Independence Association Bylaws
INDEPENDENCE ASSOCIATION, INC.
BYLAWS
ARTICLE I:
GENERAL
Section 1.
The name of this corporation is "Independence Association, Inc." (hereinafter referred to as the "Association").
Section 2:
The Board of Directors of the Association shall elect the Registered Agent of the Association and may change the Registered Agent at any time and from time to time.
Section 3.
The Board of Directors of the Association shall designate the Registered Office of the Association.
The Board of Directors or the Registered Agent may change the Registered Office at any time and from time to time.
ARTICLE II:
PURPOSES
Section 1.
This benevolent, charitable and eleemosynary institution has been organized and is incorporated as a public benefit corporation pursuant to the Maine Nonprofit Corporation Act (Title 13-B, Section 101 et seq., M.R.S.A., hereinafter the “Act”) and shall be operated exclusively for charitable, educational, or scientific purposes within the meaning of
Section 501(c)(3) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”).
Within these purposes, the purposes of the Association shall include:
a.
To promote the general welfare of persons with disabilities, primarily mental retardation; to foster the development of programs in their behalf; and to advise and aid their families and guardians in their efforts and activities and in meeting special situations.
b.
To promote a better understanding by the public of disabilities, primarily mental retardation.
c.
To cooperate with all public and private agencies and professional groups in the furtherance of these ends.
e.
To serve as a clearinghouse for gathering and disseminating
information regarding persons with disabilities, primarily mental retardation.
f.
To encourage education related to disabilities, primarily mental retardation.
g.
To solicit and receive funds for the accomplishment of the above purposes.
Section 2.
It is intended that the Association shall have the status of a corporation (i) that is exempt from Federal income taxation under Code Section 501(c)(3), (ii) contributions to which are deductible under Code Sections 170(c)(2), 2055(a)(2) and 2522(a)(2) and (iii) that is not a “private foundation” as defined in Code Section 509(a).
The Articles of Incorporation and these Bylaws shall be construed accordingly and all powers and activities of the Association shall be limited accordingly.
In this regard:
a.
The Association shall not engage in any transaction, or do or permit any act or omission, that would operate to deprive it of its tax exempt status under Code Section 501(c)(3);
b.
No substantial part of the activities of this Association shall be the carrying on of propaganda, or otherwise attempting to influence legislation; provided, however, that notwithstanding the foregoing, nothing in this Article shall be construed to prevent the Association from making the election available under Code Section 501(h), but during any tax year for which an election under Code Section 501(h) shall be in effect for the Association or any Affiliated Organization, as defined in Code Section 4911(f), "direct lobby expenditures" and "grass roots expenditures" by the Association in that tax year shall not exceed the applicable limits under Section 501(h) calculated without regard to the "exempt purpose expenditures" of any other Affiliated Organizations;
c.
The Association shall not, in any manner or to any extent, participate or intervene (including publishing or distribution of statements) in any political campaign on behalf of any candidate for public office; and
d.
The Association shall not engage in any activities that are unlawful under applicable federal, state, or local laws.
Section 3.
Services of the Association shall be delivered based upon the developmental and other needs of the persons served and shall not be affected because of race, color, sex, sexual orientation, physical or mental disability, religion, age, ancestry or national origin.
Neither shall the aforementioned categories be a basis for excluding persons eligible for services.
There will be no discrimination among employees based upon any of the preceding prohibited classes or categories with regard to hiring, assignment, or promotion.
Section 4.
The Association shall not transfer or apply any of its funds or assets in any transaction that would be considered a violation of Section 721 of the Act, including any conflict of interest transaction under Section 718 of the Act and any conversion transaction in violation of 5 M.R.S.A. sections 194-C to 194-H.
Section 5.
The Association shall have power, where not prohibited by federal, state or local laws, to acquire by purchase, gift, devise, or otherwise, and to own, hold, buy, sell, convey, lease, rent, mortgage or encumber real estate, personal property, or any interests therein as may be necessary or desirable in carrying out the purposes of the Association.
