Amended in Assembly May 9, 2013

Amended in Assembly April 10, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 491


Introduced by Assembly Member Torres

February 19, 2013


An act to amend Sections 207, 212, 5140, 5151, 7140, 7151, 9140, and 9151 of the Corporations Code, relating to corporations.

LEGISLATIVE COUNSEL’S DIGEST

AB 491, as amended, Torres. Corporations: bylaws: emergency powers.

Existing law authorizes and regulates the formation and operation of a corporation, nonprofit public benefit corporation, nonprofit mutual benefit corporation, or nonprofit religious corporation, including, but not limited to, the adoption and contents of corporate bylaws.

This bill would authorize a corporation, nonprofit public benefit corporation, nonprofit mutual benefit corporation, or nonprofit religious corporation to take actions during an emergency, as defined, to conduct these corporations’ ordinary business operations and affairs, as specified, and provide that any action taken in good faith during an emergency under this authorization would bind these corporations and not be a basis to impose liability on a corporate director, officer, employee, or agent. This bill would also authorize a corporation, nonprofit public benefit corporation, nonprofit mutual benefit corporation, or nonprofit religious corporation to adopt bylaws to further direct the operations of these corporations during an emergency, as specified.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 207 of the Corporations Code is amended
2to read:

3

207.  

Subject to any limitations contained in the articles and to
4compliance with other provisions of this division and any other
5applicable laws, a corporation shall have all of the powers of a
6natural person in carrying out its business activities, including,
7without limitation, the power to:

8(a) Adopt, use and at will alter a corporate seal, but failure to
9affix a seal does not affect the validity of any instrument.

10(b) Adopt, amend and repeal bylaws.

11(c) Qualify to do business in any other state, territory,
12dependency or foreign country.

13(d) Subject to the provisions of Section 510, issue, purchase,
14redeem, receive, take or otherwise acquire, own, hold, sell, lend,
15exchange, transfer or otherwise dispose of, pledge, use and
16otherwise deal in and with its own shares, bonds, debentures and
17other securities.

18(e) Make donations, regardless of specific corporate benefit, for
19the public welfare or for community fund, hospital, charitable,
20educational, scientific, civic or similar purposes.

21(f) Pay pensions, and establish and carry out pension,
22profit-sharing, share bonus, share purchase, share option, savings,
23thrift and other retirement, incentive and benefit plans, trusts and
24provisions for any or all of the directors, officers and employees
25of the corporation or any of its subsidiary or affiliated corporations,
26and to indemnify and purchase and maintain insurance on behalf
27of any fiduciary of such plans, trusts or provisions.

28(g) Subject to the provisions of Section 315, assume obligations,
29enter into contracts, including contracts of guaranty or suretyship,
30incur liabilities, borrow and lend money and otherwise use its
31credit, and secure any of its obligations, contracts or liabilities by
32mortgage, pledge or other encumbrance of all or any part of its
33property, franchises and income.

34(h) Participate with others in any partnership, joint venture or
35other association, transaction or arrangement of any kind, whether
P3    1or not such participation involves sharing or delegation of control
2with or to others.

3(i) (1) In advance of or during an emergency, take any or all
4of the following actions necessary to conduct the corporation’s
5ordinary business operations and affairs during an emergency,
6unless emergency bylaws provide otherwise pursuant to subdivision
7(c) of Section 212:

8(A) Modify lines of succession to accommodate the incapacity
9of any director, officer, employee, or agent resulting from the
10emergency.

11(B) Relocate the principal office, designate alternative principal
12offices or regional offices, or authorize the officers to do so.

13(C) Give notice to a director or directors in any practicable
14manner under the circumstances, including, but not limited to, by
15publication and radio, when notice of a meeting of the board cannot
16be given to that director or directors in the manner prescribed by
17the bylaws or Section 307.

18(D) Deem that one or more officers of the corporation present
19at a board meeting is a director, in order of rank and within the
20same rank in order of seniority, as necessary to achieve a quorum
21for that meeting.

22(2) During an emergency, the board may not take any action
23that requires the vote of the shareholders or is not in the
24corporation’s ordinary course of business, unless the required vote
25of the shareholders was obtained prior to the emergency.

