AMERICAN HIGHLAND CATTLE ASSOCIATION
AMENDED AND RESTATED BY-LAWS
June 20, 2009
ARTICLE I
MEMBERSHIP
SECTION
1. Name. The By-laws are adopted for the
American Highland Cattle Association, (formerly known as the “American Scotch
Highland Breeders Association”), a South Dakota corporation.
SECTION
2. Members. Membership in this
Association shall be unlimited in number and shall consist of such classes of
membership and with such membership fees as shall from time to time be
determined by the Board of Directors. The Board of Directors may provide for
non-transferable life memberships and classes of voting and non-voting
memberships, as the Board deems appropriate. Voting members must own or have
owned cattle registered by the Association. The Board of Directors shall
publish, in writing, the terms and conditions of membership (by class) from time
to time and shall enforce its policies so as to protect the Association and its
members. Members shall be those who adhere to the purposes of the Association.
The Board of Directors may decline or terminate membership to any person for
reasons it considers appropriate for the welfare of the corporation or the breed
of Highland cattle.
ARTICLE II
RIGHTS AND LIABILITIES OF DIRECTORS
SECTION
1. Property Interest of
Directors. No director of the
Association shall have any right, title or interest in or to any property or
assets of the Association either prior to or at the time of any liquidation or
dissolution of the Association, all of which properties and assets shall at the
time of any liquidation or dissolution vest in the 501(c) 3 Highland Cattle
Foundation.
SECTION
2. Non-Liabilities of Debts. The
private property of the directors shall be exempt from execution or other
liability for any debts of the Association, and no director shall be liable or
responsible for any debts or liabilities of the Association and are indemnified
for certain actions as set forth in Article XII herein.
ARTICLE III
BOARD OF DIRECTORS
SECTION
1. General Powers. The business
and affairs of the Association shall be managed by a Board of nine (9) elected
at large directors plus one regional director selected by each affiliated
regional association sanctioned by the national Association. The maximum number
of directors shall be twenty-one (21). All directors must be members in good
standing of the Association.
SECTION 2. At Large
Directors. There shall be three
classes of at large directors, of equal or nearly equal size, and the classes
shall be known as Class I, Class II, and Class III Directors. Three of the nine
at large directors referred to above shall be elected each year at the annual
meeting, terms to run for three years until election of their successors. After serving two consecutive
elected terms a director shall not be eligible for re-election for one year,
save as hereinafter provided.
SECTION 3. Nominations of Candidates. Candidates
for directors at large shall be nominated by a Nominations Committee. The
Nominations Committee shall be appointed by the Board of Directors upon
recommendation of the Governance Committee or upon its own motion, and shall
consist of at least three board members and up to three other active members in
the Association. All nominations shall be of persons that are willing to serve
the Association; whom will represent the Association, its members and the
Highland cattle breed with integrity; and whom will adhere to the purposes of
the Association consistent with the By-laws. In each fall and winter issue of The Bagpipe, a nomination form
shall be included so members at large may nominate a candidate(s) for the Board
of Directors at large for consideration by the Nominations Committee. These
nominations must be received by the Association prior to January 31st of the current election year. Nominees
for director at large must be active members of the Association and willing to
serve for at least three (3) years. The nominees shall be contacted and
interviewed by the Nominations Committee and the Nominations Committee shall be
given written acceptance by all candidates of their willingness to serve. The
Nominations Committee shall put forward at least two names for each open
position if possible. The candidates with the highest number of votes will fill
the open positions.
SECTION
4. Vacancies. Vacancies among at
large directors occurring between regular annual elections may be filled by
appointment by a majority of the other directors. The successor at large
director shall complete the term of the position vacated. Vacancies among
regional directors shall be filled by the region in which the vacancy occurs.
SECTION
5. Regional Directors. The regional associations
affiliated with AHCA shall have the right to nominate and elect a director from
its membership to serve on the Board of the Association. A regional director
must be a member in good standing of this Association. The term of a regional
director shall be for three years. After serving two consecutive three year
terms, a regional director shall not be eligible for re-election for one year.
The regional association shall advise the Association in writing, by way of a
certified copy of the regional association’s membership minutes, of its elected
representative who shall become a regional director.
