Preview
Case Number:21-003808-CI
Filing # 132536155 E-Filed 08/12/2021 11:03:31 AM
IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT
IN AND FOR PINELLAS COUNTY, FLORIDA
PINELLAS COMMUNITY FOUNDATION
f/k/a PINELLAS COUNTY COMMUNITY
FOUNDATION,
Plaintiff,
Vv. Case No.
TRUIST BANK, solely as
trustee of certain unrestricted
endowment funds, and ASHLEY MOODY,
in her official capacity as Attorney
General of the State of Florida,
Defendants,
/
COMPLAINT FOR DECLARATORY JUDGMENT
Plaintiff, Pinellas Community Foundation, f/k/a Pinellas County Community Foundation
(“PCF”), hereby seeks declaratory judgment involving Defendants, Truist Bank, solely as trustee
of certain unrestricted endowment funds (“Truist”), and Ashley Moody, in her official capacity
as Attorney General of the State of Florida (the “Attorney General”), and states as follows:
Parties, Jurisdiction and Venue
1 PCF is a not-for-profit entity located and operating in Pinellas County, Florida.
2 Truist is trustee of certain unrestricted endowment funds administered in Pinellas
County, Florida.
3 The Attorney General may assert the rights of a qualified beneficiary with respect
to a charitable trust having its principal place of administration in this state and has standing to
assert such rights in any judicial proceeding pursuant to section 736.0110(3), Florida Statutes.
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***ELECTRONICALLY FILED 08/12/2021 11:03:28 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
4. Venue is appropriate in Pinellas County, Florida, where the PCF Trust (defined
below) has its principal place of administration pursuant to section 736.0204, Florida Statutes.
5 This Court has subject matter jurisdiction over the dispute pursuant to sections
736.0203 and 86.041, Florida Statutes.
6 This Court has personal jurisdiction over Defendants pursuant to sections
736.0202 and 86.091, Florida Statutes.
General Allegation:
7 PCF is a Florida not-for-profit entity, exempt from federal income tax, and
organized as a trust pursuant to the Pinellas County Community Foundation Trust Agreement,
dated as of January 1, 1969, as amended in 1971, 1993, 1998, 2006, 2007, 2008 and 2009 (the
“PCF Trust”; see Composite Exhibit “A”).
8 Pursuant to the PCF Trust, persons may donate cash or other property to PCF and
provide that it be held in an unrestricted fund, i.e., the cash or the proceeds from the sale of such
property may be distributed to other charities in a manner determined by PCF in its discretion.
9. Persons making donations to unrestricted funds sometimes limit the amount that
can be distributed to the net income realized annually by the fund (a “Net Income Limitation”).
10. Such unrestricted funds are held in trust pursuant to the terms of the PCF Trust.
11. Pursuant to the PCF Trust, persons making donations to PCF may designate a
corporate fiduciary as Trustee to hold and invest the cash or proceeds from the sale of donated
property for the benefit of, and use by, PCF.
12. Truist has been designated and is serving as Trustee for unrestricted funds subject
to a Net Income Limitation (the “Unrestricted Funds”; see Exhibit “B”).
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13. Because returns on fixed income investments have been at historically low levels
for several years, the amount that PCF can distribute to other charities from the Unrestricted
Funds with a Net Income Limitation has been and continues to be severely impaired.
14, The impairment negatively impacts: (a) the ability of PCF to make discretionary
distributions from restricted funds to other charities, (b) the ability of charities receiving
discretionary distributions from PCF to carry out their charitable purposes, and (c) the recipients
of funds or services from such charities, which is especially important as a result of the unusual
circumstances currently affecting the Pinellas County community, the State of Florida, our nation
and the world.
15. Section (8) of Article II of the PCF Trust provides that the Board of Governors
may order a variance from the direction by a donor regarding the application of all or any part of
the principal or income of a fund if the Board of Governors decides that conditions or
circumstances have changed since the direction by the donor as to manner of distribution such
that literal compliance with the direction is undesirable or not consistent with PCF effectively
serving the charitable needs of the Pinellas County community (the “Variance Power”).
16. PCF wishes to exercise its Variance Power to adopt a spending plan with respect
to the Unrestricted Funds with a Net Income Limitation, allowing PCF to distribute an amount
equal to a percentage of the market value of the assets in the Unrestricted Funds based on a 12-
quarter rolling average (the “Spending Plan”), as more fully set forth in the PCF Statement of
Investment Position dated November 17, 2020 (the “Statement of Investment Position”; see
Exhibit “C”).
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17. The Statement of Investment Position sets the Spending Plan at between three
percent (3.0%) and five percent (5.0%), with a target rate of four and one-quarter percent
(4.25%).
18. In order to provide sufficient fiduciary accounting income to support the
Spending Plan, in certain years Truist will have to exercise its power to adjust between principal
and income pursuant to section 738.104, Florida Statutes (the “Power to Adjust”).
19. Under the current terms of the PCF Trust, PCF can neither unilaterally exercise
the Power to Adjust nor direct Truist to exercise the Power to Adjust. Only Truist, as Trustee,
can exercise the Power to Adjust.
20. In accordance with section 736.04113, Florida Statutes, the Court may modify the
terms of an irrevocable trust, including specifically modifying terms governing the income and
principal ofa trust, if, because of circumstances not anticipated by the settlor, compliance with
the terms of the trust would substantially impair the accomplishment of a material purpose of the
trust.
21. In accordance with section 736.1406(1), Florida Statutes, the terms of a trust may
confer on a person (the “Trust Director”) the power to direct certain actions of the trustee (the
“Directed Trustee”) and the Directed Trustee must take reasonable action to comply with the
direction except to the extent that by complying the Directed Trustee would engage in willful
misconduct.
22. Because PCF has the discretion to make distributions from the Unrestricted Funds
for charitable purposes primarily in and for the benefit of the community of Pinellas County,
there are a multitude of current permissible distributees of trust income, and, therefore no
identifiable persons to consent to the proposed actions.
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23. All conditions precedent to this action have been performed or have occurred or
been waived.