26(3) Any actions taken in good faith during an emergency under
27this subdivision binds the corporation and may not be used to
28impose liability on a corporate director, officer, employee, or agent.

29(4) For purposes of this subdivision, “emergency” means any
30of the following events or circumstances as a result of whichbegin insert, and
31only so long as,end insert
a quorum of the corporation’s board of directors
32cannot be readily convened for action:

33(A) A natural catastrophe, including, but not limited to, a
34hurricane, tornado, storm, high water, wind-driven water, tidal
35wave, tsunami, earthquake, volcanic eruption, landslide, mudslide,
36snowstorm, or drought, or, regardless of cause, any fire, flood, or
37explosion.

38(B) An attack on this state or nation by an enemy of the United
39States of America, or upon receipt by this state of a warning from
P4    1the federal government indicating that an enemy attack is probable
2or imminent.

3(C) An act of terrorism or other manmade disaster that results
4in extraordinary levels of casualties or damage or disruption
5severely affecting the infrastructure, environment, economy,
6government functions, or population, including, but not limited
7to, mass evacuations.

8(D) A state of emergency proclaimed by the Governor.

9

SEC. 2.  

Section 212 of the Corporations Code is amended to
10read:

11

212.  

(a) The bylaws shall set forth (unless such provision is
12contained in the articles, in which case it may only be changed by
13an amendment of the articles) the number of directors of the
14corporation; or that the number of directors shall be not less than
15a stated minimum nor more than a stated maximum (which in no
16case shall be greater than two times the stated minimum minus
17one), with the exact number of directors to be fixed, within the
18limits specified, by approval of the board or the shareholders
19(Section 153) in the manner provided in the bylaws, subject to
20paragraph (5) of subdivision (a) of Section 204. The number or
21minimum number of directors shall not be less than three; provided,
22however, that (1) before shares are issued, the number may be one,
23(2) before shares are issued, the number may be two, (3) so long
24as the corporation has only one shareholder, the number may be
25one, (4) so long as the corporation has only one shareholder, the
26number may be two, and (5) so long as the corporation has only
27two shareholders, the number may be two. After the issuance of
28shares, a bylaw specifying or changing a fixed number of directors
29or the maximum or minimum number or changing from a fixed to
30a variable board or vice versa may only be adopted by approval
31of the outstanding shares (Section 152); provided, however, that
32a bylaw or amendment of the articles reducing the fixed number
33or the minimum number of directors to a number less than five
34cannot be adopted if the votes cast against its adoption at a meeting
35or the shares not consenting in the case of action by written consent
36are equal to more than 1623 percent of the outstanding shares
37entitled to vote.

38(b) The bylaws may contain any provision, not in conflict with
39law or the articles for the management of the business and for the
P5    1conduct of the affairs of the corporation, including but not limited
2to:

3(1) Any provision referred to in subdivision (b), (c) or (d) of
4Section 204.

5(2) The time, place and manner of calling, conducting and giving
6notice of shareholders’, directors’ and committee meetings.

7(3) The manner of execution, revocation and use of proxies.

8(4) The qualifications, duties and compensation of directors;
9the time of their annual election; and the requirements of a quorum
10for directors’ and committee meetings.

11(5) The appointment and authority of committees of the board.

12(6) The appointment, duties, compensation and tenure of
13officers.

14(7) The mode of determination of holders of record of its shares.

15(8) The making of annual reports and financial statements to
16the shareholders.

17(c) (1) The bylaws may contain any provision, not in conflict
18with the articles, to manage and conduct the ordinary business
19affairs of the corporation effective only in an emergency as defined
20in Section 207, including, but not limited to, procedures for calling
21a board meeting, quorum requirements for a board meeting, and
22designation of additional or substitute directors.

23(2) During an emergency, the board may not take any action
24that requires the vote of the shareholders or otherwise is not in the
25corporation’s ordinary course of business, unless the required vote
26of the shareholders was obtained prior to the emergency.

27(3) All provisions of the regular bylaws consistent with the
28emergency bylaws shall remain effective during the emergency,
29and the emergency bylaws shall not be effective after the
30emergency ends.

