[Kzyxtalk] Response to Programmer Elected Issue

[dennisobrien at sharejerusalem.com]

Thank you for your response of May 16, copied below.  You invited me to provide specific citations to the Corporations Code to support my challenge to the recent selection of a Programmer-Director without a vote of the Members.  Here is a full analysis:

Issue: Did the Board of Directors violate the Corporations Code in 1990 when it first created the Programmer-elected Board seats?

Rule: The following sections of the California Corporations Code apply:

5150.  (a) Except as provided in subdivision (c), and Sections 5151, 5220, 5224, 5512, 5613, and 5616, bylaws may be adopted, amended or repealed by the board unless the action would materially and adversely affect the rights of members as to voting or transfer.

5812.  (a) Except as provided in this section or Section 5813.5, amendments may be adopted if approved by the board and approved by the members (Section 5034) and approved by such other person or persons, if any, as required by the articles. The approval by the members or other person or persons may be before or after the approval by the board.
   (b) Notwithstanding subdivision (a), the following amendments may be adopted by approval of the board alone:
   (1) An amendment extending the corporate existence or making the corporate existence perpetual, if the corporation was organized prior to August 14, 1929.
   (2) An amendment deleting the initial street address and initial mailing address of the corporation, the names and addresses of the first directors, or the name and address of the initial agent.
   (3) Any amendment, at a time the corporation has no members; provided, however, that if the articles require approval by any person for an amendment, that an amendment may not be adopted without such approval.
   (4) An amendment adopted pursuant to Section 9913.

None of the exceptions mentioned in Section 5150 or 5812 apply.  They can be found at the following link:
http://www.leginfo.ca.gov/cgi-bin/calawquery?codesection=corp

Analysis: In 1990 the Board of Directors changed the bylaws concerning the election of Directors.  Instead of the Members electing all of the Directors, only the Programmers would select one of the Directors.  In doing so, the Board "materially and adversely affect[ed] the rights of members as to voting."  This is specifically prohibited by Section 5150.  Nor did the Board adopt any of the "amendments [that] may be adopted by approval of the board alone," as authorized  by Section 5812.  In short, the Board did not have the authority to amend the Bylaws to create the Programmer-Director position, and was specifically prohibited from doing so.

Conclusion: The recent "election" of the Programmer-Director by only the Programmers is void.  The person who was so selected is not a Director.  He cannot help constitute a quorum, nor can he vote on any matter before the Board.  He cannot chair any committees or exercise any other powers of a Director.  The existing Board must acknowledge its error and rescind the Bylaws amendment of 1990 and any related amendments passed since then.  A new director must be elected by all the Members, now scheduled for early 2017.  Until then, the seat is vacant.

Please confirm as soon as possible that the Board of Directors has agreed to take the above actions.  If it does not do so voluntarily, I will file a timely Petition for Writ of Mandate in Superior Court to enforce the rights of the Members.

Sincerely,

Dennis O'Brien

--------------------------------------------
On Mon, 5/16/16, Meg Courtney <mcourtney1 at mcn.org> wrote:

Subject: Response to Programmer Elected Issue
To: "Dennis OBrien" <dennisobrien at sharejerusalem.com>
Cc: "KZYX Board" <kzyxboard at lists.mcn.org>
Date: Monday, May 16, 2016, 6:41 PM
 
Dear Dennis,
After a considerable amount of time searching through past records, the present Board believes that the 1990 Board did not violate the Corporations Code when it created the first Programmer-elected Board seats. We invite you to specify what provision of the Corporations Code you think was violated by the earlier Board.We believe that citing the entire Corporations Code for “authority” on this issue is insufficiently specific.

Sincerely,
Meg Courtney
 
Meg Courtney
Board President
KZYX & Z
Mendocino County Public Broadcasting