SECTION 6. Removal
of Directors. Any director may be
removed with cause by the unanimous consent of the remaining board members. If
any director, at large or regional, be absent from more than two successive
regularly scheduled meetings of the Board, said absence not being excused by a
majority of the other directors, the remaining directors may declare his or her
position vacant. In the event a director is absent from three consecutive
(regular or special) meetings, or three out of four meetings (regular or
special) this shall cause the automatic removal of the director.
SECTION 7. Quorum. A majority of directors shall
constitute a quorum. The act of a majority of the directors present at the
meeting, at which a quorum is present, shall be the act of the Board, unless a
greater number is required by law or these By-laws. However, the directors may act without a
meeting if the action is approved
in writing, by facsimile, or by authenticated electronic signature.
SECTION 8. Meeting
Participation. Any member of the
AHCA who is not a director may attend board meetings. The Board may invite any
persons who are not directors to attend board meetings, with voice but without
vote.
SECTION 9. Directors Emeritus. Upon recommendation by the Nominations
Committee, or upon its own motion, the Board of Directors may elect one or more
Directors-Emeritus of the Association, with the right to attend all regular and
special meetings of the Board of Directors, or any committee of the Board of
Directors. Said Director(s) Emeritus shall have no power to make motions or to
vote, and shall not be counted as a director for purposes of quorum, and shall
not be required to be provided notices of any meeting.
SECTION 10. Compensation. Directors of the Association shall
receive no compensation but may be reimbursed for expenses, as approved by a
majority of the disinterested members of the Board of Directors from time to
time.
ARTICLE IV
ANNUAL MEETING OF MEMBERS
SECTION 1. Regular Annual Meeting. The
Secretary shall give at least thirty days written notice of the time, date and
location of the regular annual meeting of members, which meeting shall be held
once in each fiscal year, as determined by the President, in conjunction with
the annual convention whenever possible. The fiscal year shall be June 1st to May 31st. A quorum shall
consist of all members present. The members shall elect the at large directors,
and may fill any unfilled vacancies among the at large directors on the Board,
pass upon reports of the previous fiscal year, and transact such other business
as may come before them.
SECTION 2. Special Meetings. Special
meetings of members may be called by the President or by a majority of the Board
of Directors, on at least 30 days written notice by the Secretary. The notice
shall specify the time, date and place of meeting, and the purpose thereof and
be sent to all members. No business shall be transacted at such special meetings save that specified in the notice. A
quorum shall consist of those voting members present.
SECTION 3. Order of Business. The
order of business at any regular membership meeting and so far as possible at
all other meetings shall be as follows:
a.) Calling to order
and proof of quorum;
b.) Proof of Notice of
Meeting;
c.) Reading and action
on any unapproved minutes;
d.) Reports of officers
and committees;
e.) Unfinished
business;
f.) Acknowledgment of
regional directors and election of at large directors;
g.) New business; and
h.) Adjournment.
ARTICLE V
MEETINGS OF DIRECTORS
SECTION 1. Regular Annual Meeting. A
regular annual meeting of directors shall be held within 48 hours of the regular annual meeting of
members each year. The Board shall elect officers including: President, Vice
President, Secretary, and Treasurer, and such other officers as the Board of
Directors deems necessary, at this annual meeting. Notice shall be given to the
members of the officers elected, as soon as is practicable.
SECTION 2. Regular
Board Meetings. The Board of
Directors may provide by resolution the time and place for holding additional
regular meetings of the Board without other notice than the resolution, provided
that there be at least three such additional regular meetings of the Board
between the regular annual meetings of the Board. The Secretary shall notify the
directors of the time and place of said meetings.
SECTION 3. Special
Meetings. Special meetings of the
Board may be called by action of any three (3) members of the Board, or by the
President. The Secretary shall give at least 30 days written notice of special
meetings of the Board, unless this period is shortened by unanimous written
consent of all board members. Notices here and elsewhere, as to both members and
directors, shall be deemed given when deposited in the United States mail
addressed to the member or director at the last address shown on the records of
the Association. Any director may waive notice of any meeting, in writing. The
attendance of a director at any meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened. The business to be transacted at a special meeting
need not be specified in the Notice or the Waiver of Notice, unless otherwise
required by law, or elsewhere in these By-laws. Amending of these By-laws and
the Articles of Incorporation shall require specific notice of all proposed
changes and actions to be taken.