31(4) Corporate action taken in good faith in accordance with the
32emergency bylaws binds the corporation, and may not be used to
33impose liability on a corporate director, officer, employee, or agent.

34

SEC. 3.  

Section 5140 of the Corporations Code is amended to
35read:

36

5140.  

Subject to any limitations contained in the articles or
37bylaws and to compliance with other provisions of this division
38and any other applicable laws, a corporation, in carrying out its
39activities, shall have all of the powers of a natural person,
40including, without limitation, the power to:

P6    1(a) Adopt, use, and at will alter a corporate seal, but failure to
2affix a seal does not affect the validity of any instrument.

3(b) Adopt, amend, and repeal bylaws.

4(c) Qualify to conduct its activities in any other state, territory,
5dependency or foreign country.

6(d) Issue, purchase, redeem, receive, take or otherwise acquire,
7own, sell, lend, exchange, transfer or otherwise dispose of, pledge,
8use and otherwise deal in and with its own bonds, debentures,
9notes and debt securities.

10(e) Issue memberships.

11(f) Pay pensions, and establish and carry out pension, deferred
12compensation, saving, thrift and other retirement, incentive and
13benefit plans, trusts and provisions for any or all of its directors,
14officers, employees, and persons providing services to it or any of
15its subsidiary or related or associated corporations, and to
16indemnify and purchase and maintain insurance on behalf of any
17fiduciary of such plans, trusts, or provisions.

18(g) Levy dues, assessments, and admission fees.

19(h) Make donations for the public welfare or for community
20funds, hospital, charitable, educational, scientific, civic, religious
21or similar purposes.

22(i) Assume obligations, enter into contracts, including contracts
23of guarantee or suretyship, incur liabilities, borrow or lend money
24or otherwise use its credit, and secure any of its obligations,
25contracts or liabilities by mortgage, pledge or other encumbrance
26of all or any part of its property and income.

27(j) Participate with others in any partnership, joint venture or
28other association, transaction or arrangement of any kind whether
29or not such participation involves sharing or delegation of control
30with or to others.

31(k) Act as trustee under any trust incidental to the principal
32objects of the corporation, and receive, hold, administer, exchange,
33and expend funds and property subject to such trust.

34(l) Carry on a business at a profit and apply any profit that results
35from the business activity to any activity in which it may lawfully
36engage.

37(m) Pay the reasonable value of services rendered in this state
38to the corporation before January 1, 1975, and not previously paid,
39by any person who performed such services on a full-time basis
40under the direction of a religious organization in connection with
P7    1the religious tenets of the organization. Such person shall have
2relied solely on the religious organization for his or her financial
3support for a minimum of five years. A payment shall not be made
4if such person or religious organization waives the payment or
5receipt of compensation for such services in writing. Payment may
6be made to such religious organization to reimburse it for
7maintenance of any person who rendered such services and to
8 assist it in providing future support and maintenance; however,
9payment shall not be made from any funds or assets acquired with
10funds donated by or traceable to gifts made to the corporation by
11any person, organization or governmental agency other than the
12members, immediate families of members and affiliated religious
13organizations of the religious organization under whose direction
14the services were performed.

15(n) (1) In advance of or during an emergency, take any or all
16of the following actions necessary to conduct the corporation’s
17ordinary business operations and affairs during an emergency,
18unless emergency bylaws provide otherwise pursuant to subdivision
19(g) of Section 5151:

20(A) Modify lines of succession to accommodate the incapacity
21of any director, officer, employee, or agent resulting from the
22emergency.

23(B) Relocate the principal office, designate alternative principal
24offices or regional offices, or authorize the officers to do so.

25(C) Give notice to a director or directors in any practicable
26manner under the circumstances, including, but not limited to, by
27publication and radio, when notice of a meeting of the board cannot
28be given to that director or directors in the manner prescribed by
29the bylaws or Section 5211.

30(D) Deem that one or more officers of the corporation present
31at a board meeting is a director, in order of rank and within the
32same rank in order of seniority, as necessary to achieve a quorum
33for that meeting.

34(2) During an emergency, the board may not take any action
35that requires the vote of the shareholders or is not in the
36corporation’s ordinary course of business, unless the required vote
37of the shareholders was obtained prior to the emergency.

