The California Nonprofit Public Benefit Corporation Law, like most state corporation laws, requires that a corporation state its principal place of business. The bylaws permit the Board to establish additional offices within or outside California. This will allow the Corporation to establish offices outside the United States if the Board decides there is a reason to do so. The Board has the inherent power to cause specific functions to be carried out in whatever geographic location it deems appropriate.

The property of the Corporation is irrevocably dedicated to charitable, scientific, literary and/or educational purposes and no part of the net income or assets of the Corporation shall ever inure to the benefit of any Director, Officer or member thereof or to benefit of any private person (except that reasonable compensation may be paid for services rendered to or for the corporation affecting one or more purposes.) Upon the dissolution of the Corporation, the Corporation's assets shall be distributed for one or more of the exempt purposes set forth in the Articles of Incorporation and, if possible, to a 501(c)(3) organization organized and operated exclusively to lessen the burdens of government by providing for the operation of the Internet by developing and maintaining the stability of the Internet infrastructure, or shall be distributed to the Federal government, or a state government, for such purposes, or for such other charitable and public purposes that lessen the burdens of government by providing for the operation and stability of Internet infrastructure. Any assets not so disposed of shall be disposed of by a court of competent jurisdiction 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 such court shall determine, that are organized and operated exclusively for such purposes, unless no such corporation exists, and in such case any assets not disposed of shall be distributed to a 501(c)(3) corporation chosen by such court.

These provisions are designed to (i) allow the Corporation to be treated as a tax-exempt corporation for United States tax purposes and (ii) require that the assets of the Corporation, upon dissolution, be used for Internet-related purposes, if possible.

The Corporation has been formed under the CNPBCL with the public purposes described above, and it shall be nonprofit and nonpartisan. Notwithstanding any other provision of these Bylaws: 

(a) The Corporation shall not carry on any other activities not permitted to be carried on (i) by a corporation exempt from Federal income tax under 501 (c)(3) of the Internal Revenue Code or (ii) by a corporation, contributions to which are deductible under 170 (c)(2) of the Internal Revenue Code. 

(b) 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 be empowered to make the election under 501 (h) of the Internal Revenue Code. 

(c) The Corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office. 

(d) No part of the net earnings of the Corporation shall inure to the benefit of or be distributable to its members, directors, 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 the Articles of Incorporation.  

(e) In no event shall the Corporation be controlled directly or indirectly by one or more "disqualified persons" (as defined in 4946 of the Internal Revenue Code) other than foundation managers and other than one or more organizations described in paragraph (1) or (2) of 509 (a) of the Internal Revenue Code.

These provisions are also intended to enhance tax-exempt treatment for the Corporation and to ensure that the Corporation does not become allied with any particular political agenda.

The Corporation and its subordinate entities shall operate to the maximum extent possible in an open and transparent manner. The Board shall publish, at least annually, a report describing its activities and including an audited financial statement and describing any payments made by the Corporation to Directors (other than reimbursements of expenses). Minutes of Board, Supporting Organization, Council and Committee meetings shall be made publicly available by posting such minutes on a publicly-available Internet with site maintained by the Corporation (the "Web Site") and otherwise. The Board shall post on the Web Site (i) periodically a calendar of scheduled meetings for the upcoming year, (ii) in advance of each Board meeting, a notice of the fact and time that such meeting will be held and, to the extent known, an agenda for the meeting; provided, however, that if reasonably practicable the Board shall post notices of special meetings of the Board at least fourteen (14) days prior to the meetings, and (iii) within ten (10) days after minutes of a Board meeting are approved by the Board, copies of such minutes other than minutes relating to personnel or employment matters, legal matters (to the extent the Board determines is necessary or appropriate to protect the interests of the Corporation), matters that the Corporation is prohibited by law or contract from disclosing publicly and other matters that the Board determines are not appropriate for public distribution. For any matters that the Board determines not to post, the Board shall describe in generic terms the reason for such nondisclosure. In addition, the Initial Board shall investigate the development of additional policies and procedures designed to provide information about, and enhance the ability of interested persons to provide input to, the Board and Supporting Organizations. Any such policies and procedures shall be widely publicized by the Board in draft form, both within the Supporting Organizations and on the Web Site. Any such policies and procedures may be adopted only after a process for receiving and evaluating comments and suggestions has been established by the Board, and after due consideration of any comments or suggestions received by the Board.

These provisions ensure that the Corporation will operate in an open and transparent manner. In addition, the Initial Board is directed to investigate whether additional policies and procedures can be implemented to enhance such openness. Changes from the prior draft bylaws have been made to require public disclosure of (i) the Corporation's calendar, (ii) special Board meetings, (iii) payments, if any, to Directors and (iv) the reasons why any Board minutes are not made publicly available (for example, if the minutes relate to personnel matters).

