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HomeMy WebLinkAbout027460 RES - 10/23/2007Page 1 of 2 RESOLUTION APPROVING FORMATION F CROSSTOWN COMMONS DEVEL PMENT CORPORATION AND APPROVING ITS ARTICLES OF INCORPORATION AND BYLAWS WHEREAS, an application in writing seeking the incorporation of a local government corporation under the provisions of the Subchapter D, Chapter 431, Texas Transportation Code, to be known as "Crosstown Commons Development Corporation" (the "Corporation"), has been filed with the City Council of the City of Corpus Christi, Texas (the "City"), by three individuals, each of whom is a citizen of the State of Texas, of the age of 18 years or more and residents of the City; NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. That the City Council of the City found and determined, and hereby finds and determines, that it is necessary and advisable that the Corporation be formed. SECTION 2. That the City Council of the City hereby approves the form of articles of incorporation proposed to be used in organizing the Corporation, a copy of which is attached hereto as "Exhibit A", and the form of bylaws proposed to be used by the Corporation, a copy of which is attached hereto as "Exhibit B", and hereby grants authority for the filing of the articles of incorporation of the Corporation with the Secretary of State of the State of Texas. SECTION 3. That it is hereby officially found and determined that said meeting was open to the public as required by law; and that public notice of the time, place, and purpose of said meeting was given as required by Chapter 551, Texas Government Code. SECTION 4. All resolutions and parts thereof in conflict herewith are hereby expressly repealed insofar as they conflict herewith. SECTION 5. That this Resolution shall take effect immed- tely from and after its adoption. ATTEST. CITY 0 RPUS CH'I Ti Armando Chapa Hen Garrett City Secretary Mayor APPROVED as to form: October 17, 2007 G' ry W. mith Assistant City Attorney For the City Attorney 027460 H:ILE -DIF \Sh redl ryS\ g ndal2o0711O-2 \ es- rosstown omr onsFormation.doo Page 2 of 2 Corpus Christi, Texas of Odic16- , 200 The above resolution was passed by the following vote: Henry Garrett Melody Cooper Larry Elizondo, Sr. Mike Hummel! Bill Kelly v Priscilla G. Leal John E. Marez Nelda Martinez Michael McCutchon NI 0 C) 2 7 4 6 0 H:1LEG-DI \Shared\ arys\a nda12OO \1O-23\Res-Crus town ommonsF rmation.do ARTICLES OF INCORPORATION OF CROSSTOWN COMMONS DEVELOPMENT CORPORATION ION We, the undersigned natural persons, each of whom is at least eighteen (18) years of age or more, and a resident and a qualified voter of the City ofCorpus Christi, Texas (the "City"and a citizen of the State of Texas, acting as incorporators of a corporation under the provisions of Subchapter D of Chapter 431, Texas Transportation Code (the "Act"), and Chapter 394, Vernon's Texas Codes Annotated, Texas Local Government Code (the "Local Government Code"), do hereby adopt the following Articles of incorporation for such corporation: ARTICLE 1 The name of the corporation is CROSSTOWN COMMONS DEVELOPMENT CORPORATION (the "Corporation"). . ARTICLE II The Corporation is a public non-profit corporation. ARTICLE III The period ofduration of the Corporation shall be perpetual. ARTICLE IV The Corporation is organized for the purpose of aiding, assisting, and acting on behalf of the City in the performance of its governmental functions to promote the common good and general welfare of the City, including, without limitation, the development of the approximately 220 -acre site within the City located generally at the northeast corner of the Crosstown Expressway and Holly Road (the "Crosstown Commons Project Site"), in furtherance of the promotion, development, encouragement and maintenance of employment, commerce, economic development and public infrastructure development in the Crosstown Commons Project Site. The Corporation is formed pursuant to the provisions of the Act as it now or may hereafter be amended, and Chapter 394, Texas Local Government Code, which authorizes the Corporation to assist and act on behalf of the City to accomplish any governmental purpose of the City and to engage in activities in the furtherance of the purposes for its creation. The Corporation shall have and exercise all of the rights, powers, privileges, authority, and functions given by the general laws of the State of Texas to non-profit corporations incorporated under the Act including, without limitation, the powers granted under the Texas Non -Profit Corporation Act, Article 1396-1.01 et se l., Vernon's Texas Civil Statutes. 