ARTICLE
III:
AREA OF ACTIVITY
The area that the Association serves lies within the boundaries of the State of
Maine.
ARTICLE IV:
FISCAL YEAR
The Fiscal Year of the Association shall be from the first day of July each calendar year through the last day of June of the following calendar year.
ARTICLE V:
MEMBERSHIP
Section 1.
Membership shall be open to all persons who pay dues or make a financial contribution to the Association during the current fiscal year in an amount at least equal to the amount established as dues from time to time by the Board of Directors.
Section 2.
Members who are in good standing shall be eligible to vote, in person or by proxy, on all questions at general membership meetings.
Each member in good standing is entitled to one (1) vote on any matter properly submitted for a vote.
ARTICLE VI:
DUES
Section 1.
Members shall pay yearly dues (which may take the form of an equivalent contribution) in an amount established by the Board of Directors.
Section 2.
A membership year shall coincide with the fiscal year. The Board of Directors shall establish the dues for the upcoming fiscal year prior to the start of that year.
Dues for a current membership year shall be payable on or before the last day of the concurrent fiscal year.
ARTICLE
VII:
MEMBERS’ MEETINGS
Section 1.
The annual meeting of the members of the Association for any given fiscal year shall be held prior to November 1st of that year at a date, time and place determined by the Board of Directors, but not more than thirteen months after the date of the preceding annual meeting. A written notice of the annual meeting shall be delivered to all members of the Association not more than sixty (60) days nor less than thirty (30) days prior to the meeting date.
Section 2.
Special meetings of the Association may be called by the President, the Board of Directors, or by any five (5) Association members who make written application to the Secretary. Once a special meeting has been properly called, the Secretary shall deliver written notice of the special meeting, setting forth the date, time, location and purpose of the special meeting to all members of the Association not more than thirty (30) days nor less than seven (7) days prior to the meeting date. No business may be transacted at the special meeting other than that which was set forth in the notice to members.
Section 3.
All annual and special meetings of the members shall require a quorum of thirty percent (30%) of the members then enrolled on the books of the Association or twenty (20) members in good standing, whichever is less.
ARTICLE VIII:
BOARD OF DIRECTORS
Section 1.
The Board of Directors shall be elected by the membership at the annual meeting.
Section 2.
The Board of Directors shall consist of not less than ten (10) nor more than twenty (20) persons. The number of directors within those limits shall be set, and may be increased or decreased, by resolution of
the Board of Directors.
No more than 49% of the directors may be "financially interested persons" as defined in section 713-A of the Act.
Section 3.
The Board of Directors shall establish a time and place for its regular meetings,
to be no less than 6 meetings per year. Each director shall be given advance written notice of each meeting. Each year, the Board of Directors shall meet immediately following the annual meeting of the members to elect the officers of the Association and transact such other business as may properly come before it.
Section 4.
Special meetings of the Board of Directors may be called at any time by the President, or if he or she
is absent or is unable to act, by the Vice President and shall be called by the Secretary upon the written request of two (2) directors, with not less than twenty-four (24) hours advance notice.
Section 5.
The Board of Directors shall set and control all policy of the Association.
Section 6.
Directors shall not receive compensation for service as directors of the Association.
Directors may be reimbursed for reasonable expenses incurred in their service as directors.
Section 7.
At any meeting of the Board of Directors, a majority of the directors then in office shall constitute a quorum for the transaction of business; provided that if less than a quorum is present, a majority of the directors may adjourn the meeting until a quorum is attained.
The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by the Articles of Incorporation, these Bylaws, or any provision of law.
Section 8.
Directors are expected to attend all meetings of the Board of Directors and of any committees on which they serve, unless excused by the President or committee chairperson
for good cause or unless this provision is waived by unanimous vote of the remaining directors.