This section sets forth the general proposition that the Corporation shall be managed by its Board of Directors. However, later provisions provide the Address, Domain Name and Protocol Supporting Organizations with significant powers with respect to matters within their particular areas. Thus, the Board can, for example, negotiate and authorize a lease without involving the Supporting Organizations, but generally will look to the Supporting Organizations to initiate matters relating to address, domain name and protocol matters.

The Board must develop a fee structure that is sufficient to ensure the economic viability of the Corporation. The goal of recovering only operating costs prevents these fees from being excessive. However, based on comments received, a provision has been added to permit the Corporation to establish reasonable reserves for future expenses.

This section sets up an initial board of directors of the Corporation. The Initial Board will consist of nine At Large Directors, who will be joined by Directors selected by the Supporting Organizations (when recognized by the Board) and the president of the Corporation (when selected). The purpose of this phase-in of Directors is to allow the Corporation to be formed and operating within the time frame established by the White Paper even though all of the Supporting Organizations may not have been fully organized. Strict term limits are placed on the Initial Board to ensure that it is transitional only.

Immediately upon the recognition of a Supporting Organization by the Board pursuant to Section 4(B) of Article VII, the Board shall request that such Supporting Organization nominate three persons to be directors. Upon receipt of such nominations, the Board shall elect such persons as members of the Initial Board.

This provision allows each Supporting Organization to select its Initial Board members. The persons selected by the Supporting Organizations are required to be placed on the Board.

The authorized number of Directors shall be no less than nine (9) and no more than nineteen (19) unless changed by amendment to these Bylaws by a two-thirds (2/3) majority vote of all the members of the Board.

A. Until and if this Section 4 is amended pursuant to Articles XIII or XIV, each Board after the Initial Board shall be comprised as follows: 
 

This section sets forth the makeup of the Board after the Initial Board. Basically, there will be nine Directors selected by the Supporting Organizations, nine At Large Directors and the president. The purpose of this clarification is to ensure that address, domain name and protocol stakeholders have constant and significant representation o the Board, while allowing Internet users, commercial interests and other stakeholders, through the At Large positions, to balance those three specific constituencies. Based on comments received on the prior bylaws, this provision has been changed to provide that the initial At Large Directors will establish the method for selecting future At Large Directors. Of course, as part of its charge, the entire Initial Board is required to establish the final composition formula for the Board, and the means of selection, after the requisite evaluation and solicitation of comments.

  
  
As suggested by the White Paper, no officials of a government can serve as a Director. However, as described below, governments will have input through an advisory committee to the Board. In addition, this provision has been amended to address concerns about the lack of a definition, and possible overbreadth, of the term "official," especially given the fact that in many cultures the role and reach of governments is larger than is the case in the United States. It would not be necessary to serve the goal of this provision to bar service by a professor at a governmental university, or a person who holds a scientific or technical position at a business organization owned in whole or part by a national government, and this provision has been clarified to make it clear that it does not do so..

In order to ensure broad international representation on the Board, no more than one-half (1/2) of the total number of At Large Directors serving at any given time shall be residents of any one Geographic Region, and no more than two (2) of the Directors nominated by each Supporting Organization shall be residents of any one Geographic Region. As used herein, each of the following shall be a "Geographic Region": Europe; Asia/Australia/Pacific; South America; Africa; North America; Elsewhere.

This language ensures that the Board will not be dominated by any geographic region. While residency is not a perfect screen, it seemed to present the fewest interpretive difficulties.

The development of a conflict of interest policy will enhance the Corporation's credibility with Internet stakeholders. Directors are prohibited from acting on matters in which they have a material financial interest.

  
Directors shall serve as individuals who have the duty to act in what they reasonably believe are the best interests of the Corporation and not as representatives of their Supporting Organizations, employers or any other organizations or constituencies.

  
Based on comments received and other draft bylaws, this section was added to make it clear that, once elected, a Director's legal duty is to the Corporation as a whole and not to his or her Supporting Organization, employer or any other group.

A. Directors shall be elected at each annual meeting of the Board to hold office until the end of their terms pursuant to the procedures described in this section. If an annual meeting is not held or the Directors are not elected at the annual meeting, they may be elected at any special meeting of the Board held for that purpose. Each Director, including a member of the Initial Board and a Director elected to fill a vacancy or elected at a special meeting, shall hold office until expiration of the term for which elected and until a successor has been elected and qualified. Notwithstanding the foregoing, each time a person is appointed as President of the Corporation, the Board shall, at the time of such appointment, elect such person to the Board to serve for as long as, but only as long as, such person holds the office of President.  

