Presented for ratification: FSCT revised bylaws.

Approved November 6, 2005

Approved by the FSCT Board of Directors at second reading on November 6, 2005, the amended Bylaws are published here prior to ratification by the membership. If ratified, the Bylaws will become effective February 6, 2006.

BYLAWS

ARTICLE I NAME, PURPOSES AND OBJECTIVES, AND OFFICES

Section 1.1. Name

The name of the corporation is Federation of Societies for Coatings Technology.

Section 1.2. Purposes and Objectives

The purposes of the Federation are set forth in its Articles of Incorporation. The Federation shall operate as a nonprofit organization in a manner that is consistent with the following objectives:

A. to develop or provide scientific, engineering and technical data, facts and standards, and to promote research and the application of the sciences to further the development, manufacture, and use of paints, varnishes, lacquers, related protective and decorative coatings, printing inks and other related products, and the raw materials necessary for these products;

B. to promote educational activities and the interchange of ideas among its Members and the public generally;

C. to arrange for the collection and dissemination of information pertinent to the industries served by the Federation, and for the presentation, discussion, and publication of papers and other contributions;

D. to encourage the establishment of Constituent Societies and to coordinate their activities with those of the Federation;

E. to promote the improvement of products, the elimination of wasteful methods of manufacture, and foster manufacturing procedures and practices that minimize pollution of the environment as a service to the industry and the public as a whole; and

F. to cooperate with other organizations, public and private, to accomplish these objectives.

Section 1.3. Offices

The registered office of the Federation shall be at 492 Norristown Road, Blue Bell, Pennsylvania 19422. The Federation may have other offices in such places as the Board may determine.

ARTICLE II DEFINITIONS

Section 2.1. Definitions

The following terms used in these Bylaws shall have the meanings set forth below.

A. "Act" means the Pennsylvania Nonprofit Corporation law of 1988, as amended;

B. "Board" means the Board of Directors of the Federation;

C. "Constituent Society" means an organized group of Individuals described in Section 10.1. of these Bylaws;

D. "Director" means an individual serving on the Board;

E. "Federation" means Federation of Societies for Coatings Technology;

F. "Immediate Past-President" means the most recent Past-President;

G. "Members" means individuals who satisfy the requirements for membership in the Federation as provided in Article III of these Bylaws;

H. "Member-Elected Directors" means those Directors elected by the Members;

I. "Officers" means the three elected officers of the Federation as set forth in Section 8.1 of these Bylaws;

J. "Past-President" means an individual who has previously served as a President of the Federation;

K. President means the President & Chair of the Board;

L. "Standing Rules" means the rules described in Article XVIII of these Bylaws.

ARTICLE III MEMBERS

Section 3.1. Classes and Qualifications of Membership

The Federation shall have five (5) classes of members. Classes of membership in the Federation shall be:

A. Full: Any individual who is employed in the protective or decorative coatings, printing ink, or allied industries, or by those firms that manufacture or sell raw materials, supplies, services or equipment required by those industries.

B. Educator: Any individual who is a college or high school educator.

C. Student: Any individual who is a full-time student registered in any educational institution of recognized standing in a course of study in chemistry, engineering, physics or other physical sciences leading to a degree.

D. Retired: Any individual who.

(1) was a Full or Educator Member who severed his or her connection with the individual's employer by reason of retirement due to age, disability or other reasons deemed satisfactory by Federation; and

(2) is no longer considered a permanent employee in the protective or decorative coatings, printing ink or allied industries, or by the Firms that manufacture or sell raw materials, supplies, services, or equipment required by those industries.

E. Federation Honorary: Any individual who

(1) has rendered significant service to the Federation or the industries served by the Federation in such manner as to aid the accomplishment of the objectives of the Federation; and

(2) is elected an Honorary Member by the Board.

In addition, it is a requirement of membership that each individual be current in the payment of fees, annual dues and assessments to the Federation as determined by the Board pursuant to Section 3.3 of these Bylaws. Any question concerning the satisfaction or continued satisfaction of the foregoing qualifications on the part of any Member or person requesting membership in the Federation shall be determined by the Board.

Section 3.2. Voting Rights; Proxy

Each Member shall be entitled to one vote, either in person or by proxy at a meeting; or by mail (or such other voting procedure adopted pursuant to Section 4.9). Every proxy shall be executed in writing by the Member or by his or her duly authorized attorney in fact and filed with the Secretary-Treasurer of the Federation. A proxy shall be revocable at will, notwithstanding any other agreement or any provision in the proxy to the contrary. The revocation of a proxy shall not be effective until notice thereof has been given to the Secretary-Treasurer of the Federation. No unrevoked proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. In no event shall a proxy be voted on after three years from the date of its execution. A proxy shall not be revoked by the death or incapacity of the maker unless, before the vote is counted or the authority is exercised, written notice of such death or incapacity is given to the Secretary-Treasurer of the Federation.