38(3) Any actions taken in good faith during an emergency under
39this subdivision binds the corporation and may not be used to
40impose liability on a corporate director, officer, employee, or agent.

P8    1(4) For purposes of this subdivision, “emergency” means any
2of the following events or circumstances as a result of whichbegin insert, and
3only so long as,end insert
a quorum of the corporation’s board of directors
4cannot be readily convened for action:

5(A) A natural catastrophe, including, but not limited to, a
6hurricane, tornado, storm, high water, wind-driven water, tidal
7wave, tsunami, earthquake, volcanic eruption, landslide, mudslide,
8snowstorm, or drought, or, regardless of cause, any fire, flood, or
9explosion.

10(B) An attack on this state or nation by an enemy of the United
11States of America, or upon receipt by this state of a warning from
12the federal government indicating that an enemy attack is probable
13or imminent.

14(C) An act of terrorism or other man-made disaster that results
15in extraordinary levels of casualties or damage or disruption
16severely affecting the infrastructure, environment, economy,
17government functions, or population, including, but not limited
18to, mass evacuations.

19(D) A state of emergency proclaimed by the Governor.

20

SEC. 4.  

Section 5151 of the Corporations Code is amended to
21read:

22

5151.  

(a) The bylaws shall set forth (unless that provision is
23contained in the articles, in which case it may only be changed by
24an amendment of the articles) the number of directors of the
25corporation, or the method of determining the number of directors
26of the corporation, or that the number of directors shall be not less
27than a stated minimum nor more than a stated maximum with the
28exact number of directors to be fixed, within the limits specified,
29by approval of the board or the members (Section 5034), in the
30manner provided in the bylaws, subject to subdivision (e). The
31number or minimum number of directors may be one or more.

32(b) Once members have been admitted, a bylaw specifying or
33changing a fixed number of directors or the maximum or minimum
34number or changing from a fixed to a variable board or vice versa
35may only be adopted by approval of the members (Section 5034).

36(c) The bylaws may contain any provision, not in conflict with
37law or the articles, for the management of the activities and for
38the conduct of the affairs of the corporation, including but not
39limited to:

40(1) Any provision referred to in subdivision (c) of Section 5132.

P9    1(2) The time, place and manner of calling, conducting and giving
2notice of members’, directors’ and committee meetings, or of
3conducting mail ballots.

4(3) The qualifications, duties and compensation of directors;
5the time of their election; and the requirements of a quorum for
6directors’ and committee meetings.

7(4) The appointment and authority of committees.

8(5) The appointment, duties, compensation and tenure of
9officers.

10(6) The mode of determination of members of record.

11(7) The making of reports and financial statements to members.

12(8) Setting, imposing and collecting dues, assessments and
13admission fees.

14(d) The bylaws may provide for the manner of admission,
15withdrawal, suspension, and expulsion of members, consistent
16with the requirements of Section 5341.

17(e) The bylaws may require, for any or all corporate actions
18(except as provided in paragraphs (1) and (2) of subdivision (a) of
19Section 5222, subdivision (c) of Section 5616, and Section 6610),
20the vote of a larger proportion of, or all of, the members or the
21members of any class, unit, or grouping of members, or the vote
22of a larger proportion of, or all of, the directors, than is otherwise
23required by this part. Such a provision in the bylaws requiring such
24greater vote shall not be altered, amended or repealed except by
25such greater vote, unless otherwise provided in the bylaws.

26(f) The bylaws may contain a provision limiting the number of
27members, in total or of any class, which the corporation is
28authorized to admit.

29(g) (1) The bylaws may contain any provision, not in conflict
30with the articles, to manage and conduct the ordinary business
31affairs of the corporation effective only in an emergency as defined
32in Section 5140, including, but not limited to, procedures for calling
33a board meeting, quorum requirements for a board meeting, and
34designation of additional or substitute directors.

35(2) During an emergency, the board may not take any action
36that requires the vote of the shareholders or otherwise is not in the
37corporation’s ordinary course of business, unless the required vote
38of the shareholders was obtained prior to the emergency.