SECTION 4. Quorum. A majority of the members of the Board
shall constitute a quorum, provided that if less than a majority of the
directors become present at said meeting, a majority of the directors present
may adjourn the meeting from time to time. The Secretary shall notify any absent
director and the Board of the time and place of such adjourned meeting. 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.
SECTION 5. Meetings by Telephone, Videoconference or Other Electronic Means. Directors may participate in Board or
committee meetings, if the meeting is designated as a teleconference meeting by
the President or the appropriate committee chair at the time the meeting is
called, by conference telephone, videoconferencing, or other similar
communications equipment, through which all persons participating in the meeting
can hear each other at the same time. Participation in a meeting pursuant to
this section constitutes presence in person at the meeting and such persons
shall be counted for quorum purposes. Any form of participation in a meeting
allowed by South Dakota law, now or in the future, shall be allowed by these
By-laws.
SECTION 6. Consent Actions. Any
action required or permitted to be taken pursuant to authorization of the Board
may be taken without a meeting if, before or after the action, all directors
consent to the action in writing. Written consents shall be filed with the
minutes of the Board’s proceeding.
SECTION 7. Committees. There
shall be standing committees of the Board of Directors as follows: Finance &
Audit; Show; Governance; and Breed Protection & Promotion. The Board of
Directors may establish, from
time to time, such other committees as it sees fit for a duration it deems appropriate. The President shall
appoint a chairman of each committee. Said chairperson shall report to the Board
with respect to the subject matters of his or her committee. The chairperson and
members of each committee shall establish their own meeting schedules.
SECTION 8. Executive Committee. The
Executive Committee shall consist of the current President, Vice President, and
the chair of the Finance & Audit Committee, as established by the Board from
time to time. All members shall serve during the term of the current President
and all shall be voting members of the committee. Any actions taken by the
Executive Committee shall be reported to the Board as a whole at the next
regular meeting or special meeting. The Executive Committee may only commit the
Association to an expenditure of $5,000.00 or less without Board approval,
unless such expenditure was previously acted upon by the Board. The Executive
Committee shall not be able to change or impose rules and regulations or make
changes to the approved budgets or the By-laws. The Executive Committee may also
deal with those tasks assigned by the Board and handle personnel matters on an
ongoing basis, subject to review of the Board.
ARTICLE VI
OFFICERS
SECTION
1. The principal officers of the
Association shall be President, Vice President, Secretary, Treasurer, and such
other officers as the Board may from time to time direct. The Secretary and
Treasurer may be the same person. The President, Vice President, Secretary and
Treasurer shall be members of the Board.
SECTION
2. Nomination of Candidates. Candidates
for directors at large shall be nominated by a Nominations Committee, the
Governance Committee, or any member of the Board. The Nominations Committee
shall be appointed by the Board of Directors upon recommendation of the
Governance Committee or upon its own motion, and shall consist of at least three
board members and up to three other active members in the Association. All
nominations shall be of persons that are willing to serve the Association; whom
will represent the Association, its members and the Highland cattle breed with
integrity; and whom will adhere to the purposes of the Association consistent
with these By-laws. In each fall and winter issue of The Bagpipe, a nomination form
shall be included so members at large may nominate a candidate(s) for the Board
of Directors at large for consideration by the Nominations Committee. These
nominations must be received by the Association prior to January 31st of the current election year. Nominees
for director at large must be active members of the Association and willing to
serve for at least three (3) years. The nominees shall be contacted and
interviewed by the Nominations Committee and the Nominations Committee shall be
given written acceptance by all candidates of their willingness to serve. The
Nominations Committee shall put forward at least two names for each open
position if possible. The candidates with the highest number of votes will fill
the open positions.
SECTION
3. Election and Terms. The
President, Vice President, Secretary and Treasurer shall be elected at the
regular annual meeting of the Board of Directors. The President and Vice
President may each serve a single two year term until their successors are
elected. The Secretary and Treasurer shall be elected by the Board for a term of
two years. The Secretary and Treasurer may serve up to three terms or as long as
they are eligible to be on the Board, whichever amount of time is shorter.