Section 3.3. Dues and Assessments

The Board may, by resolution, determine (a) the amounts of any fees, dues or assessments payable by the Members, and (b) the time and method of their payment. The Board may impose such fees, dues, or assessments upon all Members of the same class either alike or in different amounts or proportions, and upon a different basis upon different classes of Members. The Board may, by resolution, exempt Members of one or more classes from fees, dues, or assessments.

Section 3.4. Nontransferable 

Membership in the Federation is not transferable.

Section 3.5. Termination of Membership

Except as otherwise provided by these Bylaws or the Standing Rules, membership in the Federation shall terminate for:

A. any Member, other than a Student Member, who ceases to satisfy the criteria for membership in the Federation set forth in Section 3.1;

B. any Student Member three months after such member ceases to satisfy the criteria for such category of membership in the Federation; and

C. any Member for whom fees, dues or assessments have not been paid within the period established by the Board.

ARTICLE IV MEETINGS OF MEMBERS

Section 4.1. Place of Meetings

Meetings of the Members shall be held at such place as may be fixed by the Board. If no place is fixed by the Board, meetings of the Members shall be held at the registered office of the Federation.

Section 4.2. Annual Meeting/Meetings of Members

Unless the Board provides by resolution for a different time, the annual meeting of the Members shall be held in the last quarter of the calendar year, at such place and on such date as the Board shall designate with such programs and order of business as may be arranged by the President.

Section 4.3. Special Meetings of Members

Special meetings of the Members may be called at any time by the President, the Board or Members entitled to cast at least 10% of the votes which all Members are entitled to cast at the particular meeting. Upon written request of any person entitled to call a special meeting, the Secretary-Treasurer shall (a) fix the date and time of the meeting, which shall be held not more than sixty (60) days after receipt of the request, and (b) give notice to the Members. If the Secretary-Treasurer neglects or refuses to fix the meeting date or give notice within thirty (30) days after receipt of the written request for the special meeting, the person or persons calling the meeting may do so.

Section 4.4. Notice of Meetings of Members

Written notice of every meeting of the Members shall be given by, or at the direction of, the Secretary-Treasurer to each Member of record entitled to vote at the meeting at least five (5) days prior to the date of the meeting, unless a greater period of notice is required by the Act in a particular case. In the case of special meetings of the Members, the notice shall specify the general nature of the business to be transacted. When a meeting of the Members is adjourned, it shall not be necessary to give any notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which such adjournment is taken, unless the Board fixes a new record date for the adjourned meeting or the Act requires notice of the business to be transacted and such notice has not previously been given.

Section 4.5. Determination of Members of Record

The Board may fix a time, not more than seventy (70) days prior to the date of any meeting of the Members or any adjournment thereof, as a record date for the determination of the Members entitled to notice of, or to vote at, such meeting. The Board may similarly fix a record date for the determination of the Members of record for any other purpose including a vote in accordance with the procedures set forth in Section 4.9. When a determination of the Members of record has been made for purposes of a meeting, the determination shall apply to any adjournment thereof unless the Board fixes a new record date for the adjourned meeting. If no record date is fixed, the record date shall be determined in accordance with the Act.

Section 4.6. Quorum 

A. Definition of Quorum: There shall be a quorum if at least five percent (5%) of the Members, entitled to vote on the matters to be acted upon, are present (either in person or by proxy) at a meeting or participate in a vote conducted in accordance with the procedures set forth in Section 4.9.

B. Default Provision--Section 4.9 Vote:

(1) In the case of a vote conducted in accordance with the procedures set forth in Section 4.9 for the election of Member-Elected Directors, if a quorum is not reached after the Board has extended the period for voting twice for a period to be determined by the Board, then the number of Members who voted by the close of the second extension shall nevertheless constitute a quorum.

(2) In the case of a vote conducted pursuant to Section 4.9 for any purpose other than the election of Member-Elected Directors, if a quorum is not reached after the Board has extended the period for voting twice for a period to be determined by the Board, those Members who have voted by the close of the second extension of the voting period shall constitute a quorum for the purpose of acting upon any resolution or other matter so long as written notice of the second extension of the voting period has been given to Members entitled to vote. The written notice of the second extension must (a) state that those members who vote by the close of the second extension shall constitute a quorum for the purpose of acting on such resolution or other matter; and (b) be given to each Member of record at least ten (10) days prior to the day named for the close of the second extension of the voting period.

C. Default Provision--Meeting Vote: In the absence of a quorum at a meeting, [section] 5756(b) of the Act will apply.

Section 4.7. Participation in Meetings

One or more Members may participate in a meeting of the Members by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other.