 
B. Each Supporting Organization shall (i) select the Board members to be nominated by that Supporting Organization through a process determined by the Supporting Organization and ratified by the Board, and (ii) notify the Board and the Secretary of the Corporation in writing of those selections at least 30 days prior to the date on which the Board votes on such nominee(s). The Board shall elect as Directors the persons properly nominated by the Supporting Organizations. 

  
C. At Large Board members other than those serving on the Initial Board shall be elected by a process, which shall include soliciting nominations from Internet users and industry participants organizations representing such and due consideration of such nominees, to be determined by a majority vote of all At Large members of the Initial Board, following solicitation of input from all interested parties and consideration of all such suggestions. 

  
D. The regular term of office of a Director (other than (i) the person holding the office of President, who shall serve for as long as, and only for as long as, such person holds the office of President, and (ii) a member of the Initial Board, who shall serve for the period specified in these bylaws) shall be three (3) years. No Director may serve for more than two (2) consecutive terms. Notwithstanding the foregoing, the three original Directors nominated by any Supporting Organization shall be elected for terms of one (1) year, two (2) years, and three (3) years, respectively, with each term considered to have begun on October 1, 1998 regardless of when those original Directors actually take office. Unless otherwise specified by the Board pursuant to Section 4(B) of this Article, the terms of the first At Large Directors elected to replace the At Large members of the Initial Board shall be as follows: three such At Large Directors shall serve a term of one (1) year, three such At Large Directors shall serve a term of two (2) years, and three such At Large Directors shall serve a term of three (3) years.

This section establishes the timing and mechanics of Director election and creates a staggered Board (i.e., one-third of the Board is elected annually) to provide a consistency in the Corporation but regular turnover. This section also delegates to the Supporting Organizations (subject to Board ratification) the determination of what processes should be established to select their Directors. The initial At Large Directors will establish the mechanisms for the election of future At Large Directors after input from all interested parties. Finally, this section mandates term limits for Directors to prevent entrenchment.

Subject to Section 5226 of the CNPBCL, any Director may resign at any time, either by oral tender of resignation at any meeting of the Board or by giving written notice thereof to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The successor shall be elected pursuant to Section 12 of this Article.

Any Director or Directors may be removed following notice and a four-fifths (4/5) majority vote of all members of the Board; provided, however, that the Director or Directors who are the subject of the removal action shall not be entitled to vote on such an action or be counted as a member of the Board when calculating the required four-fifths (4/5) vote; and provided further, however, that in no event shall a Director be removed unless such removal is approved by not less than a majority of all members of the Board. A Director nominated by a Supporting Organization can be recommended for recall by that Supporting Organization through procedures adopted by that Supporting Organization and ratified by the Board. Upon such recommendation for recall, the Board shall vote to remove such Director. If the Board seeks to remove more than one Director nominated by a Supporting Organization or two At Large Directors within a four-month period, the Board must show reasonable cause for its action.

To allow the Board to deal with unforeseen problems with specific members of the Board, this provision allows the Board to remove any Director but only by a vote of a significant super-majority of the Board. This is designed to ensure that a Director is removed in only the most extreme circumstances. In addition, to enhance the accountability of Directors this section gives a Supporting Organization the flexibility to recall a member of the Board that was selected by that Supporting Organization. Based on comments received, a "show cause" requirement was added to prevent potential usurpation of the Board by the removal of multiple Directors.

A vacancy or vacancies in the Board of Directors shall be deemed to exist in the case of the death, resignation or removal of any Director, if the authorized number of Directors is increased, if a Supporting Organization shall fail to nominate its Directors (other than Directors on the Initial Board) in accordance with Section 9 of this Article, or if a Director has been declared of unsound mind by a final order of court or convicted of a felony or has been found by final order or judgment of any court to have breached a duty under Sections 5230 et seq. of the CNPBCL. Any vacancy occurring on the Board of Directors shall be filled in accordance with Section 9 of this Article at any meeting of the Board occurring after such vacancy. A Director elected to fill a vacancy on the Board shall serve for the unexpired term of his or her predecessor in office and until a successor has been selected and qualified. The replacement need not hold the office, if any, of the removed Director. No reduction of the authorized number of Directors shall have the effect of removing a Director prior to the expiration of the Director's term of office.

Annual meetings of the Board will be held for the purpose of electing Directors, Officers and for the transaction of such other business as may come before the meeting. The first annual meeting will be held the last week of September 1999 or on such other date as may be set by the Board. Subsequent annual meetings shall be held as set by the Board not less than ten (10) nor more than thirteen (13) months after the annual meeting held the prior year. In the absence of designation, the annual meeting will be held at the principal office of the Corporation. The Corporation shall be required to make available at the place of any meeting of the Board the telecommunications equipment necessary to permit members of the Board to participate by telephone pursuant to Section 18 of this Article.

