction or arrangement.

  1. Private Interest

A person has a private interest if the person:

(i)  is also a director or staff member of, or receiving a salary from, a provider, funding source, monitoring group, evaluation entity or similar Behavioral Health/Mental Retardation agency; or

(ii)  has a family member who is an individual receiving the services/support of the Corporation and who will directly or indirectly benefit from his/her vote on any matter before the Board or a committee thereof.

A financial or private interest is not necessarily a conflict of interest.  Under Section 3B of this Article, a person who has an interest may have a conflict of interest only if the Board decides that a conflict of interest exists.

Notwithstanding any provision of these Bylaws to the contrary, the Board, in accordance with the procedure set forth herein, may determine that any other interest in proposed business or a transaction or arrangement not specifically defined by this Article constitutes a conflict of interest.

14.3                 Procedures

  1. Duty to Disclose

 

In connection with any actual or possible conflict of interest, an interested person must disclose to the Board, meeting in closed session, the existence of his/her financial or private interest and must be given the opportunity to disclose all material facts to the Board considering the proposed business, transaction or arrangement.

An interested person may make a presentation to the Board, but after such presentation, he/she shall leave the meeting during the discussion of, and the vote on, the business, transaction or arrangement that results in the conflict of interest.

 

  1. Determining Whether a Conflict of Interest Exists

After disclosure of the financial or private interest and all material facts, and after any discussion with the interested person, he/she shall leave the meeting while the determination of a conflict of interest is discussed and voted upon by the Board in closed session.  The remaining Board shall constitute a quorum and shall decide, by a majority vote, if a conflict of interest exists.  The vote of the Board shall be recorded in open session.

 

  1. Procedures for Addressing the Conflict of Interest

(i)         If the Board determines that a financial or private conflict of interest exists, the interested person shall be disqualified from voting on all matters related to the business, transaction or arrangement which gave rise to the conflict of interest.

(ii)        In the case of a financial interest only, in addition to disqualifying the interested person from voting, the Chairperson of the Board shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.

(a)        After exercising due diligence, the Board shall determine whether the Corporation can reasonably obtain a more advantageous alternative to the transaction or arrangement that would not give rise to a financial conflict of interest.

 

(b)        If a more advantageous alternative is not reasonably attainable under circumstances that would not give rise to a financial conflict of interest, the Board shall determine by a majority vote of the disinterested Directors whether the business, transaction or arrangement is in the Corporation’s best interest and for its own benefit and whether it is fair and reasonable to the Corporation and shall make its decision as to whether to conduct said business or enter into the transaction or arrangement in conformity with such determination.

  1. Violations of the Conflicts of Interest Policy

If the Board has reasonable cause to believe that a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose.

If, after hearing the response of the member and making such further investigation as may be warranted in the circumstances, the Board determines that the Director has failed to disclose a financial or private interest, without full disclosure of his/her interest therein, he/she has violated his/her public trust and may be removed from the Board.

 

14.4                 Record of Proceedings

The minutes of the Board shall contain:

 

(A)       the names of the persons who disclosed or otherwise were found to have a financial or private interest in connection with an actual or possible conflict of interest, any action taken to determine whether a conflict of interest was present, and the Board’s decision as to whether a conflict of interest in fact existed;

 

(B)       the names of the persons who were present for discussions and the final numerical vote relating to the business, transaction or arrangement; and

 

 

(C)       for financial conflicts of interest only, the content of the discussion, including any alternatives to the proposed business, transaction or arrangement, and a record of any votes taken in connection therewith.

 

14.5.                Statement of Compliance

Each Director of the Board shall sign a statement upon election as a Director which affirms that such person:

(A)  has received a copy of this conflicts of interest policy;

(B)  has read and understands the policy;

(C)  has agreed to comply with the policy; and

(D)  understands that the Corporation is a charitable organization and that in order to maintain its federal tax exemption it must engage primarily in activities that accomplish one or more of its tax‑exempt purposes.

 

14.6.                Periodic Reviews

To ensure that the Corporation operates in a manner consistent with its charitable purposes and that it does not engage in activities that could jeopardize its status as an organization exempt from federal income tax, periodic reviews shall be conducted. The periodic reviews shall, at a minimum, include the following subjects:

(A)  whether compensation arrangements and benefits are reasonable and are the result of arm’s‑length bargaining;

(B)  whether partnership and joint venture arrangements conform to written policies, are properly recorded, reflect reasonable payments for goods and services, further the Corporation’s charitable purposes and do not result in inurement or impermissible private benefit; and

 

(C)  whether agreements to provide health care and agreements with other health care providers, employees, and third party payers further the Corporation’s charitable purposes and do not result in inurement or impermissible private benefit.