Section 4.8. Voting Rights of Members

The voting rights of Members shall be limited to the election of Directors as set forth in Section 5.3 and the adoption, amendment and repeal of bylaw provisions committed expressly to the Members as set forth in Section 20.2 of these Bylaws.

Section 4.9. Voting Procedures

Notwithstanding anything to the contrary contained herein, voting by Members may be conducted at a meeting, or at any time prior thereto, by mail, electronic mail, list-serve response or other "web"-based program, or any other method determined by the Board that permits participation in such voting by each Member entitled to vote, or by his or her duly authorized attorney in fact and filed with the Secretary-Treasurer of the Federation.

Section 4.10. Adjournment

Adjournments of any meeting of the Members may be taken. Any meeting at which Directors are to be elected shall be adjourned only from day to day, or for such longer periods not exceeding fifteen (15) days each as the Members present and entitled to vote shall direct, until such Directors have been elected.

Section 4.11. Organization

At every meeting of the Members, the President, or, in his or her absence, the Vice President, or in the absence of the President and the Vice President, a chair chosen by the Members, shall act as chair. The Secretary-Treasurer, or in his or her absence, a person appointed by the President, shall act as secretary.

ARTICLE V BOARD OF DIRECTORS

Section 5.1. Board of Directors

The business and affairs of the Federation shall be managed under the direction of the Board. Except as otherwise provided by statute, the Articles of Incorporation, or these Bylaws, the powers of the Federation shall be exercised by, or under the authority of, the Board.

Section 5.2. Qualification of Directors

Each Director shall be a natural person at least 18 years of age, who need not be a resident of Pennsylvania. Each Director shall at all times be a Full or an Educator Member.

Section 5.3. Number of Directors; Classes and Election of Member-Elected Directors

A. The Board shall consist of eleven (11) Directors. The President and Vice President shall serve as voting members of the Board. There shall be nine (9) Member Elected Directors, who shall be divided into three classes, each consisting of three (3) individuals. The term of office of one class shall expire in each year. Each class shall be elected by the Members entitled to elect Directors for terms of three (3) years.

Section 5.4. Term of Office: Member-Elected Directors

Except as provided in Section 5.3, each Member-Elected Director shall hold office (a) beginning at the annual meeting of Members at which his or her election is announced and ending at the annual meeting of Members three years later; (b) until his or her successor has been elected and qualified; (c) until his or her earlier election to President or Vice President; (d) until his or her failure to qualify as a Full or Educator member; or (e) until his or her earlier death, resignation, or removal.

Section 5.5. Compensation of Directors

Directors shall serve without compensation for their services as Directors or as committee members but may be reimbursed for expenses reasonably incurred on behalf of the Federation to the extent provided by the Board.

ARTICLE VI MEETINGS OF BOARD OF DIRECTORS

Section 6.1. Regular Meetings of Directors

There shall be at least two regular meetings of the Board each year, at such place and on such dates as the Board shall designate and with such programs and order of business as may be arranged by the President.

Section 6.2. Annual Meeting of Directors

Except as may otherwise be provided by the Board, the Annual Meeting shall be held in the last quarter of the calendar year, at such place and on such dates as the Board shall designate and with such programs and order of business as may be arranged by the President. To the extent possible such meeting shall be held in conjunction with the annual meeting of Members.

Section 6.3. Special Meetings of Directors

The President or any five (5) Directors may call a special meeting of the Board, which shall be held at such place and on such dates as shall be designated in the notice for the meeting. Five days' written notice of any special meeting shall be given to each Director pursuant to Section 19.1 or notice may be given by telephone. Such notice shall state the place, date and time of such special meeting but need not state the purpose of such meeting.

Section 6.4. Quorum and Voting by Directors

The presence of a majority of the Directors shall constitute a quorum. Except as otherwise provided in the Articles of Incorporation or these Bylaws, a majority vote of those present and voting shall be sufficient to carry any vote. Each Director shall have one vote.

Section 6.5. Participation in Meetings of Directors and Committees

A Director may participate in a meeting of the Board, or a committee thereof, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other.

Section 6.6. Chair of Meetings of Directors

Each meeting of the Board shall be presided over by the President or, in his or her absence the Vice President or, in the absence of both the President and Vice President a chair chosen by a majority of the Directors present. The Secretary-Treasurer or, in his or her absence, an individual appointed by the chair, shall act as secretary.

Section 6.7. Consent of Directors in Lieu of Meetings

Any action which may be taken at a meeting of the Directors may be taken without a meeting, if a consent or consents in writing, setting forth the actions so taken, shall be signed by all Directors and filed with the Secretary-Treasurer.