This provision provides that the Board shall meet at least annually. More frequent regular meetings are anticipated in Section 14 below.

Regular meetings of the Board will be held on dates to be determined by the Board. In the absence of other designation, regular meetings will be held at the principal office of the Corporation.

This language gives the Board the power to establish regular interim meetings.

Special meetings of the Board may be called by or at the request of one-quarter (1/4) of the members of the Board or by the Chairperson of the Board or the President. A call for a special meeting will be made in writing by the Secretary of the Corporation. In the absence of designation, special meetings will be held at the principal office of the Corporation.

  
Giving Board members and certain officers the ability to call special meetings of the Board allows the Corporation to address unforeseen issues when necessary. As stated earlier, the Corporation will publicly post notices of, and, to the extent known, agendas for these special meetings.

Notice of time and place of all meetings will be delivered personally or by telephone or by electronic mail to each Director, or sent by first-class mail (air mail for addresses outside the United States) or facsimile, charges prepaid, addressed to each Director at the Director's address as it is shown on the records of the Corporation. In case the notice is mailed, it will be deposited in the United States mail at least fourteen (14) days before the time of the holding of the meeting, and the Secretary of the Corporation shall cause each Director to be notified by telephone or electronic mail within four (4) days after the notice is mailed. In case the notice is delivered personally or by telephone or facsimile or electronic mail it will be delivered personally or by telephone or facsimile or electronic mail at least seven (7) days before the time of the holding of the meeting. Notwithstanding anything in this Section 16 to the contrary, notice of a meeting need not be given to any Director who signed a waiver of notice or a written consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such Director. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meetings.

  
This provision ensures that all directors will receive adequate notice by a variety of mediums of all meetings to be held. Given the expected international participation, the notice periods are longer than is often customary. The notices will be publicly posted.

At all annual, regular and special meetings of the Board, a majority of the total number of Directors then in office shall constitute a quorum for the transaction of business, and the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board, unless otherwise provided herein or by law. If a quorum shall not be present at any meeting of the Board, the Directors present thereat may adjourn the meeting from time to time to another place, time or date. If the meeting is adjourned for more than twenty-four (24) hours, notice shall be given to those Directors not at the meeting at the time of the adjournment.

  
This section has been clarified, in response to specific comments, to make it clear that a majority of the total number of Directors in office must be present to hold a meeting. This requirement deals with the practical reality that not all Directors will be able to attend each meeting, but does not set the quorum requirement so low as to allow a small percentage of the Board to bind the Corporation. 

Members of the Board or any Committee of the Board may participate in a meeting of the Board or Committee of the Board through use of conference telephone or similar communications equipment, provided that all Directors participating in such a meeting can speak to and hear one another. Participation in a meeting pursuant to this Section constitutes presence in person at such meeting.

  
Given the required geographic diversity of Directors, this provision allows Board members to attend meetings via telephone or similar communications equipment.

Any action required or permitted to be taken by the Board or a Committee of the Board may be taken without a meeting if all of the Directors entitled to vote thereat shall individually or collectively consent in writing to such action. Such written consent shall have the same force and effect as the unanimous vote of such Directors. Such written consent or consents shall be filed with the minutes of the proceedings of the Board.

Communication by electronic mail shall be considered equivalent to any communication otherwise required to be in writing, except a written consent authorized by Section 19 of this Article. The Corporation shall take such steps as it deems appropriate under the circumstances to assure itself that communications by electronic mail are authentic.

  
Communications by electronic mail are considered to be the same as any other writing other than the written Board consent under Section Nineteen. This limitation is necessary because California law, as well as the law of most other jurisdictions, does not expressly provide that electronic mail is the equivalent of a signed written paper regarding Board action.

Every Director shall have the right at any reasonable time to inspect and copy all books, records and documents of every kind except where confidentiality would be violated, and to inspect the physical properties of the Corporation.

The Directors shall receive no compensation for their services as Directors. The Board may, however, authorize the reimbursement of actual and necessary expenses incurred by Directors performing duties as Directors.

  
Directors must serve on a volunteer basis without compensation, but all expenses incurred in performing the duties of a Director may be reimbursed. This prohibition of compensation may well limit the number and type of persons who will be willing and able to serve on the Board, but there seemed to be a clear consensus in favor of such a prohibition..

A Director present at a Board meeting at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her dissent or abstention is entered in the minutes of the meeting, or unless such Director files a written dissent or abstention to such action with the person acting as the secretary of the meeting before the adjournment thereof, or forwards such dissent or abstention by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent or abstain shall not apply to a Director who voted in favor of such action.

  
The provision was adopted from other written materials produced during this process.