Directors may participate in meetings by telephone conference call
or similar communications equipment by means of which all persons participating in the meeting can hear each other.
Section 9.
Any action that may be taken at a meeting of the directors may be taken without a meeting if all of the directors sign written consents setting forth the action taken or to be taken at any time before or after the intended effective date of such action.
The consents shall be filed with the minutes of the directors’ meetings and shall have the same effect as a unanimous vote.
Section 10.
A director may be removed from office in any manner provided by law.
ARTICLE IX:
CONFLICTS OF INTEREST
Section 1.
The Association has a strong interest in assuring that its interests are not adversely affected by conflicts of interest among its directors, officers, or its Executive Director.
The Association’s Conflict of Interest Policy, attached to these Bylaws as
Exhibit A, is incorporated here by reference.
Section 2:
Annually, all directors shall sign a statement that acknowledges understanding of the Association’s Conflict of Interest Policy.
ARTICLE X:
EXECUTIVE DIRECTOR
Section 1.
The Board of Directors shall appoint an
Executive Director of the Association.
Section 2.
The
Executive Director of the Association shall be
the chief executive officer of the Association, shall have general and active management of the business of the Association, and shall see that all orders and resolutions of the Board of Directors are carried into effect.
Section 3.
The
Executive Director is not authorized a vote in matters that come before the Board.
ARTICLE XI:
OFFICERS
Section 1.
The officers of the Association shall be elected by the Board of Directors. The officers of the Association will consist of a President , Vice Vice-President, a Secretary, and a Treasurer.
Section 2.
The President shall preside at all meetings of the Association and the Board of Directors. The President shall appoint, with the approval of the Board of Directors, chairpersons of all committees and be an ex-officio member of all committees of the Association. The President shall perform all other duties incident to the office of President. The President shall present the annual report to the Board of Directors and the membership.
Section 3.
The Vice President shall assume the duties of President in the event of a vacancy in that office until such time as a successor shall be duly elected by the Board of Directors, and shall perform the duties of the President in his or her absence or disability. The Vice President shall undertake such other duties as the President and the Board of Directors may delegate or assign.
Section 4.
The Secretary shall be responsible for the correspondence of the Association, as necessary, and shall maintain and update all non-financial records, including the membership list. The Secretary shall be responsible for assuring that proper minutes of all meetings of the Board of Directors and the members of the Association are permanently maintained in one or more minute books reserved for that purpose
.
The Secretary shall perform such other duties as are incident to the office of Secretary and such other duties as from time to time may be assigned by the Board of Directors.
Section 5.
The Treasurer shall be responsible for coordinating and ensuring the proper financial oversight of the Association.
The Treasurer, acting on behalf of the Board of Directors, shall require that appropriate financial records and books of account be kept.
The Treasurer shall perform such other duties as are incident to the office of Treasurer and such other duties as from time to time may be assigned by the Board of Directors.
At the close of each fiscal year the Treasurer shall present the annual financial statements to the Board of Directors.
Section 6.
The Board of Directors may suspend or remove any officer of the Association at any time, with or without cause, by majority vote of the directors present at any meeting of the Board of Directors where a quorum is present.
No such suspension or removal shall affect any contract right of the person so removed; provided, however, that election or appointment to any position or office within the Association shall not, in itself, create contract rights.
ARTICLE XII:
ADVISORY BOARD
Section 1.
The Advisory Board shall be appointed by the Board of Directors.
Section 2.
Members of the Advisory Board shall be knowledgeable by virtue of training or experience of the services provided by the Association. The Advisory Board shall be comprised primarily of
persons receiving services
and parents, guardians,
spouses, or siblings of persons receiving services.
Prior Board of Director members or other community members may serve on the Advisory Board.
Section 3.
There shall be
not
less than 5 members of the Advisory Board at any given time.
Section 4.
The Advisory Board shall advise the Board of Directors and the Association on all matters concerning the provision of services to consumers.