ARTICLE VII COMMITTEES

Section 7.1. Establishment and Powers

The President or the Board, by resolution adopted by a majority of the Directors, may establish one or more committees, not including Standing Committees, to consist of one or more Directors of the Federation and any number of individuals who are not Directors of the Federation. The President may designate one or more Directors or other individuals as alternate members of a committee. Any committee, to the extent provided by the President or in the resolution of the Board, shall have and may exercise all of the powers and authority of the Board except that a committee, including Standing Committees, if any, shall not have any power or authority as to the following:

A. the submission to the Members of any action requiring approval of the Members under the Act;

B. the creation or filling of vacancies in the Board;

C. the adoption, amendment or repeal of the Bylaws or Standing Rules;

D. the amendment or repeal of any resolution of the Board that by its terms is amendable or repealable only by the Board; or

E. action on matters committed by the Bylaws or Standing Rules or a resolution of the Board exclusively to another committee of the Board.

Section 7.2. Term

Except as otherwise provided in these Bylaws, each Committee of the Board and the Members thereof shall serve at the pleasure of the President or the Board.

Section 7.3. Standing Committees

There shall be a Nominating Committee, a Bylaws Committee and a Finance/Audit Committee. The specific responsibilities and scope of authority of each Standing Committee shall be determined by the President from time to time. Except as otherwise set forth in these Bylaws, the President shall appoint members of the Standing Committees annually. The Board by resolution may determine not to constitute a Standing Committee for any year.

Section 7.4. Nominating Committee

The Nominating Committee shall have five members consisting of the Immediate Past-President as chair and four additional members proposed by the Chair/Immediate Past-President and approved by the Board. Members of the Committee need not be Directors but must be Full or Educator Members in good standing of the Federation. No Officer shall be permitted to serve as a member of the Nominating Committee. If the Immediate Past-President is unwilling or unable to serve as chair, the position shall be filled by the most recent Past-President who is willing and able to serve. Any vacancies in the membership of the Nominating Committee shall be filled by the Board upon the recommendation of the Chair. The Committee shall be prohibited from nominating one of its own members as a Director or Officer of the Board. Members of the Nominating Committee shall serve a one-year term.

Section 7.5. Bylaws Committee

There shall be a Bylaws Committee which shall:

A. review all proposed amendments to the Bylaws and Standing Rules deemed by the Board to have merit and submit a report to the Board with its recommendations;

B. engage in such other activities as the Board shall designate.

Section 7.6. Finance/Audit Committee

There shall be a Finance/Audit Committee which shall:

A. oversee the finances of the Federation, review the Federation's annual budget, oversee and review the audit, and make recommendations as appropriate with respect to the budget and financial matters; and

B. engage in such other activities as the Board shall designate.

Section 7.7. Committee Organization

Except as otherwise provided by the Board, each Committee shall establish its own operating procedures. Each Committee shall keep regular minutes of its proceedings and report to the Board as it shall specify. Each Committee shall determine the places, dates and times of its meetings.

ARTICLE VIII OFFICERS

Section 8.1. Officers

The elected Officers of the Federation shall consist of a President, Vice President, and Secretary-Treasurer.

Section 8.2. Qualification of Officers

All Officers shall be natural persons of at least 18 years of age and, except as otherwise set forth in these Bylaws, shall at all times be Full or Educator Members.

Section 8.3. Term of President and Vice President

Except as otherwise set forth in the Bylaws, the President and the Vice President shall each hold office for a two-year term beginning at the annual meeting of Members at which his or her election is announced and ending at the annual meeting of Members two years later or until their successors have been elected and qualified, or until his or her earlier death, resignation, or removal, or failure to meet the requirements for Full or Educator Member.

Section 8.4. Term of Secretary-Treasurer

The Secretary-Treasurer shall hold office for a one-year term beginning at the annual meeting of Members at which his or her election is announced and ending at the annual meeting of Members one year later or until his or her successor has been elected and qualified, or until his or her earlier death, resignation, or removal, or failure to meet the requirements for Full or Educator Member.

Section 8.5. President & Chair of the Board

The President shall, in general, perform all duties incident to the office of president and such other duties as may be assigned by the Board; and act as chair of all meetings of the Board and of the Members.

Section 8.6. Vice President

In the absence or disability of the President, or in the event of the President's refusal to act, or when so directed by the President, the Vice President may perform all duties of the President, and, when so acting, shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice President shall perform such other duties as may be assigned by the Board or the President.

Section 8.7. Secretary-Treasurer

The Secretary-Treasurer position shall be filled by either (a) a Member; (b) a member of the Federation's staff; or (c) a Member-Elected Director. Unless the position is filled by a Member-Elected Director, the Secretary-Treasurer shall be a non-voting member of the Board. The Secretary-Treasurer shall perform all duties incident to that office and such additional duties as may be assigned by the Board or the President.