1 Exhibit A The Corporation shall have all other powers of a like or different nature not prohibited by lav which are available to non-profit corporations in Texas and which are necessary or useful to enable the Corporation to perform the purposes for which it is created, including the power to issue bonds, notes or other obligations, and otherwise exercise its borrowing power to accomplish the purposes for which it was created. The Corporation is created as a local government corporation pursuant to the Act and shall be a governmental unit within the meaning of Subdivision (2), Section 101.001, Texas Civil Practice and Remedies Code. The operations of the Corporation are governmental and not proprietary functions for purposes of the Texas Tort Claims Act, Section 101.001 et seq., Texas Civil Practice and Remedies Code. The Corporation shall have the power to acquire land in accordance with the Act as amended from time to time. ARTICLE V The Corporation shall have no members and shall have no stock. ARTICLE VI All powers of the Corporation shall be vested in a Board consisting of nine persons who shall be appointed by the City Council of the City. The initial board members, each of whom resides in the City, are identified in Article IX below and shall serve for the term expiring on the date set forth thereon. Subsequent board members shall be appointed by the City Council of the City. Each subsequent board member shall serve for a term of two (2) years or until his or her successor is appointed by the City Council of the City, unless such board member has been appointed to fill an unexpired term, in which case the term of such board member shall expire on the expiration date of the term of the board member who he or she was appointed to replace. Any board member may be removed from office at any time, with or without cause, by the City Council of the City. All other matters pertaining to the internal affairs of the Corporation shall be governed by the Bylaws of the Corporation, so long as such Bylaws are not inconsistent with these Articles of Incorporation or the laws of the State of Texas. ARTICLE VII The street address of the initial registered office ofthe Corporation is 1201 Leopard, Corpus Christi, Texas 78403, which is within the city limits of the City, and the name of its initial registered agent at such address is George Noe. ARTICLE VIII The names and street addresses of the incorporators, each of whom resides within the City, are: 2 NAME George Noe Oscar Martinez Armando Chapa ADDRESS 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 ARTICLE IX The Corporation shall be governed by a board of directors consisting of nine (9) directors. The names and street addresses of the initial directors, each of whom resides within the City, are: NAME Henry Garrett Melody Cooper Larry Elizondo, Sr. Mike Hummell Bill Kelly Priscilla G. Leal John E. Marez Nelda Martinez Michael McCutchon 3 ADDRESS 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 1201 Leopard Corpus Christi, Texas 78403 The initial directors shall serve a term that expires July 3 2 w off, and shall hold office for the terrn for which the initial director was appointed and until the director's successor is elected or appointed and has qualified. ARTICLE X A resolution approving the form of these Articles of Incorporation n has been adopted by the City Council of the City on October 23, 2007. ARTICLE XI No Director shall be liable to the Corporation for monetarydamages m for an act or omission in the Director's capacity as a Director, except for liability for an • y breach of the Director's duty of loyalty to the Corporation, (ii) for acts or omissionswhich ingood faith or involve intentional misconduct or a knowing violation of law, (iii) for any transaction fromwhich the Director received an improper benefit, whether the benefit it resulted from an act taken within the scope of the Director's office, or (iv) for acts or omissionsliability for which the tof Director is expresslyprovided bystatute. Any repeal or amendment of this Article bythe Directors shall be prospective only, andshall p p 'not adversely affect any limitation on the personal liability of a Director existing at the time of such repeal or amaddition p amendment. In to the circumstances in which a Director is not personally liable as set forth in therecedin sentences, aces, a Director shall not be liable to the fullest extent permitted by any amendment to the Texas statutes hereafter enacted that further limits the liability of a Director. ARTICLE XII In accordance with the provisions of Section 1 of the Internal Revenue Code of 1986, as amended (the "Integral Revenue Code"), and regardless of anyotherprovisions provisions of these Articles of Incorporation or the laws of the State of Texas, the Corporation: (a) shall not permit any part of the net earnings of the Corporation to inure to the benefit of any private individual al (except that reasonable compensation may be paid for personal services rendered to or for the Corporation in effecting one or more of its purposes); (b) shall not direct any of its activities to attempting to influence legislation by propaganda or otherwise; (c) shall not participate in or intervene in (including the publication or distribution of statements), anypolitical campaign n on behalf of anycandidate p for public office; andshall not attempt to influence the outcome of any election for public office or to carry on, directly or indirectly,anyvoter registration drives. anon drives. Any income earned by the Corporation after payment of reasonable expenses, debt and such reserves as may be necessary as set forth in the authorizing documents related to the issuance of debt by the Corporation shall accrue to the City. The City shall, at all times, have an unrestricted right to receive anyincome earned by , the Corporation, exclusive of amounts needed to cover reasonable expenditures p