Add to the constitution:
Section 3. CEDA is organized exclusively for educational
purposes, included, for such purposes, the making of distributions to
organizations that qualify as exempt organizations under section 501(c)(3) of
the Internal Revenue Code, or corresponding section of any future federal tax
Section 4. No part of the net earnings of CEDA shall inure
to the benefit of, or be distributable to its members, trustees, officers, or
other private persons, except that the corporation shall be authorized and
empowered to pay reasonable compensation for services rendered and to make
payments and distributions in furtherance of the purposes set forth in ARTICLE
I, Section 3.
Section 5. No substantial part of the activities of the
corporation shall be the carrying on of propaganda, or otherwise attempting to
influence legislation, and the corporation shall not participate in, or
intervene in (including the publishing or distribution of statements) any
political campaign on behalf of any candidate for public office.
Notwithstanding any other provision of these articles, the corporation shall
not carry on any other activities not permitted to be carried on (a) by a
corporation exempt from federal income tax under section 501(c)(3) of the
Internal Revenue Code, or corresponding section of any future federal tax code,
or (b) by a corporation, contributions to which are deductible under section
170(c)(2) of the Internal Revenue Code, or corresponding section of any future
federal tax code.
Section 6. Upon the dissolution of CEDA, assets shall be
distributed for one or more exempt purposes within the meaning of section
501(c)(3) of the Internal Revenue Code, or corresponding section of any future
purpose. Any such assets not so disposed of shall be disposed of by the Court
of Common Pleas of the county in which the principal office of the corporation
is then located, exclusively for such purposes or to such organization or
organizations, as said Court shall determine, which are organized and operated
exclusively for such purposes.
ARTICLE IX: Conflict of Interest Policy and Annual Statement
Section 1. Purpose
A. The purpose of this conflict of interest policy is to
protect CEDA’s interests when it is contemplating entering into a transaction
or arrangement that might benefit the private interests of an officer or
director of CEDA or might result in a possible excess benefit transaction.
B. This policy is intended to supplement, but not replace,
any applicable state and federal laws governing conflicts of interest
applicable to nonprofit and charitable organizations.
Section 2. Definitions
A. Interested person — Any director, principal officer, or
member of a committee with governing board delegated powers, who has a direct
or indirect financial interest, as defined below, is an interested person.
B. Financial interest — A person has a financial interest
if the person has, directly or indirectly, through business, investment, or
1. An ownership or investment interest in any entity with
which CEDA has a transaction or arrangement,
2. A compensation arrangement with CEDA or with any entity
or individual with which CEDA has a transaction or arrangement, or
3. A potential ownership or investment interest in, or
compensation arrangement with, any entity or individual with which CEDA is
negotiating a transaction or arrangement.
Compensation includes direct and indirect remuneration as
well as gifts or favors that are not insubstantial.
A financial interest is not necessarily a conflict of
interest. A person who has a financial interest may have a conflict of interest
only if the Board or Executive Committee decides that a conflict of interest
exists, in accordance with this policy.
C. Independent Director — A director shall be considered
“independent” for the purposes of this policy if he or she is “independent” as
defined in the instructions for the IRS 990 form or, until such definition is
available, the director –
1. is not, and has not been for a period of at least three
years, an employee of CEDA or any entity in which CEDA has a financial
2. does not directly or indirectly have a significant
business relationship with CEDA, which might affect independence in
3. is not employed as an executive of another corporation
where any of CEDA’s executive officers or employees serve on that corporation’s
compensation committee; and
4. does not have an immediate family member who is an executive
officer or employee of CEDA or who holds a position that has a significant
financial relationship with CEDA.
Section 3. Procedures
A. Duty to Disclose — In connection with any actual or
possible conflict of interest, an interested person must disclose the existence
of the financial interest and be given the opportunity to disclose all material
facts to the Board or Executive Committee.