Section 8.8. Executive Director

A. The Board shall appoint an Executive Director of the Federation, which person shall serve at the pleasure of the Board.

B. The Executive Director shall serve as the chief executive officer of the Federation and shall perform such duties as may be assigned by the Board. The Executive Director shall serve as a non-voting member of the Board. The Executive Director shall act as the Federation's President when action is required by any statute, court, governmental agency, or other competent authority to be taken by a president of the Federation.

Section 8.9. Compensation of Officers

The compensation of all officers shall be fixed by the Board or any committee or officer authorized by the Board. No officer shall be precluded from receiving such compensation by reason of the fact that he or she is also a Director of the Federation. Nothing contained herein shall preclude the Board from authorizing the Federation to reimburse any Officer for the actual and reasonable out of pocket expenses (including without limitation reasonable travel expenses) of such Officer in connection with the business of the Federation.

ARTICLE IX NOMINATION, ELECTION, RESIGNATION, REMOVAL AND VACANCY 

Section 9.1. Nomination of Directors and Officers

A. The Nominating Committee shall propose names for the election of the Member-Elected Directors. The recommendations of the Nominating Committee for such Directors shall be presented to the Members either in connection with a vote undertaken in accordance with the procedures set forth in Section 4.9 or with the notice of the meeting of the Members at which the election shall take place or be concluded.

B. Members may cast only one vote per individual and may vote for that number of individuals up to the total number of Directors to be elected. Cumulative voting shall not be permitted. The individuals receiving the highest number of votes, up to the number of Directors to be elected, shall be elected as Directors.

C. Nominations for the Member-Elected Directors may also be made by a written petition signed by twenty-five (25) Members which is received by the Executive Director of the Federation not later than June 15 of the year in which the election is to take place.

D. The Nominating Committee shall propose to the Board nominees for President, Vice President and Secretary-Treasurer.

Section 9.2. Election of Officers

Except as otherwise provided by resolution of the Board, the Board shall elect, prior to the annual election of Member-Elected Directors, the President, the Vice President and the Secretary-Treasurer. Only individuals who have been nominated as provided in these Bylaws shall be eligible for election.

Section 9.3. Vote by Secret

The vote by the Board for Officers shall be by secret ballot in the event that more than one nominee is proposed for any office.

Section 9.4. Resignation

Any Director or Officer or member of the Nominating, Bylaws, Finance/Auditing, or other committee may resign at any time by giving written notice to the Federation. The resignation shall be effective upon receipt by the Federation or at such subsequent time as may be specified in the notice.

Section 9.5. Removal of Directors or Officers

Any Director or Officer may be removed from office by a vote of two-thirds (2/3) of all the Directors at any meeting of the Board whenever in their judgment the best interests of the Federation will be served. No Director may be removed from office by a vote of the Members. An Officer's removal shall be without prejudice to the contract rights, if any, of any person so removed.

Section 9.6. Vacancies of Member-Elected Directors

Vacancies of Member-Elected Directors on the Board, including vacancies resulting from an increase in the number of directors, the election of a Member-Elected Director to President or Vice President, or the death, resignation, removal or ceasing to be a Full or Educator Member shall be filled by a majority vote of the Board. Each person so elected shall be a Director for the balance of the unexpired term.

Section 9.7. Officer Vacancy

Any vacancy created by the death, resignation or removal of an Officer shall be filled by the Board. Each individual elected to fill a vacancy shall serve for the balance of the unexpired term.

ARTICLE X CONSTITUENT SOCIETIES

Section 10.1. Description of Constituent Society

A Constituent Society is a group of individuals formally organized to pursue objectives consistent with those of the Federation, which has been admitted to the status of a Constituent Society of the Federation in accordance with these Bylaws and the Standing Rules.

Section 10.2. Classes of Membership in Constituent Society

Members of a Constituent Society shall satisfy the criteria for membership established in the Bylaws and Standing Rules of the Constituent Society. Constituent Societies may offer membership without requiring membership in the Federation, but such "Constituent-Only" members are not accorded the rights and privileges of members of the Federation.

Section 10.3. Status of Constituent Society

The Standing Rules shall contain principles and procedures governing the establishment and certification of Constituent Societies, the geographic boundary of each, and requirements for the maintenance of the status of a Constituent Society. The Board shall have the right:

A. to certify a group as a Constituent Society by a vote of a majority of all the Directors; and

B. to withdraw the certification of any Constituent Society for failure to satisfy the requirements for such status by a vote of a majority of all the Directors.