Assistant Secretaries, Assistant Treasurers, and other officers the Board may
elect from time to time may serve at the pleasure of the Board of Directors,
without limit of terms. In the event of any vacancy that may occur by reason of
expiration of term, death, incapacity, removal or resignation, the vacancy shall
be filled by the vote of a majority of the Board. Any and all officers of the
Association may be removed by the majority vote of the Board.
SECTION
4. President. The President shall be a member of the
Board and shall:
a.) be the principal
executive officer of the Association and, unless otherwise determined by the
members of the Board, shall preside at all meetings of the members of the Board.
b.) sign any deeds,
mortgages, deeds of trust, notes, bonds, contracts or other instruments
authorized by the Board to be executed, except in cases in which the signing and
execution thereof shall be expressly delegated by the Board or by these By-laws
to some other officer or agent of the Association, or shall be required by law
to be otherwise signed or executed;
c.) perform, all duties
incident to the office of the President and such other duties as may be
prescribed by the Board from time to time; and
d.) cast a vote only
to break ties and may not make or move motions.
SECTION
5. Vice President. The Vice
President shall be a member of the Board and shall perform the duties of the
President in the absence of the President from the country or from any meeting
of the Association or Board of Directors, or in case of the inability of the
President to act for any reason whatsoever, until such absence or inability to
act has terminated.
SECTION
6. Secretary. The Secretary shall be a member
of the Board and shall:
a.) perform all duties
incident to the office of Secretary, and such other duties as from time to time
may be assigned to him or her by the Board; and
b.) act as Secretary
when there are statutory or other matters of legal procedure that require the
action of an elected Secretary.
SECTION
7. Treasurer. The
Treasurer shall be a member of the Board and shall:
a.) have charge and
keep custody of and be responsible for any disbursement from the money market or
security funds of the Association;
b.) review all receipts and issuances of
receipts for all moneys due and payable to the Association from whatever source,
and for prompt deposit of all such moneys in the name of the Association in such
bank or banks as shall be selected in accordance with these By-laws;
c.) review monthly income and expense reports and bank reconciliation reports as
forwarded by the Operations Manager on a monthly basis and transfer money
between accounts;
d.) assist independent auditors in conducting their audit or review of the
Association’s books and records;
e.) present a Treasurer’s Report at the annual convention, board meetings, in
the Association publication and any other venue that may be appropriate; and
f.) perform all the duties incidental to the office of Treasurer and such other
duties as may be assigned from time to time by the Board.
SECTION 8. Operations Manager. An
Operations Manager may be appointed and/or be hired by the Board of Directors to
serve at the pleasure of the Board. He or she shall receive such compensation as
the Board of Directors shall from time to time determine. The Board may
increase, decrease, reassign or otherwise delegate the duties provided under
this section, as it deems necessary.
A. The Operations Manager shall hold the position of Assistant Secretary and
shall assist the Secretary of the Association in the performance of the
following duties:
i.) take and maintain
the minutes of meetings of Association members and of the Board in one or more
books provided for that purpose;
ii.) see that all notices are duly given in accordance with these By-laws or as
required by law;
iii.) be custodian of the Association records and of the seal of the Association
and affix the seal of the Association to documents, the execution of which on
behalf of the Association under its seal is duly authorized in accordance with
the provisions of these By-laws;
iv.) keep a register of the names and addresses of all members; and
v.) keep on file at all
times a complete copy of the Articles of Incorporation and By-laws of the
Association containing all amendments thereto which copy shall always be open to
the inspection of any director or member and at the expense of the Association
forward a copy of the By-laws and of all amendments thereto to each director or
member.
B. The
Operations Manager shall also hold the position of Assistant Treasurer and shall
assist the Treasurer of the Association in the performance of the following
duties:
i.) have charge and custody of and be responsible for all funds and securities
of the Association;
ii.) be responsible for the receipt of and issuance of receipts for all moneys
due and payable to the Association from whatever source, and for prompt deposit
of all such moneys in the name of the Association in such bank or banks as shall
be selected in accordance with these By-laws;
iii.) be responsible for all disbursements of the Association consistent with
budgets adopted by the Board from appropriate accounts;
iv.) assist independent auditors in conducting their audit or review of the
books provided for that purpose;
v.) may have charge of the property of the Association, and in the performance
of his or her duties but shall at all times be responsible to the President and
Board of Directors;
vi.) may see that the property and liabilities of the Association are fully
protected by insurance, the amount thereof to be approved by the Board of
Directors;
vii.) shall deposit or cause to be deposited the Association’s funds and
securities with such depositories and custodians as the Board of Directors may
from time to time designate;
viii.) shall be responsible for the receipt and recording of all funds, pay duly
authorized bills, make financial reports at meetings of the Association; and
ix.) may give a surety bond, written by a corporate surety approved by the Board
of Directors, for the faithful performance of his or her duties, the expense of
which bond shall be borne by the Association.