The Advisory Board shall meet no less often than annually and shall maintain a record of attendance and minutes of its meetings including matters reviewed and opinions provided
.
Section 5.
Advisory Board members may serve on any committees of the Board of Directors other than the Executive Committee.
ARTICLE XIII:
TERMS OF OFFICE
Section 1.
Except as set forth in Section 2, a director of the Association shall serve for a term of three (3) years (until the third annual meeting following the date of election of that director), until the successor to that director is duly elected and qualified, or until the director’s earlier death, incapacity, resignation or removal from office.
Section 2.
The term of a director who is elected as President during either of the final two years of his or her second full term as a director shall be extended for one (1) year to enable that person to complete the term of office of President or immediate past President, as the case may be.
Section 3.
A director may serve two consecutive terms in office for a total of six (6) consecutive years. A person who has reached the limit of consecutive terms or years in office as a director shall not be eligible to be elected a director of the Association again until a time period has elapsed equal to the time between two (2) annual meetings of the Association, a period of approximately one (1) year.
Exceptions to term limits are as follows:
a.
A director who is elected as President during either of the final two years of his or her second full term may serve the one (1) year extension provided in Section 2 above.
b.
A director who is elected to fill a vacancy on the Board of Directors may serve out the remaining term of the departed director and may serve an additional two consecutive terms as a director thereafter.
Section 4.
In the event of any vacancy on the Board of Directors or among elected officers of the Association, the Board of Directors may elect a successor to serve and complete the unexpired term of the officer or director not completing his or her elected term.
Section 5.
Any director, officer or person appointed to serve on a committee of the Association may resign as such at any time by giving written notice to the Secretary
.
Section 6.
The officers of the Association shall be elected from among the members of the Board of Directors.
Each officer shall serve for a single two (2) year term until his or her successor have been duly elected, or until his or her earlier death, incapacity, resignation or removal from office.
Directors may seek election as Board officers as often as they wish.
ARTICLE XIV:
COMMITTEES
Section 1.
The Standing Committees of the Association shall be the following: Executive Committee, Personnel, Finance
,
and
Governance. The chairperson of each Standing Committee shall be a member of the Board of Directors.
The Standing Committees shall have the following duties:
a.
Executive Committee: This committee shall generally meet monthly, but not less than quarterly.
It shall be comprised of the officers of the Association, the committee chairs of all standing committees and other board members as designated by the Board of Directors. This committee shall be empowered to act on behalf of the Board of Directors when so directed by the Board of Directors, or in an emergency situation. The Board of Directors shall review all actions taken by the Executive Committee in the name of the Association, but no such review shall affect the validity of any such action.
b.
Personnel Committee:
This committee shall meet as needed and receive assignments from the Board of Directors dealing with personnel matters. The Committee shall present in writing and discuss with the Board of Directors proposed personnel policies, changes in policies, or changes in application of policies according to its charge. This committee shall conduct an annual performance review of the President and Chief Executive Officer and present the review to the Board. It shall consist of not less than three (3) members.
c.
Finance Committee:
This committee shall generally meet monthly, but not less than quarterly, to review financial matters. It will report to the Board of Directors on a monthly basis. It shall consist of not less than three (3) members, including the Treasurer who will generally chair this committee.
d.
Governance Committee:
This committee shall meet as needed, but not less than bi-annually.
The Governance Committee is responsible for interviewing and nominating candidates for the Board of Directors and/or its committees; a list of nominees for Board of Director and/or officer positions shall be presented by this committee to the Board at the regular meeting preceding the Association’s annual meeting. Other areas of responsibility include, but are not limited to: orientation of new directors; on-going education and training of the Board of Directors; regular review of Board job descriptions, policies and procedures; coordination of periodic Bylaw review process and committee; and periodic assessment of the Board and its members.
It shall consist of not less than three (3) members. All Board members are expected to assist in the identification and recruitment of potential Board members.
e.