Section 10.4. Management of Internal Affairs of Constituent Society

Except as provided by these Bylaws and the Standing Rules, each Constituent Society shall control its own internal affairs.

Section 10.5. Operation of Constituent Society in Accordance with Law

Each Constituent Society shall operate in accordance with the laws of the jurisdiction within its geographic boundaries and the Federation shall take no action which shall cause any Constituent Society to violate these laws.

Section 10.6. Society Liaison Council

A Society Liaison Council shall be established for the purpose of advising the Board regarding issues affecting the Constituent Societies.

ARTICLE XI LIMITATION OF LIABILITY; INSURANCE

Section 11.1. Limitation of Liability of Directors

A Director shall not be personally liable, as a Director, for monetary damages for any action taken, or any failure to take any action, as a Director unless:

A. the Director has breached or failed to perform the duties of his or her office under Subchapter B of Chapter 57 of the Act; and

B. the breach or failure to perform constitutes self-dealing, willful misconduct, or recklessness.

This Section shall not apply to (1) the responsibility or liability of a Director pursuant to any criminal statute, or (2) the liability of a Director for the payment of taxes pursuant to federal, state, or local law. Any repeal or amendment of this Section shall be prospective only and shall not increase, but may decrease, a Director's liability with respect to actions or failures to act occurring prior to such change.

Section 11.2. Insurance

The Federation may purchase and maintain insurance on behalf of any individual who is or was a Director or officer of the Federation or is or was serving at the request of the Federation as a director or officer of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust, or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Federation would have the power to indemnify him or her against that liability under the Act. The Federation's payment of premiums with respect to such insurance coverage shall be provided primarily for the benefit of the Federation. To the extent that such insurance coverage provides a benefit to the insured person, the Federation's payment of premiums with respect to such insurance shall be provided in exchange for the services rendered by the insured person and in a manner so as not to constitute an excess benefit transaction under section 4958 of the Internal Revenue Code of 1986, as amended.

ARTICLE XII INDEMNIFICATION OF DIRECTORS, OFFICERS, AND OTHERS

Section 12.1. General Indemnification

The Federation shall indemnify any "authorized representative" of the Federation (which shall mean, for the purpose of this Article, a Director or officer of the Federation or a person serving at the request of the Federation as a Director, officer, partner, fiduciary or trustee of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise who was or is a "party" (which shall include for purposes of this Article the giving of testimony or similar involvement) or is threatened to be made a party to any "proceeding" (which shall mean for purposes of this Article any threatened, pending or completed action, suit, appeal, or other proceeding of any nature, whether civil, criminal, administrative or investigative, whether formal or informal, and whether brought by or in the right of the Federation, its Members or otherwise) by reason of the fact that such person was or is an authorized representative of the Federation to the fullest extent permitted by law, including without limitation indemnification against expenses (which shall include for purposes of this Article attorneys' fees and disbursements), damages, punitive damages, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such proceeding unless the act of failure to act giving rise to the claim is finally determined by a court to have constituted willful misconduct or recklessness. If an authorized representative is not entitled to indemnification in respect of a portion of any liabilities to which such person may be subject, the Federation shall nonetheless indemnify such person to the maximum extent for the remaining portion of the liabilities.

Section 12.2. Advancement of Expenses

The Federation shall pay the expenses (including attorneys' fees and disbursements) actually and reasonably incurred in defending a proceeding on behalf of any person entitled to indemnification under these Bylaws in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Federation as authorized in this Article. The financial ability of such authorized representative to make such repayment shall not be prerequisite to the making of an advance.

Section 12.3. Employee Benefit Plans

For purposes of this Section, the Federation shall be deemed to have requested an officer or Director to serve as a fiduciary with respect to an employee benefit plan where the performance by such person of duties to the Federation also imposes duties on, or otherwise involves services by, such person as a fiduciary with respect to the plan; excise taxes assessed on an authorized representative with respect to any transaction with an employee benefit plan shall be deemed "fines"; and action taken or omitted by such person in good faith with respect to an employee benefit plan in the performance of duties for a purpose reasonably believed to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Federation.

Section 12.4. Security for Indemnification Obligations

To further effect, satisfy or secure the indemnification obligations provided herein or otherwise, the Federation may maintain insurance, obtain a letter of credit, act as self-insurer, create a reserve, trust, escrow, cash collateral or other fund or account, enter into indemnification agreements, pledge or grant a security interest in any assets or properties of the Federation, or use any other mechanism or arrangement whatsoever in such amounts, at such costs, and upon such other terms and conditions as the Board shall deem appropriate.

Section 12.5. Reliance Upon Provisions

Each person who shall act as an authorized representative of the Federation shall be deemed to be doing so in reliance upon the rights of indemnification provided by this Article.