24. PCF has retained the law firm of Dean, Mead, Egerton, Bloodworth, Capouano &
Bozarth, P.A., agreeing to pay a reasonable fee for legal services rendered.
COUNT I- DECLARATORY JUDGMENT
25. This is an action for declaratory judgment pursuant to Chapter 86, Florida
Statutes.
26. PCF re-alleges and incorporates herein paragraphs 1-24 above.
27. PCF has a bona fide, actual, present, practical need for a declaration that concerns
a present, ascertained or ascertainable state of facts or present controversy as to a state of facts.
28. The moder portfolio theory of investing: (a) suggests those investing funds
belonging to or held for the benefit of others invest such funds in a manner likely to maximize
the expected total return from income and appreciation for an acceptable level of risk, and (b)
provides that owning different kinds of assets is less risky that owning one or few types of assets.
Florida has adopted the theory with respect to both (a) charitable entities, other than trusts
subject to section 518.11, Florida Statutes, in section 617.2104, Florida Statutes (the “Florida
Uniform Prudent Management of Institutional Funds Act”; “UPMIFA”) and (b) trusts, in section
518.11, Florida Statutes (the “Prudent Investor Rule”).
29. UPMIFA provides, at section 617.2104(6)(d), Florida Statutes, as follows —
@) The circuit court for the circuit in which an institution is located,
upon application of that institution, may modify a restriction contained in
a gift instrument regarding the management or investment of an
institutional fund if the restriction has become impracticable or wasteful, if
it impairs the management or investment of the fund, or if, because of
circumstances not anticipated by the donor, a modification of a restriction
will further the purposes of the fund. The institution shall notify the
Attorney General of the application. To the extent practicable, any
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modification must be made in accordance with the donor’s probable
intention.
30. PCF is a trust subject to section 518.11, Florida Statutes, and, therefore, not
subject to the provisions of UPMIFA; however, the provisions of UPMIFA can provide
guidance, suggestions and evidence of best practices for trusts, such as PCF.
31. In keeping with the guidance of UPMIFA, PCF has named the Attorney General
as a Defendant in this action, such that if the Attorney General determines it necessary, the
Attorney General may assert the rights of the potential discretionary beneficiaries of the
Unrestricted Funds in this action.
32. As of this date, there are no fixed or determinable current or future beneficiaries
of the Unrestricted Funds.
33. Adoption of the Spending Plan by PCF would allow Truist to invest the
Unrestricted Funds in a manner designed to maximize the expected total return of the
Unrestricted Funds, without having to be concerned about the competing goals of (a) over-
weight fixed income investments in the investment portfolios of the Unrestricted Funds in an
attempt to provide an adequate and constant level of income to those Unrestricted Funds with a
Net Income Limitation and (b) maintaining or growing the inflation-adjusted value of the
Unrestricted Funds.
34. An immunity, power, privilege or right of PCF is dependent upon the facts or the
law applicable to the facts.
35. A person or persons have, or reasonably may have, an actual, present, adverse and
antagonistic interest in the subject matter, either in fact or law.
36. The antagonistic and adverse interests are all before the court by proper process or
class representation.
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37. The relief is not merely the giving of legal advice or the answer to questions
propounded for curiosity.
WHEREFORE, Plaintiff, Pinellas Community Foundation, f/k/a Pinellas County
Community Foundation, prays this Court to enter Judgment as follows:
(a) Declaring that the exercise of the Variance Power by PCF to adopt and implement
the Spending Plan with respect to the Unrestricted Funds subject to the Net
Income Limitation is authorized by the PCF Trust and Florida law;
(b) Declaring that the exercise of the Variance Power by PCF to adopt and implement
the Spending Plan with respect to the Unrestricted Funds subject to the Net
Income Limitation is appropriate under the circumstances;
©) Modifying the terms of the PCF Trust and any trust relationship applicable to any
of the Unrestricted Funds subject to the Net Income Limitation, pursuant to
section 736.04113, Florida Statues, to provide PCF, as the Trust Director, the
authority to direct Truist, as the Directed Trustee, at any time to exercise the
power to adjust between principal and income of the Unrestricted Funds subject to
the Net Income Limitation in accordance with the Spending Plan pursuant to
section 736.1406(1), Florida Statutes;
(d) Declaring that the exercise of the power to adjust between principal and income
of the Unrestricted Funds subject to the Net Income Limitation by Truist in order
to support the Spending Plan is authorized by Florida law;
() Declaring that the exercise of the power to adjust between principal and income
of the Unrestricted Funds subject to the Net Income Limitation by Truist in order
to support the Spending Plan is appropriate under the circumstances;
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@ Directing Truist to take reasonable action to comply with the directions of PCF
with respect to any direction to exercise the power to adjust between principal and
income of the Unrestricted Funds subject to the Net Income Limitation in
accordance with the Spending Plan, except to the extent that by complying Truist
would engage in willful misconduct;
(g) Confirming the legal fees and costs incurred by Truist and PCF in connection
with this action are appropriately payable out of the assets of the Unrestricted
Funds as proper costs of administration in accordance with the terms of the PCF
Trust and applicable law;
(h) Awarding costs as are equitable pursuant to section 86.081, Florida Statutes; and
@ Granting such further relief as may be deemed just and appropriate.
Dated: August 12, 2021
/s/ David P. Hathaway
DAVID P. HATHAWAY
Florida Bar No. 491411
DAVID J. AKINS
Florida Bar No. 454338
Dean, Mead, Egerton, Bloodworth,
Capouano & Bozarth, P.A.