Advisory Board:
Two directors shall serve as members of the Advisory Board in lieu of a committee assignment.
The Advisory Board responsibilities are outlined in Article XII.
Section 2.
Special Committees, such as an Audit Committee, Oversight Committee, Public Relations or Legislative Committee may be appointed by the Board of Directors as the need arises.
Section 3.
At any meeting of any Committee of the Association, a majority of the members of the Committee then in office shall constitute a quorum for the transaction of business.
The act of a majority of the Committee members present at a meeting at which a quorum is present shall be the act of the Committee, unless the act of a greater number is required by the Articles of Incorporation, these Bylaws, or any provision of law.
ARTICLE XV:
PARLIAMENTARY AUTHORITY
Robert's Rules of Order shall govern the conduct of business in all cases in which they are applicable and not in conflict with these Bylaws.
ARTICLE XVI:
INDEMNIFICATION
Section 1.
The individual property of the directors, officers, employees or agents of the Association shall not be held liable for the debts of the Association.
Section 2.
Subject to the limitations provided at Sections 4 and 6 of this Article XVI, the Association shall in all cases, to the fullest extent permitted by the Act, indemnify any person who was or is involved in any manner (including, without limitation, as a party or a witness) in any threatened, pending or completed investigation, claim, action, suit, or proceeding, whether civil, criminal, administrative, or investigative (including, without limitation, any action, suit, or proceeding brought by or in the right of the Association to procure a judgment in its favor) by reason of the fact that that person is or was a director or officer of the Association, against all liabilities and expenses actually and reasonably incurred by the person in connection with such actions, suits or proceedings including but not limited to attorneys’ fees, judgments, fines and amounts paid in settlement.
Section 3.
Subject to the limitations provided at Sections 4 and 6 of this Article XVI, the Association may (but except as provided in Section 2 above, shall not be required to) indemnify any other person who was or is a party (or is threatened to be made a party) to any threatened or pending action, suit, or other proceeding by reason of the fact that he or she is or was an employee or agent of the Association (or is or was serving at the request of the Association as a director, officer, trustee, employee, partner, fiduciary, or agent of another entity), or by reason of his or her conduct in any such capacity, against expenses actually and reasonably incurred by him or her in connection with such proceeding.
Such indemnification shall be subject to any restrictions imposed by applicable law or by the Board of Directors in its discretion.
Section 4.
No indemnification shall be provided for any person with respect to any matter as to which that person shall have been finally adjudicated in any action, suit or proceeding (a) not to have acted in good faith in the reasonable belief that that person’s action was in the best interests of the Association or, with respect to any criminal action or proceeding, or (b) to have had reasonable cause to believe that that person’s conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order or conviction adverse to such person, or by settlement or plea of nolo contendere or its equivalent, shall not of itself create a presumption that such person did not act in good faith in the reasonable belief that his action was in the best interests of the Association, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 5.
Any provision of Sections 2, 3, 4 or 6 of this Article XVI to the contrary notwithstanding, to the extent that a director, officer, employee or agent of the Association has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 2 or 3 of this Article XVI, or in defense of any claim, issue or matter therein, that person shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by that person in connection therewith.
The right to indemnification granted by this Section 5 may be enforced by a separate action against the Association, if an order for indemnification is not entered by a court in the action, suit or proceeding wherein he was successful on the merits or otherwise.
Section 6.
Any indemnification under Section 2 or 3 of this Article XVI, unless ordered by a court, shall be made by the Association only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because that person has met the applicable standard of conduct set forth in either Section 2 or 3, and 4.
That determination shall be made by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or if such a quorum is not obtainable, or even if obtainable, if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion.
Such a determination, once made by the Board of Directors may not be revoked by the Board of Directors, and upon the making of such determination by the Board of Directors, the director or officer may enforce the indemnification against the Association by a separate action notwithstanding any attempted or actual subsequent action by the Board of Directors.
Section 7.