 

Section 7:        Use of Outside Experts

In conducting the periodic reviews provided for in Section 6, the Corporation may, but need not, use outside advisors. If outside experts are used their use shall not relieve the Board of its responsibility for ensuring that periodic reviews are conducted.

 

 

ARTICLE 15 – PERSONAL LIABILITY OF DIRECTORS

 

15.1       A Director of this Corporation shall not be personally liable for monetary damages as such for any action taken, or any failure to take any action, unless:

(A) The Director has breached or failed to perform the duties of his/her office under the standards specified in subchapter B of Chapter 57, Title 15 of the Pennsylvania Consolidated Statutes;  and

(B) The breach or failure to perform constitutes self-dealing, willful misconduct or recklessness.

The forgoing limitation of liability shall be retroactive to the fullest extent permitted by Law.

 

15.2.    Exception

This exemption from liability shall not apply to:

  1. The responsibility or liability of a Director pursuant to any criminal statute;
  2. The liability of a Director for the payment of taxes pursuant to local, state or federal law; or

 

If the Pennsylvania Consolidated Statutes are hereafter amended to authorize the further elimination or limitation of the liability of Directors, then the liability of a Director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended Pennsylvania Consolidated Statutes.  Any repeal or modification of this section shall be prospective only, and shall not adversely affect any limitation on the personal liability of a Director of the Corporation existing at the time of such repeal or modification.

 

 

ARTICLE 16 – INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER AUTHORIZED REPRESENTATIVES

 

16.1.    Scope of Indemnification.

(A)         General rule.  The corporation shall indemnify an indemnified representative against any liability incurred in connection with any proceeding in which the indemnified representative may be involved as a party or otherwise by reason of the fact that such person is or was serving in an indemnified capacity, including, without limitation, liabilities resulting from any actual or alleged breach or neglect of duty, error, misstatement or misleading statement, negligence, gross negligence or act giving rise to strict or products liability, except:

  1. Where such indemnification is expressly prohibited by applicable law;
  2. Where the conduct of the indemnified representative has been finally determined pursuant to Article XI or otherwise

 

(i)         To constitute willful misconduct or recklessness within the meaning of 15 Pa.C.S. § 513 (b) and 1746 (b) and 42 Pa.C.S. § 8365 (b) or any superseding provision of law sufficient in the circumstances to bar indemnification against liabilities arising from the conduct; or

(ii)         To be based upon or attributable to the receipt by the indemnified representative from the corporation of a personal benefit to which the indemnified representative is not legally entitled; or

  1. To the extent such indemnification has been finally determined in a final adjudication pursuit to Article XVI to be otherwise unlawful.

(B)        Partial payment.  If an indemnified representative is entitled to indemnification in respect of a portion, but not all, of any liabilities to which such person may be subject, the corporation shall indemnify such indemnified representative to the maximum extent for such portion of the liabilities.

(C)        Presumption.  The termination of a proceeding by judgement, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the indemnified representative is not entitled to indemnification.

(D)        Definitions.  For purposes of this Article:

(1)       “Indemnified capacity” means any and all past, present and future service by an indemnified representative in one or more capacities as a director, officer, employee or agents of the corporation, or, at the request of the corporation, as a director, officer, employee, agents, fiduciary or trustee of another corporation, partnership, joint venture, trust, employee benefit plan or other entity or enterprise;

  • “indemnified representative” means any and all directors and

 

officers of the corporation and any other person designated as an indemnified representative by the Board of Directors of the corporation (which may, but need not, include any person serving at the request of the corporation, as a director, officer, employee, agents, fiduciary or trustee of another corporation, partnership, joint venture, trust, employee benefit plan or other entity or enterprise);

  • “liability” means any damage, judgment, amount paid in

settlement, fine, penalty, punitive damages, excise tax assessed with respect to an employee benefit plan, or cost or expense, of any nature (including, without limitation, attorneys’ fees and disbursements); and

  • “proceeding” means any threatened, pending or completed action,

suit, appeal or other proceeding of any nature, whether civil, criminal, administrative or investigative, whether formal or informal, and whether brought by or in the right of the corporation, a class of its security holders or otherwise.

  1. Proceedings Initiated by Indemnified Representatives.

Notwithstanding any other provision of this Article, the corporation shall not indemnify under this Article an indemnified representative for any liability incurred in a proceeding initiated (which shall not be deemed to include counter-claims or affirmative defenses) or participated in as an intervener or amicus curiae by the person seeking indemnification unless such initiation of or participation in the proceeding is authorized, either before or after its commencement, by the affirmative vote of a majority of the directors in office.  This section does not apply to a reimbursement of expenses incurred in successfully prosecuting or defending an arbitration or otherwise successfully prosecuting or defending the rights of an indemnified representative granted by or pursuant to this Article.