and reasonable reserves for future activities. Any income of the Corporation received by the City shall be 4 deposited into such account or fund as determined by the City Council of the City. No part of the Corporation's income shall insure to the benefit or any private interests. If the Board of Directors determines by resolution that the purposes for which the Corporation was formed have been substantially met and all bonds issued by and all obligations incurred by the Corporation have been fully paid or provision made for such payment, the Board shall execute a certificate of dissolution which states those facts and declares the Corporation dissolved in accordance with the requirements of Section 394.026 of Vernon's Texas Codes Annotated, Local Government Code, or with applicable law then in existence. In the event of dissolution or liquidation of the Corporation, all assets will be turned over to the City for deposit into such account or fund as the City Council shall direct. ARTICLE XIII If the Corporation is a private foundation within the meaning of Section 509(a) of the Internal Revenue Code, the Corporation (a) shall distribute its income for each taxable year at such time and in such manner as not to become subject to the tax on undistributed income imposed by Section 4942 of the Internal Revenue Code; (b) shall not engage in any act of self- dealing as defined in Section 4941 (d) of the Internal Revenue Code; (c) shall not retain any excess business holdings as defined in Section 4943(c) of the Internal Revenue Code; (d) shall not make any investments in such manner as to subject it to tax under Section 4944 of the Internal Revenue Code; and (e) shall not make any taxable expenditures as defined in Section 4945(d) Internal Revenue Code. ARTICLE XIV The City Council may at any time consider and approve an ordinance directing the Board to proceed with the dissolution of the Corporation, at which time the Board shall proceed with the dissolution of the Corporation in accordance with applicable state law. The failure of the Board to proceed with the dissolution of the Corporation in accordance with this Section shall be deemed a cause for• the removal from office of any or all of the Directors as permitted by Article VI of these Articles of Incorporation. ARTICLE XV These Articles may not be changed or amended unless approved by the City Council of the City. 5 20 07. IN WITNESS WHEREOF, we have hereunto set our hands this of , 6 George Noe, Incorporator Oscar Martinez, Incorporator Armando Chapa, Incorporator Sworn to and subscribed before me, on this day personally appeared George Noe, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. Given under my hand and seal of office this Notary Public Sworn to and subscribed before me, on this day personally appeared Oscar Martinez, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. Given under my hand and seal of office this Notary Public Sworn to and subscribed before me, on this day personally appeared Armando Chapa, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. Given under my hand and seal of office this 7 Notary Public BYLAWS OF CROSSTOWN COMMONS DEVELOPMENT CORPORATION ARTICLE 1 PURPOSES Crosstown Commons Development Corporation (the "Corporation") is organized for the purpose of aiding, assisting, and acting on behalf of the City of Corpus Christi, Texas (the "City") in the performance of its governmental functions to promote the City, including, without limitation, the development of the approximately 220 -acre site within the City located generally at the northeast corner ofthe Crosstown Expressway and Holly Road (the "Crosstown Commons Project Site"), in furtherance of the promotion, development, encouragement and maintenance of employment, commerce, economic development and public infrastructure development in the Crosstown Commons Project Site. The Corporation is formed pursuant to the provisions of Subchapter D, Chapter 431, Texas Transportation Code (the "Act") as it now or may hereafter be amended, which authorizes the Corporation to assist and act on behalf of the City to accomplish any governmental purpose of the City and to engage in activities in the furtherance of the purposes for its creation. The Corporation shall have and exercise all of the rights, powers, privileges, authority, and functions given by the general laws of the State of Texas to non-profit corporations incorporated under the Act including, without limitation, the Texas Non -Profit Corporation Act, Article 1396-1.01 et seq., Vernon's Texas Civil Statutes. The Corporation shall have all other powers of a like or different nature not prohibited by law which are available to non-profit corporations in Texas and which are necessary or useful to enable the Corporation to perform the purposes for which it is created, including the power to issue bonds, notes or other obligations, and otherwise exercise its borrowing power to accomplish the purposes for which it was created. The Corporation is created as a local governmental corporation pursuant to the Act and shall be a governmental unit within the meaning of Subdivision (2), Section 101.001, Texas Civil Practice and Remedies Code. The operations of the Corporation are govern ental and not proprietary functions for