In its discretion the Board of Directors may, on such conditions as it deems appropriate, authorize the Association to pay or reimburse the costs of investigation, attorneys’ fees, and other expenses incurred by a person entitled to reimbursement under this Article, even in advance of the final disposition of the proceeding in question upon a determination made in accordance with the procedure established in Section 6 that, based solely on the facts then known to those making the determination and without further investigation, the person seeking indemnification satisfied the applicable standard of conduct prescribed by either Section 2 or 3, and 4.
Those persons making such determination may, in their discretion, require such person to provide to the Association a written affirmation by the officer or director that the person has met the standard of conduct necessary for indemnification by the Association as authorized in this section.
Notwithstanding the foregoing, any person receiving an advance payment under this Section 7 shall provide the Association with an undertaking to repay any such amounts unless it shall ultimately be determined that he is entitled to be indemnified by the Association as provided in Sections 2, 3 and 4 above.
That undertaking shall be an unlimited general obligation of the person seeking the advance, but need not be secured and may be accepted without reference to financial ability to make the repayment.
Section 8.
The indemnification and entitlement to advances of expenses provided by this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, vote of disinterested directors or otherwise, both as to action in that person’s official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, trustee, partner or fiduciary and shall inure to the benefit of the heirs, executors and administrators of such a person.
A right to indemnification may be enforced by a separate action against the Association, if an order for indemnification has not been entered by a court in any action, suit or proceeding in respect to which indemnification is sought.
Section 9.
The Association shall, upon the approval of the Board of Directors as time to time may be necessary, purchase and maintain insurance on behalf of the persons described in Sections 2 and 3 of this Article against any liability asserted against such persons and incurred by such persons in any such capacity, or arising out of their status as such, whether or not the Association would have the power to indemnify such persons under the laws of the State of Maine.
ARTICLE XVII:
LIMITATIONS
Section 1.
All contributions made to the Association shall be deductible as charitable contributions under Code Section 170 and the Association shall comply with the necessary requirements to maintain non-profit status under Code Section 501(c)(3) and the sections ancillary thereto; and
Section 2.
No part of the assets of the Association, either principal or income, shall ever inure to the benefit of any private shareholder or individual, or any person which is not itself a charitable corporation as defined in Code Section 501(c)(3), or any of the Association's members, directors, or officers, either directly or indirectly, in the sense these words are used in Code Sections 170(c) or 501(c)(3); provided, however, that the Association may provide services to any person meeting the Association's objective criteria and requirements for the provision of services or the benefit thereof consistent with its purposes; and the Association shall not carry on any activity that might disqualify the Association from tax exemption under Code Section 501(c)(3) or from receiving charitable contributions under Code Section 170.
ARTICLE XVIII:
DISSOLUTION
Section 1.
All the assets and income of the Association shall be used exclusively for its charitable, educational, or scientific purposes and no part thereof shall inure to the benefit of any director, officer, or private individual; provided, however, that nothing contained herein shall be construed to prevent the payment or reimbursement by the Association of reasonable salaries and expenses of its officers and employees.
Section 2.
If the Association be dissolved or its legal existence terminated, either voluntarily or involuntarily, or upon final liquidation of the Association, none of its assets shall inure to the benefit of any director, officer, or private individual, and all of its assets remaining after payment of all of its liabilities shall be distributed by affirmative vote of the Board of Directors exclusively either (i) to a local, state, or federal government for exclusively public use, or (ii) to one or more nonprofit organizations serving persons with mental retardation having similar aims and objects as those of the Association and which may be selected as an appropriate recipient of such assets by the Board of Directors, as long as such organization, or each of such organizations, shall then qualify as an organization exempt from federal income taxation under Code Section 501(a) as an organization described in Code Section 501(c)(3) and as a “public benefit corporation” within the meaning of the Act.
Section 3.