The rules of procedure at meetings of the Board and committees of the Board and Supporting Organizations shall be rules contained in Roberts' Rules of Order on Parliamentary Procedure, newly revised, so far as applicable and when not inconsistent with these Bylaws, the Articles of Incorporation or any resolution of the Board.

  
The use of Roberts' Rules of Order, which was adopted from other written materials produced during this process, establishes a recognized means of conducting meetings. These procedures can be very cumbersome, and if the Initial Board concludes that a different set of procedural rules would be preferable, they have the authority to adopt such rules.

A. The Supporting Organizations shall serve as advisory bodies to the Board and shall have such powers and duties as may be prescribed by the Board and these Bylaws. The Board may add additional Supporting Organizations by a two-thirds (2/3) majority vote of all members of the Board and shall, by such two-thirds (2/3) vote, reallocate the positions on the Board set forth in Section 4 of Article VI.  

  
B. Each Supporting Organizations shall be responsible for nominating Directors for election to those seats on the Board designated to be filled by each Supporting Organization. 

  
C. The Supporting Organizations shall have the primary responsibility for proposing policies and procedures regarding those matters within their individual scope (as defined by the Board in its recognition of each such Supporting Organization). Any such proposals forwarded to the Board by a Supporting Organization shall be simultaneously transmitted to all other Supporting Organizations so that they may comment to the Board on such proposals. The Board shall approve policies and procedures proposed by a Supporting Organization if the Board finds that the proposed policies or procedures (1) comply with the Articles and Bylaws, (2) were arrived at through fair and open processes (including permitting participation by representatives of other Supporting Organizations), (3) are not opposed by any of the Supporting Organizations, and (4) further the purposes of the Corporation. If the Board declines to approve any such proposals of a Supporting Organization, it shall return the proposals to the Supporting Organization for further consideration, along with an explanation of the reasons it declines to approve the proposals. If, after reasonable efforts, the Board does not receive a proposal from a Supporting Organization that it finds acceptable or receives conflicting proposals from Supporting Organizations, the Board may initiate, amend or modify and then approve a specific proposal by majority vote. Nothing in this Section 1 is intended to limit the general powers of the Board or the Corporation to act on matters not within the scope of a Supporting Organization or that the Board finds are necessary or appropriate to further the purposes of the Corporation.

This section is key. It provides that Supporting Organizations serve as advisory bodies to the Board and select Directors. The Supporting Organizations also are primarily responsible for proposing policies within their respective substantive areas, and the Board is generally required to adopt those policies. These provisions have been revised from prior versions of the bylaws to clarify that the Board can act on its own initiative if necessary or appropriate to further the purposes of the Corporation (such as maintaining the operational stability of the Internet) or if there is disagreement among Supporting Organizations.

The Supporting Organizations shall constitute a primary funding source for the Corporation in accordance with policies established by the Initial Board, which policies may be amended from time to time by the Board.

This provision makes it clear that the Supporting Organizations are required to serve as a primary (but not necessarily the only) funding source for the Corporation. Obviously, the Corporation's permanent funding mechanism will be an early issue for the Initial Board.

The Board shall review and ratify any qualifications for membership adopted by each of the Supporting Organizations, to the extent consistent with the purposes of the Corporation and its Articles and Bylaws and the purposes of the Supporting Organization. Any entity or organization that wishes to participate in a Supporting Organization may do so provided it meets the minimum qualifications adopted by the Supporting Organization and ratified by the Board. Each entity or organization that qualifies to participate in a given Supporting Organization shall designate one individual as its representative. The Initial Board shall, together with the Supporting Organizations, consider whether there is a practical way to permit individual memberships or other forms of individual participation in the Supporting Organizations and, in its sole discretion after consultation with the Supporting Organizations, may amend these Bylaws to permit such individual memberships or other participation if it finds that would advance the purposes of the Corporation.

This section provides that each Supporting Organization shall promulgate its own qualifications for membership. The Board, however, will have the opportunity to review the proposed qualifications and will only ratify those qualifications to the extent that they are consistent with the purpose of the Corporation, its articles and bylaws, and the purpose of that Supporting Organization. Any entity or organization meeting the minimum membership or participation requirements can become a member in that Supporting Organization, and thus have a role in the selection of directors and the formulation of the Corporation's significant Internet policies. The Initial Board together with the Supporting Organizations are expressly obligated to consider if individual membership would be appropriate for each Supporting Organization.

