Well, it’s about that time again. The annual membership meeting is coming up in November and will be an “out meeting” at Breakside Brewery. There are a number of important items to discuss, including two significant proposed additions to the club’s Bylaws. You can review the full Bylaws document on the club website 


This article will address the two changes unanimously recommended by the board. Both changes involve the, relatively dry, mechanics and governance of the board (pun intended). So, in the interest of having an enjoyable out-meeting at Breakside, I would like to encourage members to use the Forum to bring up any questions or concerns for open discussion. 

First, the board proposes a change to the process for removal of a board member.

How Things Are:
Currently the involuntary removal of a board member requires a vote of the membership.

The Proposed Change:
(Proposed new Article 5, Section 5(c))
If a majority of the remaining members on the Board of Directors agree that a board member has failed to perform his or her responsibilities, or for any other reason agree that the board member’s continued term in office will not serve the best interests of the Brew Crew, they may recommend the board member’s removal to the membership, or, at their discretion, may remove the director by unanimous vote.

Second, as you already know (if you attended the Widmer meeting or read the minutes), the board has been evaluating and tightening up loose ends with regard to liability exposure for the club. In July, the membership approved spending additional funds to purchase the appropriate liquor liability insurance to cover the club if there is a personal injury or property damage claim against the club. As you also know, every year $200 of your club dues are set aside for the Compassion Fund, which is available to pay for a member’s cab fare to get them home from a club sponsored event and back to their car the following day. Board members make special efforts to see to it that members get home safe from club events and members do a great job of looking out for one another, but it only makes sense for the board to acknowledge that a claim is really a matter of probability, a question of when, not if.

How Things Are:
The Oregon Nonprofit Corporation Act generally protects volunteer directors against liability for all but gross negligence or intentional misconduct. The Act also requires the corporation to indemnify a director for expenses incurred in a successful defense. (Oftentimes each director is named as defendant along with the corporation because the plaintiff wants to be able to reach into as many pockets as possible for compensation.) In other words, a director can be sued, along with the club, but if the director successfully defends the lawsuit the club is usually legally obligated to pay the director’s expenses that they incurred in that defense, including legal fees. Despite this protection, however, the financial burden of hiring an attorney to mount a legal defense may be too much for an individual director to take on personally, since the club would only cover the cost after the director has “won” the suit. This can also have a chilling effect on people being willing to volunteer for board positions because
of the potential liability exposure. Even if you have done nothing wrong, you can still be named as a defendant in a lawsuit just because you are a board member.

The Proposed Change:
The board submits for the approval of the membership that the club should not have to wait for a director to win a lawsuit before aiding in their defense, but rather it is in the club’s interest to protect its directors when a lawsuit is filed. The following language of the proposed amendment to the club Bylaws accomplishes that goal, but is necessarily somewhat verbose because it tracks the requirements of the statute.

(Proposed new Article 5, Section 7)
Indemnification. The Oregon Brew Crew shall indemnify to the fullest extent not prohibited by law any current or former director of the Oregon Brew Crew who is made, or threatened to be made, a party to an action, suit, or proceeding, whether civil, criminal, administrative, investigative, or otherwise (including an action, suit, or proceeding by or in the right of the Oregon Brew Crew), by reason of the fact that the person is or was a director of the Oregon Brew Crew. The Oregon Brew Crew shall pay for or reimburse the reasonable expenses incurred by any such current or former director in any such proceeding in advance of the final disposition of the proceeding if the person sets forth in writing (a) the person’s good-faith belief that the person is entitled to indemnification under this provision, (b) the person’s reasonable belief that the individual’s conduct was in the best interests of the Oregon Brew Crew, or at least was not opposed to the Oregon Brew Crew’s best interests, (c) In the case of a criminal proceeding, that the person did not have reasonable cause to believe the conduct of the person was unlawful, and (d) the person’s agreement to repay all advances if it is ultimately determined that the person is not entitled to indemnification under this provision. Terminating a proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or the equivalent of nolo contendere does not, of itself, determine that the director did not meet the standard of conduct described in this section. No amendment to this provision that limits the Oregon Brew Crew’s obligation to indemnify any person shall have any effect on such obligation for any act or omission that occurs before the later of the effective date of the amendment or the date notice of the amendment is given to the person. This provision shall not be deemed exclusive of any other provisions for indemnification or advancement of expenses of directors, officers, employees, agents, and fiduciaries that may be included in any statute, agreement, general or specific action of the board of directors, vote of the members, or other document or arrangement. Provided however, the Oregon Brew Crew may not indemnify a director under this section in connection with: (a) A proceeding by or in the right of the Oregon Brew Crew in which the director was adjudged liable to the Oregon Brew Crew; or (b) A proceeding involving charges or claims of improper receipt of a personal benefit by a director or which adjudged the director liable for improperly receiving a personal benefit. Indemnification permitted under this section in connection with a proceeding by or in the right of the Oregon Brew Crew is limited to reasonable expenses incurred in connection with the proceeding.

The proposed amendments to the Bylaws will be voted on at the annual membership meeting at Breakside Brewery on November 14, 2013 at 7:00, but I would encourage that we take care of the dry stuff on the Forum and enjoy the cold, wet cups at Breakside.