39(3) All provisions of the regular bylaws consistent with the
40emergency bylaws shall remain effective during the emergency,
P10   1and the emergency bylaws shall not be effective after the
2emergency ends.

3(4) Corporate action taken in good faith in accordance with the
4emergency bylaws binds the corporation, and may not be used to
5impose liability on a corporate director, officer, employee, or agent.

6

SEC. 5.  

Section 7140 of the Corporations Code is amended to
7read:

8

7140.  

Subject to any limitations contained in the articles or
9bylaws and to compliance with other provisions of this division
10and any other applicable laws, a corporation, in carrying out its
11activities, shall have all of the powers of a natural person,
12including, without limitation, the power to:

13(a) Adopt, use, and at will alter a corporate seal, but failure to
14affix a seal does not affect the validity of any instrument.

15(b) Adopt, amend, and repeal bylaws.

16(c) Qualify to conduct its activities in any other state, territory,
17dependency or foreign country.

18(d) Issue, purchase, redeem, receive, take or otherwise acquire,
19own, sell, lend, exchange, transfer or otherwise dispose of, pledge,
20use and otherwise deal in and with its own memberships, bonds,
21debentures, notes and debt securities.

22(e) Pay pensions, and establish and carry out pension, deferred
23compensation, saving, thrift and other retirement, incentive and
24benefit plans, trusts and provisions for any or all of its directors,
25officers, employees, and persons providing services to it or any of
26its subsidiary or related or associated corporations, and to
27indemnify and purchase and maintain insurance on behalf of any
28fiduciary of such plans, trusts, or provisions.

29(f) Issue certificates evidencing membership in accordance with
30the provisions of Section 7313 and issue identity cards.

31(g) Levy dues, assessments, and admission and transfer fees.

32(h) Make donations for the public welfare or for community
33funds, hospital, charitable, educational, scientific, civic, religious
34or similar purposes.

35(i) Assume obligations, enter into contracts, including contracts
36of guarantee or suretyship, incur liabilities, borrow or lend money
37or otherwise use its credit, and secure any of its obligations,
38contracts or liabilities by mortgage, pledge or other encumbrance
39of all or any part of its property and income.

P11   1(j) Participate with others in any partnership, joint venture or
2other association, transaction or arrangement of any kind whether
3or not such participation involves sharing or delegation of control
4with or to others.

5(k) Act as trustee under any trust incidental to the principal
6objects of the corporation, and receive, hold, administer, exchange,
7and expend funds and property subject to such trust.

8(l) Carry on a business at a profit and apply any profit that results
9from the business activity to any activity in which it may lawfully
10engage.

11(m) (1) In advance of, or during an emergency, take any or all
12of the following actions necessary to conduct the corporation’s
13ordinary business operations and affairs during an emergency,
14unless emergency bylaws provide otherwise pursuant to subdivision
15(g) of Section 7151:

16(A) Modify lines of succession to accommodate the incapacity
17of any director, officer, employee, or agent resulting from the
18emergency.

19(B) Relocate the principal office, designate alternative principal
20offices or regional offices, or authorize the officers to do so.

21(C) Give notice to a director or directors in any practicable
22manner under the circumstances, including, but not limited to, by
23publication and radio, when notice of a meeting of the board cannot
24be given to that director or directors in the manner prescribed by
25the bylaws or Section 7211.

26(D) Deem that one or more officers of the corporation present
27 at a board meeting is a director, in order of rank and within the
28same rank in order of seniority, as necessary to achieve a quorum
29for that meeting.

30(2) During an emergency, the board may not take any action
31that requires the vote of the shareholders or is not in the
32corporation’s ordinary course of business, unless the required vote
33of the shareholders was obtained prior to the emergency.

34(3) Any actions taken in good faith during an emergency under
35this subdivision binds the corporation and may not be used to
36impose liability on a corporate director, officer, employee, or agent.

37(4) For purposes of this subdivision, “emergency” means any
38of the following events or circumstances as a result of whichbegin insert, and
39only so long as,end insert
a quorum of the corporation’s board of directors
40cannot be readily convened for action:

P12   1(A) A natural catastrophe, including, but not limited to, a
2hurricane, tornado, storm, high water, wind-driven water, tidal
3wave, tsunami, earthquake, volcanic eruption, landslide, mudslide,
4snowstorm, or drought, or, regardless of cause, any fire, flood, or
5explosion.