A. There shall at least be the following Supporting Organizations: 

  
(i) The Address Supporting Organization shall be composed of representatives from regional Internet address registries and other entities with legitimate interests in these issues, as determined by the Address Supporting Organization and approved by the Board. The Address Supporting Organization shall create an Address Council to make recommendations to the Board regarding the operation, assignment and management of Internet addresses and other related subjects; 

  
(ii) The Domain Name Supporting Organization shall be composed of representatives from name registries and registrars of generic/global and country-code top-level domains ("TLDs"), businesses and other entities that are users of the Internet and other entities with legitimate interests in these issues, as determined by the Domain Name Supporting Organization and approved by the Board. The Domain Name Supporting Organization shall create a Names Council to make recommendations regarding top level (generic/global and country-code) domains, including operation, assignment and management of the domain name system and other related subjects; and 

  
(iii) The Protocol Supporting Organization shall be composed of representatives from Internet protocol organizations and other entities with legitimate interests in these issues, as determined by the Protocol Supporting Organization and approved by the Board. The Protocol Supporting Organization shall create a Protocol Council to make recommendations regarding the operation, assignment and management of protocol numbers, port numbers and other technical parameters and other related subjects. 

  
B. The Board shall review the application of any entity that seeks to be recognized as one of the Supporting Organizations referred to in Section 4(A) of this Article VII, and, after requesting comments from and considering the comments of existing organizations representing parties interested in matters within the scope of the proposed Supporting Organization, shall approve such application if it finds that it has been organized in accordance with these Bylaws and that Its recognition would be in the best interest, and serve the purposes, of the Corporation. The application shall include, but not be limited to, a description of the following in form and substance acceptable to the Board (and a commitment to implement the matters described in the application): (i) membership or participation criteria, (ii) methods for developing substantive Internet policies to be recommended to the Board and selecting Board nominees, (iii) open and transparent non-discriminatory processes, (iv) policies to ensure international and diverse participation, (v) policies for disclosure to the Corporation by members of or participants in a Supporting Organization of conflicts of interest or other financial interests in matters within the scope of the Supporting Organization (such conflicts or interests, however, not necessarily requiring abstention from action), and (vi) methods for funding the Supporting Organization and providing funding for the Corporation.

This section sets forth the initial Supporting Organizations, and the means by which the Board officially recognizes a Supporting Organization. Based on comments received, the bylaws now specify that the Supporting Organizations must adopt policies to allow for, among other things, broad, international and open participation. In addition, the bylaws have been amended to make clear that businesses and other Internet users are proper and important participants in the Domain Name Supporting Organization, and to clarify the criteria for, and information required with respect to, recognition of a Supporting Organization by the Board.

A. The Board may establish one or more committees. Committees are of two kinds: those having legal authority to act for the Corporation, known as Committees of the Board, and those that do not have that authority, known as Advisory Committees. Except where otherwise stated in these Bylaws, committee members shall be appointed by the Board. Committee members may be removed from a committee at any time by a two-thirds (2/3) majority vote of all members of the Board; provided, however, that if a Director or Directors are the subject of the removal action, such Director or Directors shall not be entitled to vote on such an action or be counted as a member of the Board when calculating the required two-thirds (2/3) vote; and, provided further, however, that in no event shall a Director be removed from a committee unless such removal is approved by not less than a majority of all members of the Board. The Board may delegate to Committees of the Board all legal authority of the Board except with respect to: 
   

B. The Board shall have the power to prescribe the manner in which proceedings of any committee shall be conducted. In the absence of any such prescription, such committee shall have the power to prescribe the manner in which its proceedings shall be conducted. Unless these Bylaws, the Board or such committee shall otherwise provide, the regular and special meetings shall be governed by the provisions of Article VI applicable to meetings and actions of the Board. Each committee shall keep regular minutes of its proceedings and shall report the same to the Board from time to time, as the Board may require.

This language gives the Board the power to establish two types of committees. One type would be composed of only Board members, and would have the authority to act for the Board, except in certain circumstances. This enables the Board to vest decision-making authority with Directors having special expertise in specific areas or to allow certain routine functions to be performed by less than the full Board. The Board may also form Advisory Committees which may consist of members of the Board as well as any other persons the Board deems appropriate. These Advisory Committees would not have the authority to act for the Board, but will advise the Board on specific topics. To address expressed suggestions received, two specific Advisory Committees -- a Governmental Advisory Committee and a Root Server Advisory Committee -- are established..

Only Directors may be appointed to a Committee of the Board. If a person appointed to a Committee of the Board ceases to be a Director, such person shall also cease to be a member of any Committee of the Board. Each Committee of the Board shall consist of two or more Directors. The Board may designate one or more Directors as alternate members of any such committee, who may replace any absent member at any meeting of the committee. The Board may terminate any Committee of the Board.

The Board may appoint one or more Advisory Committees. Advisory Committee membership may consist of Directors only, Directors and nondirectors, or nondirectors only, and may also include nonvoting members and alternate members. Advisory Committees shall have no legal authority to act for the Corporation, but shall report their findings and recommendations to the Board. 