Post Office Box 2346
Orlando, Florida 32802-2346
Telephone: (407) 841-1200
Facsimile: (407) 423-1831
thathaway@deanmead.com
Jakins@deanmead.com
smarshall@deanmead.con
probate@deanmead.cor
03380072.v1
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TABLE OF. CON ete
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Putpose and Definitions Page I
I Donors’ Gifts and Directions Page
I Trustees’ Powers and Duties \\ Page 3
i Iv Board of Governors’ Organization and Administation \ Page
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The Trustees’ Committee
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Pinellas County Community Foundation
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Each bank or trust company which caitses thi insteument or a duplicate of i¢ to be executed on its behalf
declares and agrees that all gifts accepted aid ‘received by it in trust under this Instrument shall be held and admin-
ered by it as Trustee, upon the folloving ttusts and terms:
v
- ARTICLE t
PURPOSE AND DEFINITIONS ,
Sec. (1). The purpose of Pinellas CountY Community Foundation is to receive and accept property to be admin-
istered under this Instrument exclusively for charitable purposes primarily in and for the benefit of the community
of Pinellas County, Flords, and the vicinity thetwof, including, for such purposes,
(a) The administration of funds given in teust for charitable purposes,
(b) ‘The making of distributions for such purposes in“accordance with the cerms of gifts, bequests, ot
devises to the Foundation not inconsistent with-the purposes“of this Insteument or in accordance with deter-
minations by the Board of Governors pursuant to. this instrument,
(©), The making of distributions to qualified charitable-orginizations, and
(@) Providing for distributions from time to time, from, property held under this Instrument in such
manner that charitable puzposes will be effectively served notwithstanding changed conditions that may have
arisen or will atise in the charitable needs of the area to be ved by“the Foundation from the time of the
original receipt of property by the Foundation from a dost.
Sec. (2). No part of the net earnings of the Foundation ‘hall inuée to the benefit of, ot be distributable to, any
Foundation Trustee, or to any officer, director or employee thereof, except that the Foundation shall be authorized
© and empowered to pay reasonable compensation for sstvices rendered and to make payments and distributions in
furtherance of the purposes set forth in Section (1) of Article I hertof. No substantial part of the activities of the
Foundation shall be the carrying on of propaganda, or otherwise attempting, to influence Legislation. ‘The Founda-
tion shall not participate in, or intervene in (including the publishing or distributing. of statements) any political
campaign on bebalf of any candidate for public office, \
Notwithstanding any other provision of this Instrument, the Foundation shall not ciety on any activities not
permitted to be carried on: \
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(a) By an organization exempt from Federal income tax under Section 501.(c) (3)-of the Internal Revenue
Code of 1954 (or the corresponding provision then in effect of any future United States Internal Revenue
law) or
/
(b) By an organ ion, contributions to which are deductible under Section 170(c) (2) of the Internal
Revenue Code of 1954 (or the corresponding provision then in effect of any ‘future Unio States, Internal
Revenue law). AN
Sec. (3). In this Instrument
(a) “Pinellas County Community Foundation” and“ “the Foundation” mean the Organization established
and funds held from time to time under this Instrument as from time to time amended,
So
(b) “Board of Governors” and ' “the Board” niean the Board of Governots of the Foundation from time
fo time in office pursuant to the terms of this Instrument, /
©) ‘Trustee’ means, and applies separately to, each bank and teust company which causes this Instru-
ment, or a duplicate to if, to be executed on its behalf, andl accepts and receives a gift to or for the use of the
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Foundation, and without necessity for Board approval, each such bank and trust company undec any later
extensions or amendments of its charter, and any corpotation with which it may merge or consolidate or which
is organized as its successor and takes over its business,
(A) “Charitable purposes ineans those purposes which are inclided in both:
(i) purposes for which under the law of the State of Florida property slay be held in trust free from
the tule against perpetuities) and
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(ii) charitable ‘pltposes under Section 501 (c) (3) of the United States Intetnal Revenue Code of
954 (or. the coreesponding provision then in effect of any future United States Internal Revenue law).
() ‘Qualified charitable “ofga ation” and “qualified etraritable organizations” mean an organization or
organizations for charitable purposes and qualified as exempt from Federal income tax under Section 50 (c) (3)
of the Internal Reyenue Code\ of 1954 (or the cottesponding provision then in effect of any ture Federal
income tax law). \ \
() “Donor” means the makeé of Any gift to at for use of the Foundation, whether an individual, corpo-
ration, partnership, trust or other persoli or organization,
(g) “Ford” means property ‘fe am ine o time held in trust hereunder regardless of the nature of the
property or its investment. \ “,
(h) “Gift” applies whether of monéy:6r other property of any kind, real, petsonal or mixed, or any
interest in propeity, and whether made. by delivery,
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grant, conveyance, payment, devise, bequest or any other
method of transfer, . ’ 7 7a
(i) "Pinellas County community mieans the aad of Pinellas County, Florida, and such surrounding areas
as the Board may from time to time determine,
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SARTICLECII
DONORS’ GIFTS AND DIRECTIONS
Sec. (1), Donors may make gifts to or for théu of the. Foundation by naming or otherwise identifying the
Foundation, whether or not a teustee is designated. A donor may designate one or more of the Trustees to hold and q
administer the gift, and if more than one, the portions of the-gift,to be held and adminigtored by each. In case of
failure of a donor to designate a Trustee or Trustees of such portions, or failure of a designated ‘Trustee to accept
a gift, the Board may in each case so far as necessary designate one ot, mére’of the Trustees to hold and administer,
the gift, and if sore than one, the portions to be held and administered by each,
Sec. (2). Each donor by making a gift to or for the use-of the Foundation accepts and age to all the terms
) of this Instrument, and provides that the fund so created shall be Subject co the provisions for presumption of donors’
intent, for vai ince from donors’ direction and for amendments and termination, and to all other teems of this Insteu-
ment as from time to time amended. \ a
See, (3). If a gift is made to a Foundation Trustee or other trustee in teus{ to“fake income o other payments
fot a period, of a life or lives or other period, to any individuals or for non-chatitable putposes, followed by pay-
ments to or for the use of che undation, or in trust to make income or other payments to ot for the use of the
Foundation, followed by payments to any individuals or for non-chatitable\purposes, only the payments to or For
the use of the Foundation shall be regarded as Foundation funds subject to this Instrument and only when the
Foundation becomes entitled to their use, but a Tastee or the Board may take’such actions as it from time to time
deems necessary to protect the Foundation’s rights to receive such payments. / \\
Sec, (4). Any donor may, with respect to a gift made by such donor to ot for the use of the Foundation, give
directions at the time of the gift as to the geographical limits for use of the gift, including use in of for areas within
or outside the Pinellas County community. Any donor may also, with respect to any gift of. Five Thousand Dollars
($5,000.00) or more, give directions as to: (a) field of charitable purposes or particular-chatitable’ orga’ tions
or purposes to be supported, (b) manner of distribution including amounts, times, and conditions of ‘payments and
whether ftom principal or income, (¢) a name as a memorial or otherwise for a fund given/or'addition to a fund
previously held, or anonymity for the gift, and (d) reasonable limits on or additions to investment or administrative
powers of a Trustee, x )
Sec. (5). All such directions by donors shall be followed exce pt as provided in Sections (7) and (8) of iia
Article [1,
a
Sec. (6). No gift shall be required to be separately invested or held unless the donor so directs, or it is’necessary
in order to follow any other direction by the donor as to. purpose, investment or administration, ot-in’ order to
Prevent tax disqualification, or is required by law. Directioits for naming a fund as a memorial of otherwise may
be Satisfied by keeping under such name accounts reflecting appropriately the interest of such fund in each common
oO investment.