In the event the assets of the Association are not so distributed, said assets shall be distributed by a court of competent jurisdiction in the county where the principal office of the Association is located either (i) to a local, state, or federal government for exclusively public use, or (ii) to a non-profit organization or organizations serving persons with mental retardation having similar aims and objects as the Association and which may be selected as an appropriate recipient of such assets as long as such organization, or each of such organizations, shall then qualify as an organization exempt from federal income taxation under Code Section 501(a) as an organization described in Code Section 501(c)(3) and as a “public benefit corporation” within the meaning of the Act.
ARTICLE XIX:
AMENDMENTS
These Bylaws may be amended by an affirmative vote of two thirds (2/3) of the Association members in attendance at an annual meeting or special meeting where the membership present meets the qualification for a quorum as established in Article
VII, Section 3 of these Bylaws.
In addition to following the provisions for notification as established in Article
VII, Sections 1 or 2 of these Bylaws, whichever best applies, Association members must also receive or be advised where they may obtain the proposed amendment(s) to these Bylaws at the time of notification.
These are the current Bylaws approved and adopted by the membership on
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(Signed Marie M. Jones)
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(Signed Charles Frizzle)
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President
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Secretary
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EXHIBIT A TO CORPORATE BYLAWS
of
Independence Association, Inc.
(A
Maine Nonprofit Public Benefit Membership Corporation)
CONFLICT OF INTEREST POLICY
Article 1. Purpose
The purpose of this conflict of interest policy is to protect the interests of Independence Association, Inc. (the “Association”) when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director or the Executive Director of the Association or that might result in a possible excess benefit transaction.
This policy shall be interpreted in a manner consistent with the requirements of Section 718 of the Maine Nonprofit Corporations Act, 13-B M.R.S.A. section 101, et seq.
It shall supplement but not replace any other applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations.
Article 2. Definitions
2.1
Conflict of Interest Transaction:
A “Conflict of Interest Transaction” is a transaction or arrangement in which an Interested Person has a Financial Interest.
2.2
Interested Person:
An “Interested Person” is any person who serves the Association as a director, officer, member of a committee with board delegated powers, or as Executive Director.
If a person is an Interested Person with respect to any Affiliated Organization (as hereinafter defined), then that person is also an Interested Person with respect to the Association.
2.3
Financial Interest:
An Interested Person has a “Financial Interest” in a transaction or arrangement if the person has, through business, investment, or family:
(a)
A direct financial interest in the transaction or arrangement.
(b) An ownership, investment or other material interest, or an interest as a general partner, director, officer or trustee, in any entity with which the Association has an arrangement or that is a party to the transaction,
(c)
A compensation arrangement with the Association or with any entity or individual with which the Association has a transaction or arrangement, or
(d)
A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Association is negotiating a transaction or arrangement.
Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.
2.4
Affiliated Organization:
An “Affiliated Organization” shall mean the Association, any corporation that controls the Association, or any legal entity or organization that controls, or is controlled by, any Affiliated Organization.
An organization shall be understood to control another if it has the right (directly or indirectly) to elect or appoint a majority of the people who have voting rights serving on the governing board of such other organization; provided, however, that ex officio members of a governing board shall be treated as if elected or appointed by the organization referenced in their ex officio appointment.
Article 3. Procedures
3.1
Duty to Disclose:
In connection with any actual or possible Conflict of Interest Transaction, an Interested Person must disclose the existence of the Financial Interest and be given the opportunity to disclose all material facts to the directors and members of committees with board delegated powers considering the proposed transaction or arrangement.
3.2
Determining Whether A Transaction is a Conflict of Interest Transaction:
After disclosure of the Financial Interest and all material facts, and after any discussion with the Interested Person, the Interested Person shall leave the Board of Directors or committee meeting while the determination of a conflict of interest is discussed and voted upon.
The remaining board or committee members shall decide if the transaction constitutes a Conflict of Interest Transaction.
3.3
Procedures for addressing the Conflict of Interest:
(a)
An Interested Person may make a presentation at the Board or committee meeting and respond to questions, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the possible Conflict of Interest Transaction.