  
There shall be at least the following Advisory Committees: 

  
A. There shall be a Governmental Advisory Committee. The chair of the Governmental Advisory Committee shall be appointed by the Board. The chair shall appoint the other members of the Governmental Advisory Committee. The responsibility of the Governmental Advisory Committee shall be to advise the Board about the concerns of governments with respect to the responsibilities of the Corporation. Members of the Governmental Advisory Committee shall be representatives of national governments and international governmental organizations. The Governmental Advisory Committee should consider and provide advice on the activities of the Corporation as they relate to concerns of governments, particularly matters where there may be an interaction between the Corporation's policies and various national laws and international agreements. The members of the Governmental Advisory Committee should also provide a liaison function between their governments or international organizations and the Corporation. 

  
B. There shall be a Root Server Advisory Committee. The chair of the Root Server Advisory Committee shall be appointed by the Board. The chair shall appoint other members of the Root Server Advisory Committee. The responsibility of the Root Server Advisory Committee shall be to advise the Board about the operation of the root name servers of the domain name system. The Root Server Advisory Committee should consider and provide advice on the operational requirements of root name servers, including host hardware capacities, operating systems and name server software versions, network connectivity, and physical environment. The Root Server Advisory Committee should examine and advise on the security aspects of the root name server system. Further, the Root Server Advisory Committee should review the number, location, and distribution of root name servers considering the total system performance, robustness, and reliability.

The chairperson and each member of a committee shall serve until his or her successor is appointed, or until such committee is sooner terminated, or until he or she is removed, resigns, or otherwise ceases to qualify as a member of the committee.

A majority of the members of the committee shall constitute a quorum at any meeting of that committee. Each committee shall meet as often as is necessary to perform its duties.

Vacancies on any committee shall be filled in the same manner as provided in the case of original appointments.

The Board Shall not authorize compensation for service as a member of a committee except by a two-thirds (2/3) vote of all members of the Board, but in any event no such compensation shall be authorized for a Director. The Board may, however, authorize the reimbursement of actual and necessary expenses incurred by committee members, including Directors, performing their duties as committee members.

The officers of the Corporation will be Chairperson of the Board, a President (who will serve as Chief Executive Officer), a Chief Technology Officer, a Vice President, a Secretary, and a Treasurer/Chief Financial Officer. The Corporation may have also have at the discretion of the Board, a Vice Chairperson, a General Counsel, one or more additional Vice Presidents, one or more additional Assistant Secretaries, and one or more Assistant Treasurers. Any person may hold more than one office, except that neither the Chairperson of the Board nor the President may serve concurrently as the Secretary or the Treasurer/Chief Financial Officer.

This provision sets forth certain officers which are mandatory. These officers report to the Board. The Board may also select additional officers if it deems that it is necessary.

The officers of the Corporation will be elected annually by the Board, and each shall hold his or her office until he or she resigns, is removed, is otherwise disqualified to serve, or his or her successor is elected.

  
The Board elects officers annually.

Any Officer may be removed, either with or without cause, by a two-thirds (2/3) majority vote of all the members of the Board. Should any vacancy occur in any office as a result of death, resignation, removal, disqualification or any other cause, the Board may delegate the powers and duties of such office to any Officer or to any Director until such time as a successor for the office has been elected. 

The Board can remove an officer at any time by a two-thirds majority vote.

The Chairperson of the Board shall preside at all meetings of the Board, shall have the usual powers of a presiding officer and shall have such other duties as may be prescribed by the Board.

The President will be the Chief Executive Officer (CEO) of the Corporation in charge of all of its activities and business. The President shall serve as a member of the Board, and shall be entitled to attend any meeting of any committee. The President shall report annually to the Board on the current state of the Corporation and plans for the future. The President shall submit to the Board the annual budget of the Corporation for the next fiscal year at least three (3) months prior to the commencement of the fiscal year. The President will be empowered to call special meetings of the Board as set forth herein, and shall discharge all other duties as may be required by these Bylaws and from time to time may be assigned by the Board.

The Secretary shall keep or cause to be kept the minutes of the Board in one or more books provided for that purpose, will see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law, and in general perform all duties as from time to time may be prescribed by the President or the Board.