See. (7) th fund of the Foundation shall be presumed to be intended (a) to be used only for charitable
Purposes, (b) to be productive of a reasonable return of net income which (except duridg the period referred to in
Section. (3) of this Article II) is to be distributed at least annually or if accumulated is to be accumalated. only in
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a reasonable amount and for a/reasonable period for a charitable purpose or purposes, and (c) to be used only for
such of those purposes and in such ‘manner as not to disqualify the gift from deduction as a charitable contribution,
gift or bequest in computing any. Federal income, gift or estaté tax of the donor or his estate and not to disqualify
Cc the Foundation from exemption from Federal income tax as a qualified charitable organization;
otherwise applied. If a direction’by, the denor, however expressed, would, if followed, resulti
and shall. nat be
use contrary to the
intent so presumed, of if the Trustee or the Board is advised by counsel that there is substantial risk of such result,
the direction shall not be followed, but-shall'be varied by the Board so far as necessary to avoid such result, except
thac if the donor has clearly stated that compliance with the direction is a condition of such gift, then the gift shall
not be accepted in case of such advice unless an appropriate judicial or administrative body first decermi e that the
condition and direction need not be followed. Reasonable charges and expenses of counsel for such advice and pro-
ceedings shall be proper expenses of administration,
Sec. (8). Whenever the Board of Governors decides that conditions or circumstances are such or have so.changed
since a direction by the donor as to purpose, of as,to manner of distribution or use, that literal compliance with the
direction is unnecessary, undesirable, impract al r.impossible, or the direction is nov consistent with the Foundation
primarily serving effectively the charitable weds ‘of the Pinellas County community, it may, by affirmative vote of
at least % of its members communicated ¢o the Trustee holding the fund, order such variance from the direction and
such application of the whole or any part of the principal or income of the fund to other charitable purposes, as in
its judgmenc will then more effectively serve such needs, Whenever the Trustee decides that a donor's direction as
to investment or administration has because of changed circumstances or conditions or experience proved impractical
or unreasonably onerous, and impedes effectual serving of sich needs, the Trustee may order variance from such
direction to such extent as in its judgment is necessary.
ARTICLE, HW
TRUSTEES’ POWERSAND. DUTIES
See, (1), Gifts to or for the use of the Foundation shall upon acceptance and receipt vest in the Trustee desig-
nated by the donor or by the Board, subject to the terms.of this”Insteument and to directions given or varied
pursuant to Article II. Whenever any Trustee is suceeded by another corporation through muryer ot consolidation
OQ or by a corporation organized as its successor taking over its business, che Foundation funds then held by i¢ shall
thereupon vest Likew! in the succeeding corporation, Any Trusteésmay at any time resi a as Trustee of any or all
funds it holds, by designating with approval of the Board another’ consenting Trustee and transferring the funds
to such Trustee, and the funds shall thereupon vest likewise in such ‘Trustee, and, the transferring rustee shall there-
upon be discharged from obligation for further administration thereof. 7 ee \
Sec. (2)... No Trustee shall be responsible for the validity of any gift received. Any Thaltee may decline to accept
any gift, but in such case shall promptly notify the Secretary of the Foundation so that another Trustee may be
designated if possible. If a doxtor’s direction would, if followed, result in use contrary to the intent presumed by
Section (7) of Article IT, or if a Trustee is advised by counsel that there is_substantial_risk of such result, the
‘Trustee may notify the Secretary of the Foundation and decline to accept the gift until“a.determination is obtained
as provided in said Section (7) or the direction is varied as provided in Article Il Bach Trustee upon acceptance
and veceipt of any gift to or for the use of the Foundation shall furnish the Secretary of the Foundation pa state-
ment of the property given and its value or estimated value and a copy of anty directions given by, thé donor, and in
case or receipt of property in a trust under which the Foundation has, ot may havea conti geat or vested terest
although not then accepted as a Foundation fund, a like statement and a copy of the instrument creating the tens,
Sec, (3). Solely for the puepose of cartying out the charitable purposes of the Foundations“each ‘Trustee shall
have, in addition to Trustee's powers under the law of the State of Florida and other powers granted by this Instru-
|i ment or by donor's directions, but subject to limita ns expressly provided by donor's directions and, the provisions
of Section (7) of Article IL hereof or other provisions of this Instrument, the following discretionary ‘powers with
respect to each fund held by it: / /
(a) to retain property in the form and condition in which it received, to invest and reinvest from/time
to time in any securities, obligations or other property of any kind i¢ may deem advisable, indi any
common trust fund maintained by it; 77
(b) to sell, lease for any period, convey,, transfer, exchange, deliver and dispose of all or aK patt of the
assets of any fund, and make contracts concerning any such assets, all at stich prices, for such terms as to credit
and otherwise and whether by public auction or private negotiation, as it deems best:
(©) to vote of refrain ftom, voting any corporate ot other setvirities; to give proxies; to exercise ot! sell
subscription rights and pay security assessments; fo consent to extension of reneival or refunding of obligations
and liens ot security therefor; to told property in its aame or the amé of a nominee without disclosing the
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interest of the Foundation exeept in its accounting: to participate in ecorganizations, members, ¢ olidations,
foreclosures and liquidations, and to join with other security holders in delegating authority to, depos! ng securities
and acting through, comn ees, depositories, voting trustees and the like, and receive and hold securities