6(B) An attack on this state or nation by an enemy of the United
7States of America, or upon receipt by this state of a warning from
8the federal government indicating that an enemy attack is probable
9or imminent.

10(C) An act of terrorism or other man-made disaster that results
11in extraordinary levels of casualties or damage or disruption
12severely affecting the infrastructure, environment, economy,
13government functions, or population, including, but not limited
14to, mass evacuations.

15(D) A state of emergency proclaimed by the Governor.

16

SEC. 6.  

Section 7151 of the Corporations Code is amended to
17read:

18

7151.  

(a) The bylaws shall set forth (unless such provision is
19contained in the articles, in which case it may only be changed by
20an amendment of the articles) the number of directors of the
21corporation, or the method of determining the number of directors
22of the corporation, or that the number of directors shall be not less
23than a stated minimum nor more than a stated maximum with the
24exact number of directors to be fixed, within the limits specified,
25by approval of the board or the members (Section 5034), in the
26manner provided in the bylaws, subject to subdivision (e). The
27number or minimum number of directors may be one or more.

28(b) Once members have been admitted, a bylaw specifying or
29changing a fixed number of directors or the maximum or minimum
30number or changing from a fixed to a variable board or vice versa
31may only be adopted by approval of the members (Section 5034).

32(c) The bylaws may contain any provision, not in conflict with
33law or the articles, for the management of the activities and for
34the conduct of the affairs of the corporation, including but not
35limited to:

36(1) Any provision referred to in subdivision (c) of Section 7132.

37(2) The time, place and manner of calling, conducting and giving
38notice of members’, directors’ and committee meetings, or of
39conducting mail ballots.

P13   1(3) The qualifications, duties and compensation of directors;
2the time of their election; and the requirements of a quorum for
3directors’ and committee meetings.

4(4) The appointment of committees, composed of directors or
5nondirectors or both, by the board or any officer and the authority
6of any such committees.

7(5) The appointment, duties, compensation and tenure of
8officers.

9(6) The mode of determination of members of record.

10(7) The making of reports and financial statements to members.

11(8) Setting, imposing and collecting dues, assessments, and
12admission and transfer fees.

13(d) The bylaws may provide for the manner of admission,
14withdrawal, suspension, and expulsion of members, consistent
15with the requirements of Section 7341.

16(e) The bylaws may require, for any or all corporate actions
17(except as provided in paragraphs (1) and (2) of subdivision (a) of
18Section 7222, subdivision (c) of Section 7615, and Section 8610)
19the vote of a larger proportion of, or all of, the members or the
20members of any class, unit, or grouping of members or the vote
21of a larger proportion of, or all of, the directors, than is otherwise
22required by this part. Such a provision in the bylaws requiring such
23greater vote shall not be altered, amended or repealed except by
24such greater vote, unless otherwise provided in the bylaws.

25(f) The bylaws may contain a provision limiting the number of
26members, in total or of any class, which the corporation is
27authorized to admit.

28(g) (1) The bylaws may contain any provision, not in conflict
29with the articles, to manage and conduct the ordinary business
30affairs of the corporation effective only in an emergency as defined
31in Section 7140, including, but not limited to, procedures for calling
32a board meeting, quorum requirements for a board meeting, and
33designation of additional or substitute directors.

34(2) During an emergency, the board may not take any action
35that requires the vote of the shareholders or otherwise is not in the
36corporation’s ordinary course of business, unless the required vote
37of the shareholders was obtained prior to the emergency.

38(3) All provisions of the regular bylaws consistent with the
39emergency bylaws shall remain effective during the emergency,
P14   1and the emergency bylaws shall not be effective after the
2emergency ends.

3(4) Corporate action taken in good faith in accordance with the
4emergency bylaws binds the corporation, and may not be used to
5impose liability on a corporate director, officer, employee, or agent.

6

SEC. 7.  

Section 9140 of the Corporations Code is amended to
7read:

8

9140.  