The Treasurer/Chief Financial Officer ("CFO") shall be the chief financial officer of the Corporation. If required by the Board, the CFO shall give a bond for the faithful discharge of his or her duties in such form and with such surety or sureties as the Board shall determine. The CFO shall have charge and custody of all the funds of the Corporation and shall keep or cause to be kept, in books belonging to the Corporation, full and accurate amounts of all receipts and disbursements, and shall deposit all money and other valuable effects in the name of the Corporation in such depositories as may be designated for that purpose by the Board. The CFO shall disburse the funds of the Corporation as may be ordered by the Board or the President and, whenever requested by them, shall deliver to the Board and the President an account of all his or her transactions as CFO and of the financial condition of the Corporation. The CFO shall be responsible for the Corporation's financial planning and forecasting and shall assist the President in the preparation of the Corporation's annual budget. The CFO shall coordinate and oversee the Corporation's funding, including any audits or other reviews of the Corporation or its Supporting Organizations. The CFO shall be responsible for all other matters relating to the financial operation of the Corporation.

The Chief Technology Officer shall advise the Board and the President on engineering and other technical issues related to the matters which they consider. 

Officers and Assistant Officers, in addition to those hereinabove described, who are elected or appointed by the Board, shall perform such duties as will be assigned to them by the President or the Board.

  
The compensation of any Officer of the Corporation shall be approved by the Board. Expenses incurred in connection with performance of their officer duties may be reimbursed to Officers upon approval of the President (in the case of Officers other than the President) or the Board.

  
The Corporation shall, to maximum extent permitted by the CNPBCL, indemnify each of its agents against expenses, judgments, fines, settlements and other amounts actually and reasonable incurred in connection with any proceeding arising by reason of the fact that any such person is or was an agent of the Corporation. For purposes of this Article, an "agent" of the Corporation includes any person who is or was a Director, Officer, employee or any other agent of the Corporation; or is or was serving at the request of the Corporation as a Director, Officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise. The Board may adopt a resolution authorizing the purchase and maintenance of insurance on behalf of any agent of the Corporation against any liability asserted against or incurred by the agent in such capacity or arising out of the agent's status as such, whether or not this Corporation would have the power to indemnify the agent against that liability under the provisions of this Article.

The Board may authorize any Officer or Officers, agent or agents, to enter into any contract or execute or deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. In the absence of a contrary Board authorization, contracts and instruments may only be executed by the following Officers: Chairperson of the Board, President, any Vice President, or the CFO. Unless authorized or ratified by the Board, no other Officer, agent or employee shall have any power or authority to bind the Corporation or to render it liable for any debts or obligations.

All funds of the Corporation not otherwise employed will be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select.

All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation will be signed by such Officer or Officers, agent or agents, of the Corporation and in such a manner as shall from time to time be determined by resolution of the Board.

No loans will be made by or to this Corporation and no evidences of indebtedness will be issued in its name unless authorized by a resolution of the Board. Such authority may be general or confined to specific instances; provided, however, that no loans will be made by the Corporation to its Directors or Officers. 

The fiscal year end of the Corporation shall be determined by the Board.

At the end of the fiscal year, the books of the Corporation will be closed and audited by certified public accountants. The appointment of the fiscal auditors will be the responsibility of the Board.

  
To ensure the proper handling of financial matters, an audit is required.

The CFO shall cause the annual report and the annual statement of certain transactions as required by the CNPBCL to be prepared and sent to each member of the Board and to such other persons as the Board may designate, no later than one hundred twenty (120) days after the close of the Corporation's fiscal year. The annual report and annual statement will also be made publicly available, on the Web Site and otherwise.

  
This provision requires the Corporation to prepare an annual report and annual statement and make these documents available on the Corporation's Web Site.

  
The Bylaws of the Corporation may be altered, amended, or repealed and new Bylaws adopted only upon action by two-thirds (2/3) majority vote of all members of the Board, except as provided in Article XIV below and except that any provision requiring a vote of more than two-thirds (2/3) of all members of the Board shall be changed only by such larger vote. These Bylaws will be reviewed at least annually, or more often if deemed necessary.

 
The bylaws may be amended only by a two-thirds majority vote by all members of the Board, thus ensuring that the established procedural protections are not subverted through an amendment to the bylaws. The super-majority vote requires substantial agreement among the various constituencies represented on the Board. This provision, however, recognizes that the Board does need some right to amend the bylaws to address unforeseen circumstances.

  
These Bylaws are intended to be transitional in nature and to aid in the initial governance of the Corporation. The Initial Board, acting by a vote of a majority of all the members of the Board, shall review and revise these Bylaws as it considers appropriate by October 1, 1999, provided that this deadline may be extended to October 1, 2000 by a vote of a majority of all the members of the Board, and provided further that these Bylaws shall remain in full force and effect until such time as they are amended or replaced.

  
This section expresses the intent that these bylaws are to be transitional in nature and charges the Initial Board, which will represent diverse stakeholders, with the duty of reviewing and revising these bylaws. This provision is important because it allows the Initial Board to determine by practical experience how the Corporation is best operated, and encourages early amendment of these bylaws to reflect both that practical experience and the ongoing dialog and consensus-building process that will continue past September 30, 1998.