€ oc property thereby received;.and to settle, compromise,
against any trust aséets, all as it deems best;
contest, prosecuce or abandon claims in favor of or
(a) to allocate receipts and disbu cients t0 p neipal or income in accordance with reasonable accounting
principles; 7 2 \\
(®) to execute and deliver téceipts, bil lls of sale, conveyances. assignments, transfers, powers of attorney,
contacts, releases, deeds of trust, mortgages*and other instruments incident to any transaction: and
(f) to employ attorneys and agents and special assistance as needed, and retain and pay reasonable com:
pensation for services and expenses thereof, ard to retain and rective for its seevices as Trustee such compen-
sation a is fair, reasonable and customary at.the.time, and as may be establi hed from time to time by advance
written agreements with the Board\and to charge’ all such amounts in equitable proportions to the funds held
by in, /
)
Sec. (4). No one dealing with any Trustee need quire concerning the va y of anything che Trustee pur-
ports to do, nor see to the application of anything paid or-transferred to or upon order of a Trustee, and anyone
dealing with any Trustee with respect to any asset“of,any fund may rely without inquiry upon the authority of
the Trustee in any action it purports to take, and Upon a-cértificate by any executive officer of the Trustee with
respect to any fact pertinent to any fund of funds, assetoc administeation,
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Sec, (5) ch Trustee shall quatterly certify tothe Secretary/of
the Foundation a statement showing the receipts
and disbursements of income and principal for the preceding quarter for each fund by it, and the amount, any, of
income available for distribution at the end of the quarter and after the end of each fiscal year shall similarly certify
an inventory of the capital assets of ach fund at the year end)with book values and its estimates of market values.
Sec. (6), Bach Trustee shall be subject to audits and inspection as provided in Article VII, and shall retain for
such audits and for a reasonable time thereafter invoices, receipts and other original records of transactions, and direc-
», tions from the Board for distribution, disbursements and accumulations,
O Se é (7). Each Trustee shall serve in a fiduciary capacity aid'shall
refrain from exercising any powers in such
manner as to disqualify the Foundation. from Federal income tax exemption as a qualified charitable organization or
any gift from deduction as a charitable contribution, gift or bequest in computing Federal income, gift or esate tax
of ‘the donor of his estate.
Sec, (8), No Trustee shall be liable for acts, ne iledte Or defailtd of any’ oxioee Tristan i of any employee, agent
oF representative selected with reasonable cate, nor for anything it may do or refrain from doing in good faith, includ-
ing the following if done in good faith: errors in judgment, ais done or committed on advice of counsel, or any
mistakes of fact or law.
5
ARTICLE IV { \
BOARD OF GOVERNORS' ORGANIZATIONAND ADMINIS" TRATION }
Sec. (1). The Board of Governors of the Foundation shall consist of United States Ci zens who reside in or
)
near Pinellas County, Florida. No person who is a salaried officer or employee of any Trustee or who is holding a
salaried public office shall be a member of said Board. Each Board member is to be selected for Anowledge\of the
educational, cultural, civic, moral, public and other charitable needs of che Pinellas County,,community and\shall
setve- without compensation except for reasonable expenses incurred for the Foundation, Members appointed’ by the
holder of any office or an officer or board member of an y other organization are to act in their own right and Hot
as reptesentative of any interest or group. //
Sec. (2). Nine regular members of the Boaed shall be appointed and elected as follows:
(a) One appointed by the President or governing body of the Pinellas Count ty Medical Societys sia wt
successor organization,
(>) One appointed by the Presidents or governing bodies of the Bar Associations of Pinellas County,
Oo acting jointly,
(©) One appointed by the President or governing body of the United Fund of Pinellas County, or its
successor orga: ization.
(@) One appointed by the Chairman of the County Commission of Pinellas County.
A
cen prise has sd ean
or. 3588 race 26
(e) One appointed wy ‘the Chaitman of the Pinellas County Board of Public Instruction.
(£) One ‘appointed by. thé Senior Circuit Judge of Pinellas County.
(g) One appointed” bythe Presidents or governing body or Bodies of the various chaptets of the League
of Women Voters in’ Pinellas County) acting jointly
(bh) ‘wo appointed by siajority vote of the Trustees’ Committee (as described in Axticle V).
Sec, (3).‘The regular members initially appointed or elected shall setye from appointment or election for the
following terms: Theee for five: years, three for, three years and three for one year, respectively, in the order above
fisted, and uncil the firse Board. ime: ing ‘of. the fiscal year followin; Thereaft x the terms of all regular members
shall be five years, Each regular member shall further continue in ofice until his successor is appointed or elected,
See, (4). Tf, in the judgment of the-régulir members, the purposes of the Foundation at any time would be
furthered by obtaining the setvices of any. person: of. persons as additional Board members, the Boatd may, by vote of
at least five regular members, clect not more thant cwo additional members who shall thereapon become members, with
the same powers as the other Board members, and shall serve for the term of office, not exceeding five years, specified
at time of election, Upon expiration of the term of any additional member it shall be optional with the regular
members whether to elect a successor. “»
See. (5). Members who by change af citizenabipy sgsidGace’ofite or employment cease to be qualified shall suto-
matically cease to be menibers. Failure without excuse acceptable to the Board to attend three consecutive regular
meetings of the Board shall operate as a resignation.“Vacancies by-death, 1 ignation, refusal to serve or otherwise
shall be filled for che unexpired term in the same manner asthe original’ appointment or election. If those entitled co
fill any vacancy by appointment fail to do so within sixty days after request by the Board, the Board may fill the
vacancy.