purposes of the Texas Tort Claims Act, Section 101.001 et seq., Texas Civil Practice and Remedies Code. The Corporation shall have the power to acquire land in accordance with the Act as amended from time to time. 1 Exhibit ARTICLE II BOARD OF DIRECTORS Section 1. Appointment, Powers, Number, and Term of, f, ice. All powers of the Corporation shall be vested in the Board of Directors (the "Board"). The Board shall initially consist of nine (9) persons who shall be appointed by the City Council of the City, as evidenced by the approval of the Articles of Incorporation by the City Council. Each initial Director shall serve for the term expiring on the date set forth in the Articles of Incorporation. Subsequent Directors shall be appointed by the City Council ofthe City. Each subsequent Director shall serve for a term of two years, expiring on July 31 of each year. Directors may be appointed to succeed themselves. No Director may serve longer than six (6) years consecutively, unless such service is required to complete an unexpired term. Each Director must be a resident and qualified elector of the City. Each Director, including the initial directors, shall be eligible for reappointment. Each Director shall serve until a successor is appointed. Any Director may be removed from office at any time, with or without cause, by the City Council of the City. Section 2. Meetings of Directors. The Directors may hold their meetings and may have an office and keep the books of the Corporation at the City Hall, or such other place or places within the City as the Board may from time to time determine; provided, however, in the absence of any such determination, the City Hall shall be the registered office of the Corporation in the State of Texas. The Board shall meet in accordance with and file notice of each meeting of the Board for the same length of time and in the same manner and location as is required of a City under Chapter 551, Government Code (the "Open Meetings Act"). The Corporation, the Board, and any committee of the Board exercising the powers of the Board are subject to Chapter 552, Government Code (the "Open Records Act"). Section 3. Annual Meetings. The annual meeting of the Board shall be held at the time and at the location in the City designated by the resolution of the Board for the purposes of transacting such business as may be brought before the meeting. Section 4. Regular Meetings. Regular meetings of the Board shall be held at such times and places as shall be designated, from time to time, by resolution of the Board. Section 5. Special and Emergency Meetings. Special and emergency meetings of the Board shall be held whenever called by the President of the Board or by a majority of the Directors who are serving duly appointed terms of office at the time the meeting is called. The Secretary shall give notice of each special meeting in person, by telephone, electronic transmission e.g., facsimile transmission or electronic mail) or mail at least three (3) 2 days before the meeting to each Director. Notice of each emergency meeting shall also be given in the manner required of the City under the Open Meetings Act. Unless otherwise indicated in the notice thereof, any and all matters pertaining to the purposes of the Corporation may be considered and acted upon at a special or emergency meeting. Section 6. Quorum. A majority of the Board shall constitute a quorum for the consideration of matters pertaining to the purposes of the Corporation. If at any meeting of the Board there is less than a quorum present, a majority of those present may adjourn the meeting from time to time. The act of a majority of the Directors present and voting at a meeting at which a quorum is in attendance shall constitute the act of the Board, unless the act of a greater number is required by law, by the Articles of Incorporation, or by these Bylaws. A Director who is present at a meeting of the Board at which any corporate action is taken shall be presumed to have assented to such action, unless his or her dissent shall be entered in the minutes of the meeting or unless he or she shall file a written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of the action. Section 7. Conduct of Business. At the meetings of the Board, matters pertaining to the purposes of the Corporation shall be considered in such order as from time to time the Board may determine. At all meetings of the Board, the President shall preside, and in the absence of the President, the Vice President shall preside. In the absence ofthe President and the Vice President, an acting presiding officer shall be chosen by the Board from among the Directors present. The Secretary of the Corporation shall act as secretary of all meetings of the Board, but in the absence of the Secretary, the presiding officer may appoint any person to act as secretary of the meeting. Section 8. Executive Committee, Other Committees. The Board may, by resolution passed by a majority of the Directors, designate three (3) or more Directors to constitute an executive committee or other type of committee. To the extent provided in the authorizing resolution, a committee shall have and may exercise all of the authority of the Board in the management of the Corporation, except where action of the Board is specified by statute. A committee shall act in the manner provided in the authorizing resolution. Each committee so designated shall keep regular minutes ofthe transactions of its meetings and shall cause such minutes to be recorded in books kept for that purpose in the office of the Corporation, and shall report the same to the Board from time to time. Committees authorized to exercise the powers of the Board shall give notice of any meeting in the manner required for a meeting ofthe Board. 