(b)
The President of the Board of Directors or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed Conflict of Interest Transaction.
(c)
After exercising due diligence, the Board of Directors or committee shall determine whether the Association can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest.
(d)
If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the Board or committee shall determine by a majority vote of the directors who have no direct or indirect interest in the transaction whether the Conflict of Interest Transaction is in the Association’s best interest, for its own benefit, and whether it is fair, reasonable and equitable to the Association as of the date the transaction is authorized, approved or ratified.
A Conflict of Interest Transaction may not be approved by a single director.
The party asserting the fairness of a Conflict of Interest Transaction shall have the burden of establishing fairness.
In conformity with the above determination the Board or committee shall make its decision as to whether to enter into the Conflict of Interest Transaction.
(e)
The Association’s Board of Directors may request approval of any Conflict of Interest Transaction from the Attorney General or by the Superior Court in an action in which the Attorney General is joined as a party.
If the
Association’s Board of Directors is unable to make a decision about any Conflict of Interest Transaction, one or more directors or officers may request approval from the Maine Attorney General or the Superior Court as provided above.
3.4
Violation of the Conflicts of Interest Policy:
(a)
If the Board or committee has reasonable cause to believe a member has failed to disclose an actual or possible Conflict of Interest Transaction, it shall
inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose.
(b)
If, after hearing the member’s response and after making further investigation as warranted by the circumstances, the Board of Directors or committee determines the member has failed to disclose an actual or possible Conflict of Interest Transaction, it shall take appropriate disciplinary and corrective action.
Article 4. Records of Proceedings
4.1
Minutes:
The minutes of the Board and all committees with board delegated powers shall contain:
(a)
The names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible Conflict of Interest Transaction, the nature of the Financial Interest, any action taken to determine whether a conflict of interest was present, and the Board’s or committee’s decision as to whether a Conflict of Interest Transaction in fact existed.
(b)
The names of the persons who were present for discussion and votes relating to the Conflict of Interest Transaction, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.
Article 5. Compensation
5.1
Recusal of Directors Required:
A voting member of the Board who receives compensation, directly or indirectly, from the Association for services is precluded from voting on matters pertaining to that director’s compensation.
5.2
Recusal of Certain Committee Members Required:
A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that member’s compensation.
5.3
Information May Be Presented:
No voting member of the Board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Association, either individually or collectively, is prohibited from providing
information to any committee regarding compensation.
5.4
Specific Arrangements:
The Board of Directors will approve all compensation arrangements over which it has authority in advance of paying compensation.
All compensation arrangements for the Association shall be in writing, and shall at a minimum note the date and basic terms of the arrangement.
Article 6. Annual Statements
6.1
Signed Statements Required:
Each director, principal officer and member of a committee with board delegated powers shall annually sign a statement that affirms such person:
(a)
Has received a copy of this Conflicts of Interest Policy;
(b)
Has read and understands the policy;
(c)
Agrees to comply with the policy; and
(d)
Understands the Association is charitable and, in order to maintain its federal tax exemption, it must engage primarily in activities that accomplish one or more of its tax-exempt charitable purposes.
Article 7. Periodic Reviews
7.1
Review Procedure:
To ensure the Association operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted.
The periodic reviews shall, at a minimum, include the following subjects:
(a)
Whether compensation arrangements and benefits are reasonable, based on competent survey
information, and the result of arm’s length bargaining.
(b)
Whether partnerships, joint ventures, and arrangements with management organizations conform to the Association’s written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes and do not result in inurement, impermissible private benefit or in an excess benefit transaction.
7.2
Use of Outside Experts:
When conducting the periodic reviews as provided for in Article
VII, Section 7.1, the Association may, but need not, use outside advisors.
If outside experts are used, their use shall not relieve the Board of its responsibility for ensuring periodic reviews are conducted.