C. The Operations Manager shall maintain the Association’s breed registry and shall:
i.) issue or cause to be issued all certificates of registration, transfers,
gain certification, F-1 certificate of registration, certificate of pedigree,
embryo transplant registration, AI certificate of registration or other
certifications which may be required by the rules and regulations from time to
time adopted by the Board; and
ii.) perform such other
duties as may from time to time be assigned to maintain the accuracy and
integrity of the breed registry and shall at all times be responsible to the
President and Board of Directors.
SECTION 9. Assistant
Operations Manager. An Assistant
Operations Manager may be appointed by the Board of Directors to serve at the
pleasure of the Board. In the event of inability of the Operations Manager to
serve for any reason, such Assistant Operations Manager may perform all the
duties of the Operations Manager for such period of inability to serve of the
Manager and, in addition thereto, such Assistant Operations Manager shall
perform such other duties as may from time to time be assigned by the Operations
Manager or by the Board. He or she shall receive such compensation as the Board
of Directors shall from time to time determine
SECTION
10. Bonds. The Board may require any agent of the
Association to give bond in such sum and with such surety, as it shall
determine.
SECTION 11. Compensation. When
authorized by the Board, a person shall be reasonably compensated for services
rendered to the Association as an officer, director, employee, or independent
contractor, except where otherwise prohibited by these By-laws. Officers and directors
may be reimbursed for their reasonable out of pocket expenses. The Association
shall follow its conflict of interest policy, consistent with Internal Revenue
Service regulations, when determining such compensation or reimbursement.
ARTICLE VII
NON-PROFIT OPERATION
The Association shall at all times be operated on a not-for-profit basis, and no
interest or dividends shall be paid or payable by the Association to any
director as such and shall be operated for the purposes for which said
association was created.
ARTICLE VIII
FINANCIAL TRANSACTIONS
SECTION
1. Contracts. Except
as otherwise provided in these By-laws, the Board may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name and on behalf of the Association and such authority may
be general or confined to specific instances.
SECTION
2. Checks, Drafts. Etc. All checks, drafts or other orders for
payment of money, and all notes, bonds or other evidences of indebtedness issued
in the name of the Association shall be signed by such officers, agent or
agents, employee or employees of the Association and in such manner as shall
from time to time be determined by resolution of the Board.
SECTION
3. Deposits. All funds of the
Association shall be deposited from time to time to the credit of the
Association in such financial institution or institutions as the Treasurer may
select subject to the Board’s approval.
SECTION
4. Fiscal Year. The fiscal year
of the Association shall begin on the first day of June of each and every such
year and shall end on the last day of May of each and every year except as
otherwise provided by resolution of the Board.
ARTICLE IX
MISCELLANEOUS
SECTION
1. Waiver of Notice. Any director
may waive in writing any notice of a meeting required to be given by these
By-laws. The attendance of a director at any meeting shall constitute a waiver
of notice of such meeting by such director except in case a director shall
attend a meeting for the express purpose of objecting to the transaction of any
business on the grounds that the meeting has not been lawfully called or
convened.
SECTION
2. Rules and
Regulations. The Board shall have
power to make and adopt such rules and regulations not inconsistent with law,
the Articles of Incorporation or these By-laws as it may deem advisable for the
management of the business and affairs of the Association. The
Board of Directors shall adopt and publish from time to time, rules and criteria
concerning membership in the Association, including membership fees. In
addition, it shall adopt and publish from time to time, rules and regulations
concerning the registration of Highland cattle and fees to be charged for such
registration. The Board shall also adopt any and all policies and procedures as
may be required by the laws and/or regulations of any state or the United States
government, to which the Association is subject.