  1. Advancing Expenses.

 

The corporation shall pay the expenses (including attorneys’ fees and disbursements) incurred in good faith by an indemnified representative in advance of the final disposition of a proceeding described in Article XVI or the initiation of or participation in which is authorized pursuant to Article XVI upon receipt of an undertaking by or on behalf of the indemnified representative to repay the amount if it is ultimately determined pursuant to Article XVI that such person is not entitled to be indemnified by the corporation pursuant to this Article.  The financial ability of an indemnified representative to repay an advance shall not be a prerequisite to the making of such advance.

  1. Securing of Indemnification Obligations.

To further effect, satisfy or secure the indemnification obligations provided herein or otherwise, the corporation may maintain insurance, obtain a letter of credit, act as self-insurer, create a reserve, trust, escrow, cash collateral or other fund or account, enter into indemnification agreements, pledge or grant a security interest in any assets or properties of the corporation, or use any other mechanism or arrangement whatsoever in such amounts, at such costs, and upon such other terms and conditions as the Board of Directors shall deem appropriate.  Absent fraud, the determination of the Board of Directors with respect to such amounts, costs, terms and conditions shall be conclusive against all security holders, officers and directors and shall not be subject to voidability.

  1. Payment fo Indemnification.

An indemnified representative shall be entitled to indemnification within 30 days after a written request for indemnification has been delivered to the secretary of the corporation.

 

  • General rule. Any dispute related to the right to indemnification, contribution or

advancement of expenses as provided under this Article, except with respect to indemnification for liabilities arising under the Securities Act of 1933 that the corporation has undertaken to submit to a court for adjudication, shall be decided only by arbitration in the metropolitan area in which the principal executive offices of the corporation are located a the time, in accordance with the commercial arbitration rules then in effect of the American Arbitration Association, before a panel of three arbitrators, one of whom shall be selected by the corporation, the second of whom shall be selected by the indemnified representative and third of whom shall be selected by the other two arbitrators.  In the absence of the American Arbitration Association, or if for any reason arbitration under the arbitration rules of the American Arbitration Association cannot be initiated, or if one of the parties fails or refuses to select an arbitrator or if the arbitrators selected by the corporation and the indemnified representative cannot agree on the selection of the third arbitrator within 30 days after such time as the corporation and the indemnified representative have each been notified of the selection of the other’s arbitrator, the necessary arbitrator or arbitrators shall be selected by the presiding judge of the court of general jurisdiction in such metropolitan area.

  • Burden of proof. The party or parties challenging the right of an indemnified representative to the benefits of this Article shall have the burden of proof.
  • The corporation shall reimburse an indemnified representative for the

expenses (including attorneys’ fees and disbursements) incurred in successfully prosecuting or defending such arbitration.

(d)         Effect.  Any award entered by the arbitrators shall be final, binding and

 

nonappealable and judgment may be entered thereon by any party in accordance with applicable law in any court of competent jurisdiction, except that the corporation shall be entitled to interpose as a defense in any such judicial enforcement proceeding any prior final judicial determination adverse to the indemnified representative under Articles XVI in a proceeding not directly involving indemnification under this Article.  This arbitration provision shall be specifically enforceable.

  1. Contribution.

If the indemnification provided for in this Article or otherwise is unavailable for any reason in respect of any liability or portion thereof, the corporation shall contribute to the liabilities to which the indemnified representative may be subject in such proportion as is appropriate to reflect the intent of this Article or otherwise.

  1. Mandatory Indemnification of Directors, Officers, Etc.

To the extent that an authorized representative of the corporation has been successful on the merits or otherwise in defense of any action or proceeding referred to in 15 Pa.C.S. 1741 or 1742 or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees and disbursements) actually and reasonably incurred by such person in connection therewith.

  1. Contract Rights, Amendment or Repeal.

All rights under this Article shall be deemed a contract between the corporation and the indemnified representative pursuant to which the corporation and each indemnified representative intend to be legally bound.  Any repeal, amendment or modification hereof shall be prospective only and shall not affect any rights or obligations then existing.

 

  1. Scope of Article.

The rights granted by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification, contribution or advancement of expenses may be entitled under any statute, agreement, vote of shareholders or disinterested directors or otherwise both as to action in an indemnified capacity and as to action in any other capacity.  The indemnification, contribution and advancement of expenses provided by or granted pursuant to this Article shall continue as to a person who has ceased to be an indemnified representative in respect of matters arising prior to such time, and shall inure to the benefit of the heirs, executors, administrators and personal representatives of such a person.

  1. Reliance of Provisions.

Each person who shall act as an indemnified representative of the corporation shall be deemed to be doing so in reliance upon the rights provided in this Article.

  1. Interpretation.

The provisions of this Article are intended to constitute bylaws authorized by 15 Pa.C.S.

  • 513 and 1746 and 42 Pa.C.S. § 8365.

 

 

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