-7-
reason of being or having been such trustee, director,
officer or employee, provided a determination is made by the
trustees in the manner set forth in Paragraph (A) of this
Section or by a majority of the voting members present at a
meeting held for such purpose if a quorum is present (a)
that such trustee, director, officer or employee was not,
and has not been adjudicated to have been, negligent or
guilty of misconduct in the performance of his duty to the
corporation of which he is a trustee, director, officer or
employee (b) that he acted in good faith in what he
reasonably believed to be the best interest of such
corporation, and (c) that, in any matter, the subject of a
criminal action, suit or proceeding, he had no reasonable
cause to believe that his conduct was unlawful.
(C) Such indemnification shall not be deemed exclusive
of any other rights to which such trustee, director, officer
or employee may be entitled under the articles, the
regulations, any agreement any insurance purchased by the
Corporation, vote of members or otherwise.
By letter dated February 18, 1971, respondent ruled that
petitioner was exempt from Federal income tax under section
501(c)(3) and that donors may deduct contributions made to
petitioner.
Petitioner’s articles of incorporation authorize its
trustees to adopt a code of regulations. The trustees promptly
did so. Petitioner’s code of regulations creates two classes of
members: Charter members and associate members (individuals or
organizations chosen by the board of trustees). The Club is the
sole charter member of petitioner.3 The Club elects petitioner’s
3 Petitioner’s code of regulations draws careful
distinctions between the Club and petitioner; it provides that
the Club “shall be the only member in the Corporation
[petitioner] entitled to vote”, it requires that petitioner’s
trustees “must be members in good standing” of the Club, and it
requires that “Each officer [of petitioner] must be a member” of
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011