B. Recusal of Self – Any director may recuse himself or
herself at any time from involvement in any decision or discussion in which the
director believes he or she has or may have a conflict of interest, without
going through the process for determining whether a conflict of interest
C. Determining Whether a Conflict of Interest Exists —
After disclosure of the financial interest and all material facts, and after
any discussion with the interested person, he/she shall leave the Board or
Executive Committee meeting while the determination of a conflict of interest
is discussed and voted upon. The remaining Board or Executive Committee members
shall decide if a conflict of interest exists.
D. Procedures for Addressing the Conflict of Interest
1. An interested person may make a presentation at the Board
or Executive Committee meeting, but after the presentation, he/she shall leave
the meeting during the discussion of, and the vote on, the transaction or
arrangement involving the possible conflict of interest.
2. The President or Chairperson of the Board or Executive
Committee shall, if appropriate, appoint a disinterested person or committee to
investigate alternatives to the proposed transaction or arrangement.
3. After exercising due diligence, the Board or Executive
Committee shall determine whether CEDA 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.
4. If a more advantageous transaction or arrangement is not
reasonably possible under circumstances not producing a conflict of interest,
the Board or Executive Committee shall determine by a majority vote of the
disinterested directors whether the transaction or arrangement is in CEDA’s
best interest, for its own benefit, and whether it is fair and reasonable. In
conformity with the above determination, it shall make its decision as to
whether to enter into the transaction or arrangement.
E. Violations of the Conflicts of Interest Policy
1. If the Board or Executive Committee has reasonable cause
to believe a member has failed to disclose actual or possible conflicts of
interest, it shall inform the member of the basis for such belief and afford
the member an opportunity to explain the alleged failure to disclose.
2. If, after hearing the member’s response and after making
further investigation as warranted by the circumstances, the Board or Executive
Committee determines the member has failed to disclose an actual or possible
conflict of interest, it shall take appropriate disciplinary and corrective
Section 4. Records of Proceedings
The minutes of the Board and all committees with board
delegated powers shall contain:
1. 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, the nature of the financial interest, any action taken to
determine whether a conflict of interest was present, and the Board’s or
Executive Committee’s decision as to whether a conflict of interest in fact
2. The names of the persons who were present for discussions
and votes relating to the transaction or arrangement, 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
Section 5. Compensation
A. A voting member of the Board who receives compensation,
directly or indirectly, from CEDA for services is precluded from voting on
matters pertaining to that member’s compensation.
B. A voting member of any committee whose jurisdiction
includes compensation matters and who receives compensation, directly or
indirectly, from CEDA for services is precluded from voting on matters
pertaining to that member’s compensation.
C. No voting member of the Board or any committee whose
jurisdiction includes compensation matters and who receives compensation,
directly or indirectly, from CEDA, either individually or collectively, is
prohibited from providing information to any committee regarding compensation.
Section 6. Annual Statements
A. Each director, principal officer and member of a
committee with Board delegated powers shall annually sign a statement which
affirms such person:
1. Has received a copy of the conflict of interest policy,
2. Has read and understands the policy,
3. Has agreed to comply with the policy, and
4. Understands CEDA is charitable and in order to maintain
its federal tax exemption it must engage primarily in activities which
accomplish one or more of its tax-exempt purposes.
B. Each voting member of the Board shall annually sign a
statement which declares whether such person is an independent director.
C. If at any time during the year, the information in the
annual statement changes materially, the director shall disclose such changes
and revise the annual disclosure form.
D. The Executive Committee shall regularly and consistently
monitor and enforce compliance with this policy by reviewing annual statements
and taking such other actions as are necessary for effective oversight.
Section 7. Periodic Reviews
To ensure CEDA 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:
1. Whether compensation arrangements and benefits are
reasonable, based on competent survey information (if reasonably available),
and the result of arm’s length bargaining.
2. Whether partnerships, joint ventures, and arrangements
with management organizations, if any, conform to CEDA’s written policies, are
properly recorded, reflect reasonable investment or payments for goods and
services, further charitable purposes and do not result in inurement or
impermissible private benefit or in an excess benefit transaction.
Section 8. Use of Outside Experts
When conducting the periodic reviews as provided for in
Section 7, CEDA 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.