ARTICLE X
VOTING BY MAIL
Absentee ballots may be used by members choosing not to attend the annual
meeting or special meetings of the membership. Such ballots are for the purpose
of expressing the member’s preferences on candidates for the Board of Directors,
for changes to the Articles of Incorporation, changes to the By-laws and for
other issues set forth in writing and provided to the membership in advance of
the meeting pursuant to the notice requirements for said meeting, set forth
herein. Absentee ballots may not be given for unspecified business or actions
that come before the membership. Absentee ballots will be counted along with the
ballots of those in attendance. Absentee ballots must be postmarked no later
than the Friday two weeks prior to the start of the week in which the meeting or
election is held. Ballots will be opened and counted the day of the annual or
special meeting with the ballots cast at the election.
ARTICLE XI
AMENDMENTS
These By-laws may be amended by two thirds of the directors at any regular or
special meeting of directors, if written notice of no less than 30 days is
provided of such meeting, and shall have contained a copy of the proposed
amendment and the rationale for the amendment. Only the members of the
Association may amend the By-laws in any way that would vary the terms or method
of selection of directors. Furthermore, Articles I and VII may only be amended
by a vote of two thirds of the vote of members of the Association.
ARTICLE XII
INDEMNIFICATION
SECTION
1. Non-derivative
Actions. Subject to all of the
other provisions of this article, the Association shall indemnify any person who
was or is a party, or is threatened to be made a party to, any threatened,
pending, or completed action, suit, or proceeding. This includes any civil,
criminal, administrative, or investigative proceeding, whether formal or
informal (other than an action by or in the right of the Association). Such
indemnification shall apply to all persons described in the indemnification
provisions set forth in the Articles of Incorporation of the Association. Said
persons covered include, but are not necessarily limited to: any person who was
or is a director or officer of the Association or who was or is serving at the
request of the Association as a director, officer, partner, trustee, employee,
or agent of another foreign or domestic Association, partnership, joint venture,
trust, or other enterprise, whether for profit or not for profit; or, all other
non-director or non-officer volunteers serving the Association, subject to the
conditions set forth in Section 2 below. The person shall be indemnified and
held harmless against expenses (including attorney fees), judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit, or proceeding, if the person acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Association. With respect to any criminal
action or proceeding, the person must have had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, or conviction or on a plea of nolo contendere or its equivalent, shall not by itself
create a presumption that (a) the person did not act in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the Association, or (b) with respect to any criminal action or
proceeding, the person had reasonable cause to believe that his or her conduct
was unlawful.
SECTION 2. Derivative
Actions. Subject to all of the
provisions of this article, the Association shall indemnify any person who was
or is a party to, or is threatened to be made a party to, any threatened,
pending, or completed action or suit by or in the right of the Association to
procure a judgment in its favor because (a) the person was or is a director or
officer of the Association, or (b) the person was or is serving at the request
of the Association as a director, officer, partner, trustee, employee, or agent
of another foreign or domestic Association, partnership, joint venture, trust,
or other enterprise, whether or not for profit, or (c) was or is a volunteer of
the Association and if all of the following are met:
a.) The volunteer was
acting or reasonably believed he or she was acting within his or herauthority;
and,
b.) The
volunteer was acting in good faith; and,
c.) The volunteer’s
conduct was not an intentional tort; and,
d.) The volunteer’s
conduct was not a tort arising out of the ownership, maintenance, or use of a
motor vehicle for which tort liability may be imposed as provided in laws of
South Dakota.
The person shall be indemnified and held harmless against expenses (including
actual and reasonable attorney fees) and amounts paid in settlement incurred by
the person in connection with such action or suit if the person acted in good
faith and in a manner the person reasonably believed to be in or not opposed to
the best interests of the Association. However, indemnification shall not be
made for any claim, issue, or matter in which the person has been found liable
to the Association unless and only to the extent that the court in which such
action or suit was brought has determined on application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnification for the expenses
that the court considers proper.
SECTION 3. Expenses
of Successful Defense. To the
extent that a person has been successful on the merits or otherwise in defense
of any action, suit, or proceeding referred to in Section 1 or Section 2 of this
article, or in defense of any claim, issue, or matter in the action, suit, or
proceeding, the person shall be indemnified against expenses (including actual
and reasonable attorney fees) incurred in connection with the action and in any
proceeding brought to enforce the mandatory indemnification provided by this
article.