>
Sec. (6). In the event that an office of an organization having appointing authority shall cease to exist, then
the ‘Trustees’ Committee shall designate the holder of another office ot another organization to exercise the appointing
authority.
Preview
Case Number:21-003808-CI Filing # 132536155 E-Filed 08/12/2021 11:03:31 AM IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA PINELLAS COMMUNITY FOUNDATION f/k/a PINELLAS COUNTY COMMUNITY FOUNDATION, Plaintiff, Vv. Case No. TRUIST BANK, solely as trustee of certain unrestricted endowment funds, and ASHLEY MOODY, in her official capacity as Attorney General of the State of Florida, Defendants, / COMPLAINT FOR DECLARATORY JUDGMENT Plaintiff, Pinellas Community Foundation, f/k/a Pinellas County Community Foundation (“PCF”), hereby seeks declaratory judgment involving Defendants, Truist Bank, solely as trustee of certain unrestricted endowment funds (“Truist”), and Ashley Moody, in her official capacity as Attorney General of the State of Florida (the “Attorney General”), and states as follows: Parties, Jurisdiction and Venue 1 PCF is a not-for-profit entity located and operating in Pinellas County, Florida. 2 Truist is trustee of certain unrestricted endowment funds administered in Pinellas County, Florida. 3 The Attorney General may assert the rights of a qualified beneficiary with respect to a charitable trust having its principal place of administration in this state and has standing to assert such rights in any judicial proceeding pursuant to section 736.0110(3), Florida Statutes. 03380072.v1 ***ELECTRONICALLY FILED 08/12/2021 11:03:28 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** 4. Venue is appropriate in Pinellas County, Florida, where the PCF Trust (defined below) has its principal place of administration pursuant to section 736.0204, Florida Statutes. 5 This Court has subject matter jurisdiction over the dispute pursuant to sections 736.0203 and 86.041, Florida Statutes. 6 This Court has personal jurisdiction over Defendants pursuant to sections 736.0202 and 86.091, Florida Statutes. General Allegation: 7 PCF is a Florida not-for-profit entity, exempt from federal income tax, and organized as a trust pursuant to the Pinellas County Community Foundation Trust Agreement, dated as of January 1, 1969, as amended in 1971, 1993, 1998, 2006, 2007, 2008 and 2009 (the “PCF Trust”; see Composite Exhibit “A”). 8 Pursuant to the PCF Trust, persons may donate cash or other property to PCF and provide that it be held in an unrestricted fund, i.e., the cash or the proceeds from the sale of such property may be distributed to other charities in a manner determined by PCF in its discretion. 9. Persons making donations to unrestricted funds sometimes limit the amount that can be distributed to the net income realized annually by the fund (a “Net Income Limitation”). 10. Such unrestricted funds are held in trust pursuant to the terms of the PCF Trust. 11. Pursuant to the PCF Trust, persons making donations to PCF may designate a corporate fiduciary as Trustee to hold and invest the cash or proceeds from the sale of donated property for the benefit of, and use by, PCF. 12. Truist has been designated and is serving as Trustee for unrestricted funds subject to a Net Income Limitation (the “Unrestricted Funds”; see Exhibit “B”). 03380072.v1 13. Because returns on fixed income investments have been at historically low levels for several years, the amount that PCF can distribute to other charities from the Unrestricted Funds with a Net Income Limitation has been and continues to be severely impaired. 14, The impairment negatively impacts: (a) the ability of PCF to make discretionary distributions from restricted funds to other charities, (b) the ability of charities receiving discretionary distributions from PCF to carry out their charitable purposes, and (c) the recipients of funds or services from such charities, which is especially important as a result of the unusual circumstances currently affecting the Pinellas County community, the State of Florida, our nation and the world. 15. Section (8) of Article II of the PCF Trust provides that the Board of Governors may order a variance from the direction by a donor regarding the application of all or any part of the principal or income of a fund if the Board of Governors decides that conditions or circumstances have changed since the direction by the donor as to manner of distribution such that literal compliance with the direction is undesirable or not consistent with PCF effectively serving the charitable needs of the Pinellas County community (the “Variance Power”). 16. PCF wishes to exercise its Variance Power to adopt a spending plan with respect to the Unrestricted Funds with a Net Income Limitation, allowing PCF to distribute an amount equal to a percentage of the market value of the assets in the Unrestricted Funds based on a 12- quarter rolling average (the “Spending Plan”), as more fully set forth in the PCF Statement of Investment Position dated November 17, 2020 (the “Statement of Investment Position”; see Exhibit “C”). 03380072.v1 17. The Statement of Investment Position sets the Spending Plan at between three percent (3.0%) and five percent (5.0%), with a target rate of four and one-quarter percent (4.25%). 18. In order to provide sufficient fiduciary accounting income to support the Spending Plan, in certain years Truist will have to exercise its power to adjust between principal and income pursuant to section 738.104, Florida Statutes (the “Power to Adjust”). 19. Under the current terms of the PCF Trust, PCF can neither unilaterally exercise the Power to Adjust nor direct Truist to exercise the Power to Adjust. Only Truist, as Trustee, can exercise the Power to Adjust. 20. In accordance with section 736.04113, Florida Statutes, the Court may modify the terms of an irrevocable trust, including specifically modifying terms governing the income and principal ofa trust, if, because of circumstances not anticipated by the settlor, compliance with the terms of the trust would substantially impair the accomplishment of a material purpose of the trust. 21. In accordance with section 736.1406(1), Florida Statutes, the terms of a trust may confer on a person (the “Trust Director”) the power to direct certain actions of the trustee (the “Directed Trustee”) and the Directed Trustee must take reasonable action to comply with the direction except to the extent that by complying the Directed Trustee would engage in willful misconduct. 22. Because PCF has the discretion to make distributions from the Unrestricted Funds for charitable purposes primarily in and for the benefit of the community of Pinellas County, there are a multitude of current permissible distributees of trust income, and, therefore no identifiable persons to consent to the proposed actions. 