Section 12.6. Amendment or Repeal

All rights of indemnification under this Article shall be deemed a contract between the Federation and the person entitled to indemnification under this Article pursuant to which the Federation and each such person intend to be legally bound. Any repeal, amendment or modification hereof shall be prospective only and shall not limit, but may expand, any rights or obligations in respect of any proceeding whether commenced prior to or after such change to the extent such proceeding pertains to actions or failures to act occurring prior to such change.

Section 12.7. Scope of Article

The indemnification, authorized by this Article, shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any statute, agreement, vote of shareholders or disinterested Directors or otherwise, both as to action in an official capacity and as to action in any other capacity while holding such office. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article shall continue as to a person who has ceased to be an authorized representative in respect of proceedings pertaining to actions or failures to act occurring prior to such time, and shall inure to the benefit of the heirs, executors and administrators of such person.

ARTICLE XIII CONFLICTS OF INTEREST

Section 13.1. Conflicts of Interest

No contract or transaction between the Federation and one or more of its Members, Directors or officers or between the Federation and any other corporation, partnership, association, or other organization in which one or more of its Directors or officers are Directors or officers, or have a financial interest, shall be void or voidable solely for such reason, or solely because the Member, Director or officer is present at, or participates in, the meeting of the Board which authorizes the contract or transaction, or solely because his, her, or their votes are counted for that purpose, if:

A. the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the Board and the Board in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested Directors even though the disinterested Directors are less than a quorum;

B. the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Members entitled to vote thereon, if any, and the contract or transaction is specifically approved in good faith by vote of such Members; or

C. the contract or transaction is fair as to the Federation as of the time it is authorized, approved, or ratified by the Board or the Members.

Common or interested Directors may be counted in determining the presence of a quorum at a meeting of the Board, which authorizes the contract or transaction.

ARTICLE XIV STANDARD OF CARE

Section 14.1. Standard of Care; Justifiable Reliance

A Director shall stand in a fiduciary relation to the Federation and shall perform his or her duties as a Director, including duties as a member of any committee of the Board upon which the Director may serve, in good faith, in a manner the Director reasonably believes to be in the best interests of the Federation and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances. In performing his or her duties, a Director shall be entitled to rely in good faith on information, opinions, reports or statements, including, without limitation, financial statements and other financial data, in each case prepared or presented by any of the following:

A. one or more officers or employees of the Federation whom the Director reasonably believes to be reliable and competent in the matters presented;

B. counsel, public accountants or other persons as to matters which the Director reasonably believes to be within the professional or expert competence of such person; or

C. a committee of the Board upon which the Director does not serve, duly designated in accordance with law, as to matters within its designated authority, which committee the Director reasonably believes to merit confidence.

A Director shall not be considered to be acting in good faith if the Director has knowledge concerning the matter in question that would cause his or her reliance to be unwarranted.

Section 14.2. Presumption 

Absent breach of fiduciary duty, lack of good faith, or self-dealing, actions taken by the Board, committees of the Board, or by individual Directors, or any failure to take any action, shall be presumed to be in the best interests of the Federation.

Section 14.3. Notation of Dissent 

A Director who is present at a meeting of the Board, or of a committee of the Board, at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her dissent is entered in the minutes of the meeting or unless the Director files a written dissent to the action with the Secretary-Treasurer of the meeting before the adjournment thereof or transmits the dissent in writing to the Secretary-Treasurer immediately after the adjournment of the meeting. The right to dissent shall not apply to a Director who voted in favor of the action. Nothing in this Section shall bar a Director from asserting that minutes of the meeting incorrectly omitted his or her dissent if, promptly upon receipt of a copy of the minutes, the Director notifies the Secretary-Treasurer, in writing, of the asserted omission or inaccuracy.

ARTICLE XV ANNUAL REPORT

Section 15.1. Annual Report

As soon as practical after the close of each fiscal year, the Board shall submit for publication in JCT COATINGSTECH, a report, verified by the President and Secretary-Treasurer or by a majority of the Directors, covering the activities of the Federation for the past year and showing in appropriate detail the following:

A. the assets and liabilities, including the trust funds, of the Federation as of the end of the fiscal year immediately preceding the date of the report;

B. the principal changes in assets and liabilities, including trust funds, during the year immediately preceding the date of the report;

C. the revenue or receipts of the Federation, both unrestricted and restricted to particular purposes, for the year immediately preceding the date of the report, including separate data with respect to each trust fund held by or for the Federation;

D. the expenses or disbursements of the Federation, for both general and restricted purposes, during the year immediately preceding the date of the report, including separate data with respect to each trust fund held by or for the Federation; and

E. the number of Members of the Federation as of the date of the report, together with a statement of increase or decrease in such number during the year immediately preceding the date of the report, and a statement of the place where the names and addresses of the current Members may be found.