3 Section 9. Compensation of Directors. Directors shall not receive any salary or compensation for their services as Directors. Section 10. Director's Reliance on Consultant Information. A Director shall not be liable if while acting in good faith and with ordinary care, the Director relies on information, opinions, reports, or statements. including financial statements and other financial data, concerning the Corporation or another person, that were prepared or presented by: (a) one or more other officers or employees of the Corporation; (b) legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence; or (c) a committee of the Board of which the Director is not a member. ARTICLE HI OFFICERS Section 1. Titles and Term of Office. The officers of the Corporation shall be the President, the Vice President, a secretary, a treasurer, and such other officers as the City Council may from time to time elect or appoint. One person may hold more than one office, except that one person shall not concurrently hold the offices of President and Secretary. The term of office for each officer shall be one (1) year with the term of office expiring on July 31 of each year. Officers may be re-elected. Section 2. Powers and Duties of the President The President shall be a member of the Board and shall preside at all meetings of the Board. The President shall be the principal executive officer of the Corporation and, subject to the Board, he or she shall be in general charge of the properties and affairs of the Corporation. In furtherance of the purposes of the Corporation and subject to the limitations contained in the Articles of Incorporation, the President or any Vice President may sign and execute all bonds, notes, deeds, conveyances, franchises, assignments, mortgages, notes, contracts and other obligations in the name of the Corporation. The President shall have such other duties as are assigned by the Board. The President may call special and emergency meetings of the Board. Section 3. Powers and Duties ofthe Vice President. The Vice President shall be a member of the Board. The Vice President shall perform the duties and exercise the powers ofthe President upon the President's death, absence, disability, or resignation, or upon the President's inability to perform the duties of his or her office. Any action taken by the Vice President in the performance of the duties of the President shall be conclusive evidence of the absence or inability to act of the President at the time such action was taken. A Vice President shall have such other powers and duties as may be assigned to him or her by the Board or the President. 4 Section 4. Treasurer. The Treasurer shall have custody of all the funds and securities of the Corporation which come into his or her hands. When necessary or proper, he or she may endorse, on behalf of the Corporation, for collection, checks, notes and other obligations and shall deposit the same to the credit of the Corporation in such bank or banks or depositories as shall be designated in the manner prescribed by the Board; he or she may sign all receipts and vouchers for payments made to the Corporation, either alone or jointly with such other officer as is designated by the Board; whenever required by the Board, he or she shall render a statement of his or her cash account; he or she shall enter or cause to be entered regularly in the books of the Corporation to be kept by him or her for that purpose full and accurate accounts of all moneys received and paid out on account ofthe Corporation; he or she shall perform all acts incident to the position of Treasurer subject to the control of the Board; and he or she shall, if required by the Board, give such bond for the faithful discharge of his or her duties in such form as the Board may require. The Treasurer need not be a member of the Board. Section 5. Secretary. The Secretary shall keep or cause to be kept the minutes of all meetings of the Board in books provided for that purpose; he or she shall attend to the giving and serving of all notices; in furtherance of the purposes of the Corporation and subject to the limitations contained in the Articles of Incorporation, he or she may sign with the President in the name of the Corporation and/or attest the signatures thereof, all contracts, conveyances, franchises, bonds, deeds, assignments, mortgages, notes and other instruments of the Corporation; he or she shall have charge ofthe Corporation's books, records, documents ents a d instruments, except the books of account and financial records and securities of which the Treasurer shall have custody and charge, and such other books and papers as the Board may direct, all of which shall at all reasonable times be open to the inspection of any Director upon