03380072.v1 23. All conditions precedent to this action have been performed or have occurred or been waived. 24. PCF has retained the law firm of Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth, P.A., agreeing to pay a reasonable fee for legal services rendered. COUNT I- DECLARATORY JUDGMENT 25. This is an action for declaratory judgment pursuant to Chapter 86, Florida Statutes. 26. PCF re-alleges and incorporates herein paragraphs 1-24 above. 27. PCF has a bona fide, actual, present, practical need for a declaration that concerns a present, ascertained or ascertainable state of facts or present controversy as to a state of facts. 28. The moder portfolio theory of investing: (a) suggests those investing funds belonging to or held for the benefit of others invest such funds in a manner likely to maximize the expected total return from income and appreciation for an acceptable level of risk, and (b) provides that owning different kinds of assets is less risky that owning one or few types of assets. Florida has adopted the theory with respect to both (a) charitable entities, other than trusts subject to section 518.11, Florida Statutes, in section 617.2104, Florida Statutes (the “Florida Uniform Prudent Management of Institutional Funds Act”; “UPMIFA”) and (b) trusts, in section 518.11, Florida Statutes (the “Prudent Investor Rule”). 29. UPMIFA provides, at section 617.2104(6)(d), Florida Statutes, as follows — @) The circuit court for the circuit in which an institution is located, upon application of that institution, may modify a restriction contained in a gift instrument regarding the management or investment of an institutional fund if the restriction has become impracticable or wasteful, if it impairs the management or investment of the fund, or if, because of circumstances not anticipated by the donor, a modification of a restriction will further the purposes of the fund. The institution shall notify the Attorney General of the application. To the extent practicable, any 03380072.v1 modification must be made in accordance with the donor’s probable intention. 30. PCF is a trust subject to section 518.11, Florida Statutes, and, therefore, not subject to the provisions of UPMIFA; however, the provisions of UPMIFA can provide guidance, suggestions and evidence of best practices for trusts, such as PCF. 31. In keeping with the guidance of UPMIFA, PCF has named the Attorney General as a Defendant in this action, such that if the Attorney General determines it necessary, the Attorney General may assert the rights of the potential discretionary beneficiaries of the Unrestricted Funds in this action. 32. As of this date, there are no fixed or determinable current or future beneficiaries of the Unrestricted Funds. 33. Adoption of the Spending Plan by PCF would allow Truist to invest the Unrestricted Funds in a manner designed to maximize the expected total return of the Unrestricted Funds, without having to be concerned about the competing goals of (a) over- weight fixed income investments in the investment portfolios of the Unrestricted Funds in an attempt to provide an adequate and constant level of income to those Unrestricted Funds with a Net Income Limitation and (b) maintaining or growing the inflation-adjusted value of the Unrestricted Funds. 34. An immunity, power, privilege or right of PCF is dependent upon the facts or the law applicable to the facts. 35. A person or persons have, or reasonably may have, an actual, present, adverse and antagonistic interest in the subject matter, either in fact or law. 36. The antagonistic and adverse interests are all before the court by proper process or class representation. 03380072.v1 37. The relief is not merely the giving of legal advice or the answer to questions propounded for curiosity. WHEREFORE, Plaintiff, Pinellas Community Foundation, f/k/a Pinellas County Community Foundation, prays this Court to enter Judgment as follows: (a) Declaring that the exercise of the Variance Power by PCF to adopt and implement the Spending Plan with respect to the Unrestricted Funds subject to the Net Income Limitation is authorized by the PCF Trust and Florida law; (b) Declaring that the exercise of the Variance Power by PCF to adopt and implement the Spending Plan with respect to the Unrestricted Funds subject to the Net Income Limitation is appropriate under the circumstances; ©) Modifying the terms of the PCF Trust and any trust relationship applicable to any of the Unrestricted Funds subject to the Net Income Limitation, pursuant to section 736.04113, Florida Statues, to provide PCF, as the Trust Director, the authority to direct Truist, as the Directed Trustee, at any time to exercise the power to adjust between principal and income of the Unrestricted Funds subject to the Net Income Limitation in accordance with the Spending Plan pursuant to section 736.1406(1), Florida Statutes; (d) Declaring that the exercise of the power to adjust between principal and income of the Unrestricted Funds subject to the Net Income Limitation by Truist in order to support the Spending Plan is authorized by Florida law; () Declaring that the exercise of the power to adjust between principal and income of the Unrestricted Funds subject to the Net Income Limitation by Truist in order to support the Spending Plan is appropriate under the circumstances; 03380072.v1 @ Directing Truist to take reasonable action to comply with the directions of PCF with respect to any direction to exercise the power to adjust between principal and income of the Unrestricted Funds subject to the Net Income Limitation in accordance with the Spending Plan, except to the extent that by complying Truist would engage in willful misconduct; (g) Confirming the legal fees and costs incurred by Truist and PCF in connection with this action are appropriately payable out of the assets of the Unrestricted Funds as proper costs of administration in accordance with the terms of the PCF Trust and applicable law; (h) Awarding costs as are equitable pursuant to section 86.081, Florida Statutes; and @ Granting such further relief as may be deemed just and appropriate. Dated: August 12, 2021 /s/ David P. Hathaway DAVID P. HATHAWAY Florida Bar No. 491411 DAVID J. AKINS Florida Bar No. 454338 Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth, P.A. Post Office Box 2346 Orlando, Florida 32802-2346 Telephone: (407) 841-1200 Facsimile: (407) 423-1831 thathaway@deanmead.com Jakins@deanmead.com smarshall@deanmead.con probate@deanmead.cor 03380072.v1 COMPOSITE EXHIBIT “A” te — ah epic = 3 Sica Tseng ; a 71089899 econo aventne< 02 3588 me 20 \\ tenia 0 y\ € \\ Ju 23 3 seFH 7] hy > ti > My [ ( ) TRUST AGREEMENT \ PINELLAS COUNTY commptirity FOUNDATION ih 7 MASTER COPY © \\ \\ j) /] a fh /} // /L C a sa (1 bce anette