SECTION 4. Contract
Right: Limitation on Indemnity. The
right to indemnification conferred in this article shall be a contractual right
and shall apply to services of a director or officer as an employee or agent of
the Association as well as in such person’s capacity as a director or officer.
Except as provided in Section 3 of this article, the Association shall have no
obligations under this article to indemnify any person in connection with any
proceeding, or part thereof, initiated by such person without authorization by
the Board of Directors.
SECTION
5. Determination that
Indemnification is Proper. Any
indemnification under Sections 1 or 2 of this article (unless ordered by a
court) shall be made by the Association only as authorized in the specific case.
The Association must determine that indemnification of the person is proper in
the circumstances because the person has met the applicable standard of conduct
set forth in Section 1 or Section 2 herein, whichever is applicable. Such
determination shall be made in any of the following ways:
a.) by a majority of a quorum of the Board consisting of directors who were not
parties to such action, suit, or proceeding;
b.) if the quorum described in clause (a) above is not obtainable, then by a
committee of directors who are not parties to the action, the committee shall
consist of not less than two disinterested directors; or
c.) by independent legal counsel in a written opinion.
SECTION 6. Proportionate
Indemnity. If a person is entitled to
indemnification under Section 1 or Section 2 of this article for a portion of
expenses, including attorney fees, judgments, penalties, fines, and amounts paid
in settlement, but not for the total amount, the Association shall indemnify the
person for the portion of the expenses, judgments, penalties, fines, or amounts
paid in settlement for which the person is entitled to be indemnified.
SECTION 7. Expense
Advance. Expenses incurred in defending a civil
or criminal action, suit, or proceeding described in Section 1 or Section 2 of
this article may be paid by the Association in advance of the final disposition
of the action, suit, or proceeding, on receipt of an undertaking by or on behalf
of the person involved to repay the expenses, if it is ultimately determined
that the person is not entitled to be indemnified by the Association. The
undertaking shall be an unlimited general obligation of the person on whose
behalf advances are made, but need not be secured.
SECTION 8. Non-exclusivity
of Rights. The indemnification or advancement of
expenses provided under this article is not exclusive of other rights to which a
person seeking indemnification or advancement of expenses may be entitled under
a contractual arrangement with the Association. However, the total amount of
expenses advanced or indemnified from all sources combined shall not exceed the
amount of actual expenses incurred by the person seeking indemnification or
advancement of expenses.
SECTION 9. Indemnification of Employees and Agents of the Association. The Association may, to the extent
authorized from time to time by the Board, grant rights to indemnification and
to the advancement of expenses to any employee or agent of the Association to
the fullest extent of the provisions of this article with respect to the
indemnification and advancement of expenses of directors and officers of the
Association.
SECTION
10. Former Directors
and Officers. The indemnification
provided in this article continues for a person who has ceased to be a director
and/or officer and shall inure to the benefit of the heirs, executors, and
administrators of that person.
SECTION 11. Insurance. The Association may purchase and
maintain insurance on behalf of any person who (a) was or is a director,
officer, employee, or agent of the Association, or (b) was or is serving at the
request of the Association as a director, officer, employee, or agent of another
Association, partnership, joint venture, trust, or other enterprise. Such
insurance may protect against any liability asserted against the person and
incurred by him or her in any such capacity or arising out of his or her status
as such, whether or not the Association would have power to indemnify against
such liability under this article or the laws of the State of South Dakota.
SECTION 12. Changes in
Law. If there are any changes in the
statutory provisions applicable to the Association and relating to the subject
matter of this article, then the indemnification to which any person shall be
entitled shall be determined by such changed provisions, but only to the extent
that any such change permits the Association to provide broader indemnification
rights than such provisions permitted the Association to provide before any such
change.
It is hereby certified that the Membership of the Association approved these
Amended and Restated Bylaws of the Association at the Annual Meeting of Members,
held on June 20, 2009 in Bozeman, Montana.
____________________________
John M. McLaughlin, Jr.
Assistant
Secretary
American
Scotch Highland Breeder’s Association