Subject to any limitations contained in the articles or
9bylaws and to compliance with other provisions of this division
10and any other applicable laws, a corporation, in carrying out its
11activities, shall have all of the powers of a natural person,
12including, without limitation, the power to:

13(a) Adopt, use, and at will alter a corporate seal, but failure to
14affix a seal does not affect the validity of any instrument.

15(b) Adopt, amend, and repeal bylaws.

16(c) Qualify to conduct its activities in any other state, territory,
17dependency or foreign country.

18(d) Issue, purchase, redeem, receive, take or otherwise acquire,
19own, sell, lend, exchange, transfer or otherwise dispose of, pledge,
20use and otherwise deal in and with its own bonds, debentures,
21notes and debt securities.

22(e) Issue memberships.

23(f) Pay pensions, and establish and carry out pension, deferred
24compensation, saving, thrift and other retirement, incentive and
25benefit plans, trusts, and provisions for any or all of its directors,
26officers, employees, and persons providing services to it or any of
27its subsidiary or related or associated corporations, and to
28indemnify and purchase and maintain insurance on behalf of any
29fiduciary of such plans, trusts, or provisions.

30(g) Levy dues, assessments, and fees.

31(h) Make donations for the public welfare or for community
32funds, hospital, charitable, educational, scientific, civic, religious
33or similar purposes.

34(i) Assume obligations, enter into contracts, including contracts
35of guarantee or suretyship, incur liabilities, borrow or lend money
36or otherwise use its credit, and secure any of its obligations,
37contracts or liabilities by mortgage, pledge or other encumbrance
38of all or any part of its property and income.

39(j) Participate with others in any partnership, joint venture or
40other association, transaction or arrangement of any kind whether
P15   1or not such participation involves sharing or delegation of control
2with or to others.

3(k) Act as trustee under any trust incidental to the principal
4objects of the corporation, and receive, hold, administer, exchange,
5and expend funds and property subject to such trust.

6(l) Carry on a business at a profit and apply any profit that results
7from the business activity to any activity in which it may lawfully
8engage.

9(m) Pay the reasonable value of services rendered in this state
10to the corporation before January 1, 1975, and not previously paid,
11by any person who performed such services on a full-time basis
12under the direction of a religious organization in connection with
13the religious tenets of the organization. Such person shall have
14relied solely on the religious organization for his or her financial
15support for a minimum of five years. A payment shall not be made
16if such person or religious organization waives the payment or
17receipt of compensation for such services in writing. Payment may
18be made to such religious organization to reimburse it for
19maintenance of any person who rendered such services and to
20assist it in providing future support and maintenance; however,
21payment shall not be made from any funds or assets acquired with
22funds donated by or traceable to gifts made to the corporation by
23any person, organization or governmental agency other than the
24members, immediate families of members and affiliated religious
25organizations of the religious organization under whose direction
26the services were performed.

27(n) (1) In advance of or during an emergency, take any or all
28of the following actions necessary to conduct the corporation’s
29ordinary business operations and affairs during an emergency,
30unless emergency bylaws provide otherwise pursuant to subdivision
31(g) of Section 9151:

32(A) Modify lines of succession to accommodate the incapacity
33of any director, officer, employee, or agent resulting from the
34emergency.

35(B) Relocate the principal office, designate alternative principal
36offices or regional offices, or authorize the officers to do so.

37(C) Give notice to a director or directors in any practicable
38manner under the circumstances, including, but not limited to, by
39publication and radio, when notice of a meeting of the board cannot
P16   1be given to that director or directors in the manner prescribed by
2the bylaws or Section 9211.

3(D) Deem that one or more officers of the corporation present
4at a board meeting is a director, in order of rank and within the
5same rank in order of seniority, as necessary to achieve a quorum
6for that meeting.

7(2) During an emergency, the board may not take any action
8that requires the vote of the shareholders or is not in the
9corporation’s ordinary course of business, unless the required vote
10of the shareholders was obtained prior to the emergency.

11(3) Any actions taken in good faith during an emergency under
12this subdivision binds the corporation and may not be used to
13impose liability on a corporate director, officer, employee, or agent.