application at the office of the Corporation during business hours; and, he or she shall in general perform all duties incident to the office of Secretary subject to the control of the Board. The Secretary need not be a member of the Board. Section 6. Executive Director. The City Manager of the City or the designee thereof will serve as the Executive Director of the Corporation, provide administrative support services for the Corporation, and perform duties as prescribed by the Board and the City Council. Section 7. Compensation. Officers shall not receive any salary or compensation for their services as officers. Section 8. Officer's i s Consultant f m rtion. In the discharge of a duty imposed or power conferred on an officer of the Corporation, the officer may in good faith and with ordinary care rely on information, opinions, reports, or statements, including financial statements and other financial data, concerning the Corporation or another person, that were prepared or presented by: (a) one or more other officers or employees of the Corporation, including members of the Board; or (b) legal counsel, public accountants, or other persons as to matters the officer 5 reasonably believes are within the person's professional or expert competence. Section 9. Hearingff icer. The Executive Director or the designee thereof shall serve as 'hearing officer' ofthe Corporation for the purpose of conducting any public hearing required under the Internal Revenue Code of 1986 as a condition precedent to the issuance of tax-exempt bonds by the Corporation. ARTICLE IV MISCELLANEOUS PROVISIONS Section 1. Fiscal Year. The fiscal year of the Corporation shall be the same as the City, or such other consecutive twelve-month period determined by the Corporati ARTICLE V INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 1. Right to Indemnification. Subject to the limitations and conditions as provided in this Article V and the Articles of Incorporation, each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (hereinafter a "proceeding"), or any appeal in such a proceeding or any inquiry or investigation that could lead to such a proceeding, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a Director or officer of the Corporation or while a Director or officer of the Corporation is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise shall be indemnified by the Corporation to the fullest extent permitted by the Texas Non -Profit Corporation Act, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) against judgments, penalties (including excise and similar taxes and punitive damages), fines, settlements and reasonable expenses (including, without limitation, attorneys' fees) actually incurred by such person in connection with such proceeding, and indemnification under this Article V shall continue as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity hereunder. The rights granted pursuant to this Article V shall be deemed contract rights, and no amendment, modification or repeal of this Article V shall have the effect of limiting or denying any such rights with respect to action taken or proceedings arising prior to any such amendment, modification or repeal. It is expressly acknowledged that the indemnification provided in this Article V could involve indemnification for negligence or under theories of strict liability. Section 2. Advance Payment. The right to indemnification conferred in this Article V shall include the right to be paid in advance or reimbursed by the Corporation the reasonable expenses incurred by a person of the type entitled to be indemnified under Section 1 who was, is or is threatened to be made a named defendant or respondent in a proceeding in advance of the final disposition of the proceeding and without any determination as to the person's ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such person in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of a written affirmation by such Director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification under this Article V and a written undertaking, by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined that such indemnified person is not entitled to be indemnified under this Article V or otherwise. Section 3. Indemnification f Employees and Agents. The Corporation, by adoption of a resolution of the Board, may indemnify and advance expenses to an employee or agent of 7 the Corporation to the same extent and subject to the same conditions under which it may indemnify and advance expenses to Directors and officers under this Article V; and the Corporation may indemnify and advance expenses to persons who are not or were not Directors, officers, employees or agents of the Corporation but who are or were serving at the request of the Corporation as a Director, officer, partner, venture proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any liability asserted against him or her and incurred by him or her in such a capacity or arising out of his or her status a such a person to the same extent that it may indemnify and advance expenses to Directors under this Article V. Section 4. Appearance as a Witness. Notwithstanding any other provision of this Article V, the Corporation may pay or reimburse expenses incurred by a Director or