Section 15.2. Filing of Annual Report

The annual report shall be filed with the minutes of the Annual Meeting.

ARTICLE XVI OFFICIAL PUBLICATIONS

Section 16.1. Official Publications

The Federation shall publish JCT RESEARCH, JCT COATINGSTECH, and any other publications which the Board deems necessary or desirable. Each Member shall receive an annual subscription to JCT RESEARCH and JCT COATINGSTECH and other publications as the Board may authorize.

ARTICLE XVII FISCAL YEAR

Section 17.1. Fiscal Year

The fiscal year of the Federation shall end on August 31.

ARTICLE XVIII STANDING RULES

Section 18.1. Description of Standing Rules

Standing Rules are organizational and operating procedures for the Federation and the Constituent Societies.

Section 18.2. Adoption and Amendment of Standing Rules

The Standing Rules may be adopted or amended by the Board upon a vote of a majority of all the Directors at any meeting of the Board.

Section 18.3. Publication of Standing Rules

The text of all amendments to the Standing Rules shall be published in JCT COATINGSTECH not later than sixty (60) days after being adopted by the Board.

ARTICLE XIX MISCELLANEOUS

Section 19.1. Written Notice

A. Whenever written notice is required to be given to any person, it may be given to the person, either personally or by sending a copy by first class or express mail, postage prepaid, or by telegram (with messenger service specified), telex or TWX (with answer back received) or courier service, charges prepaid, or by facsimile transmission or electronic mail transmission, to his or her address (or to his or her telex, TWX or facsimile number or email address) appearing on the books of the Federation or, in the case of Directors, supplied by him or her to the Federation for the purpose of notice. If the notice is sent by mail, telegraph or courier service, it shall be deemed to have been given when deposited in the United States mail or with a telegraph office or courier service for delivery to that person or, in the case of telex or TWX, when dispatched or, in the case of facsimile or electronic mail, when receipt has been confirmed. A notice of meeting shall specify the place, day and hour of the meeting and any other information required by the Act. Except as otherwise provided by the Act or these Bylaws, when a meeting is adjourned, it shall not be necessary to give any notice of the adjourned meeting, or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which such adjournment is taken.

B. Any notice required to be given under these Bylaws may be effectively waived by the person entitled to such notice by written waiver signed before or after the meeting to which such notice relates or by attendance at such meeting otherwise than for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened.

Section 19.2. Real Property

The Federation shall make no purchase of real property nor sell, mortgage, lease away or otherwise dispose of its real property, unless authorized by the vote of two-thirds (2/3) of all Directors. If the real property is subject to a trust, the conveyance away shall be free of trust and the trust shall be impinged upon the proceeds of such conveyance.

Section 19.3. Negotiable Instruments 

All checks or demands for money and notes of the Federation shall be signed by such Officer or Officers as the Board may designate.

Section 19.4 Corporate Records

The Federation shall keep:

A. an original or duplicate record of the proceedings of the Board;

B. the original or a copy of its Bylaws, including all amendments thereto to date, certified by the Secretary Treasurer of the Federation; and

C. appropriate, complete, and accurate books or records of account, at its registered office or at its principal place of business.

Section 19.5. Contracts

No contracts shall be entered into, nor disbursements made, without the prior approvals that may from time to time be required by the Board.

Section 19.6. Parliamentary Procedure 

Except as otherwise provided in the Articles of Incorporation and these Bylaws, any question of parliamentary order arising in the course of conduct of the meetings of the Members, the Board and committees of the Federation, shall be resolved pursuant to the latest, revised edition of Robert's Rules of Order.

ARTICLE XX AMENDMENTS

Section 20.1. Origination of Proposed Amendments

Proposals to amend these Bylaws may be originated by: (a) any Officer or Director; (b) the Board; or (c) at least twenty-five (25) Members.

Section 20.2. Review of Proposed Amendments by Bylaws Committee

All proposals to amend these Bylaws shall be first submitted to the Board for review and consideration of whether such proposed amendments merit review by the Bylaws Committee. The Bylaws Committee shall review all such proposed amendments deemed by the Board to have merit and submit a report to the Board with its recommendations at least thirty (30) days prior to the meeting of the Board at which the proposal will be voted upon or, if applicable, submitted to a vote by Members. Except as otherwise provided by the Act, the Bylaws of the Federation may be amended by the vote of at least seven (7) of the eleven (11) members of the Board, except the following sections cannot be amended or repealed without a vote by Members: 3.1, 3.2, 3.5, 4.2, 4.6, 4.8, 4.9, 5.1, 5.3, 6.4, 9.1 (B), 9.5, 9.6 and 11.1.