14(4) For purposes of this subdivision, “emergency” means any
15of the following events or circumstances as a result of whichbegin insert, and
16only so long as,end insert
a quorum of the corporation’s board of directors
17cannot be readily convened for action:

18(A) A natural catastrophe, including, but not limited to, a
19hurricane, tornado, storm, high water, wind-driven water, tidal
20wave, tsunami, earthquake, volcanic eruption, landslide, mudslide,
21snowstorm, or drought, or, regardless of cause, any fire, flood, or
22 explosion.

23(B) An attack on this state or nation by an enemy of the United
24States of America, or upon receipt by this state of a warning from
25the federal government indicating that an enemy attack is probable
26or imminent.

27(C) An act of terrorism or other man-made disaster that results
28in extraordinary levels of casualties or damage or disruption
29severely affecting the infrastructure, environment, economy,
30government functions, or population, including, but not limited
31to, mass evacuations.

32(D) A state of emergency proclaimed by the Governor.

33

SEC. 8.  

Section 9151 of the Corporations Code is amended to
34read:

35

9151.  

(a) The bylaws shall set forth (unless such provision is
36contained in the articles, in which case it may only be changed by
37an amendment of the articles) the number of directors of the
38corporation, or the method of determining the number of directors
39of the corporation, or that the number of directors shall be not less
40than a stated minimum nor more than a stated maximum with the
P17   1exact number of directors to be fixed, within the limits specified,
2by approval of the board or the members (Section 5034), in the
3manner provided in the bylaws, subject to subdivision (e) of
4Section 9151. The number or minimum number of directors may
5be one or more.

6(b) Except as otherwise provided in the articles or bylaws, once
7members have been admitted, a bylaw specifying or changing a
8 fixed number of directors or the maximum or minimum number
9or changing from a fixed to a variable board or vice versa may
10only be adopted by approval of the members (Section 5034).

11(c) The bylaws may contain any provision, not in conflict with
12law or the articles, for the management of the activities and for
13the conduct of the affairs of the corporation, including but not
14limited to:

15(1) Any provision referred to in subdivision (c) of Section 9132.

16(2) The time, place and manner of calling, conducting and giving
17notice of members’, directors’ and committee meetings, or of
18conducting mail ballots.

19(3) The qualifications, duties and compensation of directors;
20the time of their election; and the requirements of a quorum for
21directors’ and committee meetings.

22(4) The appointment of committees, composed of directors or
23nondirectors or both, by the board or any officer and the authority
24of any such committees.

25(5) The appointment, duties, compensation and tenure of
26officers.

27(6) The mode of determination of members of record.

28(7) The making of reports and financial statements to members.

29(8) Setting, imposing and collecting dues, assessments, and
30admissions and transfer fees.

31(d) The bylaws may provide for the manner of admission,
32withdrawal, suspension, and expulsion of members.

33(e) The bylaws may require, for any or all corporate actions
34(except as provided in Section 9222 and subdivision (b) of Section
359680), the vote of a larger proportion of, or all of, the members or
36the members of any class, unit, or grouping of members, or the
37vote of a larger proportion of, or all of, the directors than is
38otherwise required by this part. Such a provision in the bylaws
39requiring such greater vote shall not be altered, amended or
P18   1repealed except by such greater vote, unless otherwise provided
2in the bylaws.

3(f) The bylaws may contain a provision limiting the number of
4members, in total or of any class, which the corporation is
5authorized to admit.

6(g) (1) The bylaws may contain any provision, not in conflict
7with the articles, to manage and conduct the ordinary business
8affairs of the corporation effective only in an emergency as defined
9in Section 9140, including, but not limited to, procedures for calling
10a board meeting, quorum requirements for a board meeting, and
11designation of additional or substitute directors.

12(2) During an emergency, the board may not take any action
13that requires the vote of the shareholders or otherwise is not in the
14corporation’s ordinary course of business, unless the required vote
15of the shareholders was obtained prior to the emergency.

16(3) All provisions of the regular bylaws consistent with the
17emergency bylaws shall remain effective during the emergency,
18and the emergency bylaws shall not be effective after the
19emergency ends.

20(4) Corporate action taken in good faith in accordance with the
21emergency bylaws binds the corporation, and may not be used to
22impose liability on a corporate director, officer, employee, or agent.



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