officer in connection with his or her appearance as a witness or other participation in a proceeding involving the Corporation or its business at a time when he or she is not a named defendant or respondent in the proceeding. Section 5. Non -exclusivity of Rights. The right to indemnification and the advancement and payment of expenses conferred in this Article V shall not be exclusive of any other right which a Director or officer or other person indemnifi this Article V that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE VI CODE OF ETHICS Section 1. Policy and Purposes. (a) It is the policy of the Corporation that Directors and officers conduct themselves in a manner consistent with sound business and ethical practices; that the public interest always be considered in conducting corporate business; that the appearance of impropriety be avoided to ensure and maintain public confidence in the Corporation; and that the Board establish policies to control and manage the affairs of the Corporation fairly, impartially, and without discrimination. (b) This Code of Ethics has been adopted as part of the Corporation's Bylaws for the following purposes: (a) to encourage high ethical standards in official conduct by Directors and corporate officers; and to establish guidelines for such ethical standards of conduct. Section 2. Conflicts of Interest (a) Except as provided in subsection (c), a Director or officer is prohibited from participating in a vote, decision, or award ofa contract involving a business entity or real property in which the Director or the officer has a substantial interest, if it is foreseeable that the business entity or real property will be economically benefitted by the action. A person has a substantial interest in a business i if his or her ownership interest is ten percent or more of the voting stock or shares of the business entity or ownership of $15,000 or more of the fair market value of the business entity, or (ii) i (d) An employee of a public entity may serve on the Board. Section 3. Acceptance of ` Gifts. No Director or officer shall accept any benefit as consideration for any decision, opinion, recommendation, vote or other exercise of discretion in carrying out official acts for the Corporation. No Director or officer shall solicit, accept, or agree to accept any benefit from a person known n to be interested in or likely to become interested in any contract, purchase, payment, claim or transaction involving the exercise of the Director's or officer's discretion. As used here, a benefit does not include: (a) a fee prescribed by law to be received by a Director or officer or any other benefit to which the Director or officer is lawfully entitled or for which he or she gives legitimate consideration in a capacity other than as a Director or officer, (b) a gift or other benefit conferred on account of kinship or a personal, professional. or business relationship independent of the official status of the Director or officer; (c) an honorarium in consideration for legitimate services rendered above and beyond official duties and responsibilities if: (1) not more than one honorarium is received from the same person in a calendar year; (2) (3) not more than one honorarium is received for the same service; and the value of the honorarium does not exceed $250 exclusive of reimbursement for travel, food, and lodging expenses incurred by the Director or officer in performance of the services; (d) a benefit consisting of food, lodging, transportation, or entertainment accepted as a guest if reported as may be required by law. Section 4. Bribery. A Director or officer shall not intentionally or knowingly offer, confer or agree to confer on another, or solicit, accept, or agree to accept from another: (a) any benefit as consideration for the Director's or officer's decision, opinion, recommendation, vote, or other exercise of discretion as a Director or officer; (b) any benefit as consideration for the Director or officer's decision, vote, recommendation, or other exercise of official discretion in a judicial or administrative proceeding; or (c) any benefit as consideration for a violation of duty imposed by law on the Director or officer. 10 Section 5. Nepotism. No Director or officer shall appoint, or vote for, or confirm the appointment to any office, position, clerkship, employment or duty, of any person related within the second degree by affinity r within the third degree of consanguinity to the Director or officer so appointing, voting or confirming, or to any other Director or officer. This provision shall not prevent the appointment, voting for, or confirmation of any person who shall have been continuously employed in any such office, position, clerkship, employment or duty at least thirty (30) days prior to the appointment of the Director or officer so appointing or voting. ARTICLE VII AMENDMENTS A proposal to alter, amend, or repeal these Bylaws shall be made by the affirmative vote of a majority of the full Board at any annual or regular meeting, or at any special meeting if notice of the proposed amendment be contained in the notice of said special meeting. Any proposed change or amendment to the Bylaws, however, must be approved by the City Council of the City to be effective. 11