artnet aS Fae hitemeestanmennneem ty OR, 3588 re 24. (\ > » 2 TABLE OF. CON ete \ \\. Putpose and Definitions Page I I Donors’ Gifts and Directions Page I Trustees’ Powers and Duties \\ Page 3 i Iv Board of Governors’ Organization and Administation \ Page )4 The Trustees’ Committee ( Page 5 H VI Distributions and Disbursements > Page> 6\ 4 | es Vil Audits and Reports (pase )\ ) S| Ks VL Amendnients and Teimination . page 1 \\ )) /) ll © es /} ete CS ie tdi MY \\ ({{/ ak, 3988 pve 22 Pinellas County Community Foundation q c \\ \\\\ JANUARY 1, 1969 ‘> Each bank or trust company which caitses thi insteument or a duplicate of i¢ to be executed on its behalf declares and agrees that all gifts accepted aid ‘received by it in trust under this Instrument shall be held and admin- ered by it as Trustee, upon the folloving ttusts and terms: v - ARTICLE t PURPOSE AND DEFINITIONS , Sec. (1). The purpose of Pinellas CountY Community Foundation is to receive and accept property to be admin- istered under this Instrument exclusively for charitable purposes primarily in and for the benefit of the community of Pinellas County, Flords, and the vicinity thetwof, including, for such purposes, (a) The administration of funds given in teust for charitable purposes, (b) ‘The making of distributions for such purposes in“accordance with the cerms of gifts, bequests, ot devises to the Foundation not inconsistent with-the purposes“of this Insteument or in accordance with deter- minations by the Board of Governors pursuant to. this instrument, (©), The making of distributions to qualified charitable-orginizations, and (@) Providing for distributions from time to time, from, property held under this Instrument in such manner that charitable puzposes will be effectively served notwithstanding changed conditions that may have arisen or will atise in the charitable needs of the area to be ved by“the Foundation from the time of the original receipt of property by the Foundation from a dost. Sec. (2). No part of the net earnings of the Foundation ‘hall inuée to the benefit of, ot be distributable to, any Foundation Trustee, or to any officer, director or employee thereof, except that the Foundation shall be authorized © and empowered to pay reasonable compensation for sstvices rendered and to make payments and distributions in furtherance of the purposes set forth in Section (1) of Article I hertof. No substantial part of the activities of the Foundation shall be the carrying on of propaganda, or otherwise attempting, to influence Legislation. ‘The Founda- tion shall not participate in, or intervene in (including the publishing or distributing. of statements) any political campaign on bebalf of any candidate for public office, \ Notwithstanding any other provision of this Instrument, the Foundation shall not ciety on any activities not permitted to be carried on: \ \ v (a) By an organization exempt from Federal income tax under Section 501.(c) (3)-of the Internal Revenue Code of 1954 (or the corresponding provision then in effect of any future United States Internal Revenue law) or / (b) By an organ ion, contributions to which are deductible under Section 170(c) (2) of the Internal Revenue Code of 1954 (or the corresponding provision then in effect of any ‘future Unio States, Internal Revenue law). AN Sec. (3). In this Instrument (a) “Pinellas County Community Foundation” and“ “the Foundation” mean the Organization established and funds held from time to time under this Instrument as from time to time amended, So (b) “Board of Governors” and ' “the Board” niean the Board of Governots of the Foundation from time fo time in office pursuant to the terms of this Instrument, / ©) ‘Trustee’ means, and applies separately to, each bank and teust company which causes this Instru- ment, or a duplicate to if, to be executed on its behalf, andl accepts and receives a gift to or for the use of the |© Foundation, and without necessity for Board approval, each such bank and trust company undec any later extensions or amendments of its charter, and any corpotation with which it may merge or consolidate or which is organized as its successor and takes over its business, (A) “Charitable purposes ineans those purposes which are inclided in both: (i) purposes for which under the law of the State of Florida property slay be held in trust free from the tule against perpetuities) and “4 {/ rimmed iia Sih iatntact a aes aecsees sash a \\\\ of, 3588 re 23 (ii) charitable ‘pltposes under Section 501 (c) (3) of the United States Intetnal Revenue Code of 954 (or. the coreesponding provision then in effect of any future United States Internal Revenue law). () ‘Qualified charitable “ofga ation” and “qualified etraritable organizations” mean an organization or organizations for charitable purposes and qualified as exempt from Federal income tax under Section 50 (c) (3) of the Internal Reyenue Code\ of 1954 (or the cottesponding provision then in effect of any ture Federal income tax law). \ \ () “Donor” means the makeé of Any gift to at for use of the Foundation, whether an individual, corpo- ration, partnership, trust or other persoli or organization, (g) “Ford” means property ‘fe am ine o time held in trust hereunder regardless of the nature of the property or its investment. \ “, (h) “Gift” applies whether of monéy:6r other property of any kind, real, petsonal or mixed, or any interest in propeity, and whether made. by delivery, = grant, conveyance, payment, devise, bequest or any other method of transfer, . ’ 7 7a (i) "Pinellas County community mieans the aad of Pinellas County, Florida, and such surrounding areas as the Board may from time to time determine, \ ¢} SARTICLECII DONORS’ GIFTS AND DIRECTIONS Sec. (1), Donors may make gifts to or for théu of the. Foundation by naming or otherwise identifying the Foundation, whether or not a teustee is designated. A donor may designate one or more of the Trustees to hold and q administer the gift, and if more than one, the portions of the-gift,to be held and adminigtored by each. In case of failure of a donor to designate a Trustee or Trustees of such portions, or failure of a designated ‘Trustee to accept a gift, the Board may in each case so far as necessary designate one ot, mére’of the Trustees to hold and administer, the gift, and if sore than one, the portions to be held and administered by each, Sec. (2). Each donor by making a gift to or for the use-of the Foundation accepts and age to all the terms ) of this Instrument, and provides that the fund so created shall be Subject co the provisions for presumption of donors’ intent, for vai ince from donors’ direction and for amendments and termination, and to all other teems of this Insteu- ment as from time to time amended. \ a See, (3). If a gift is made to a Foundation Trustee or other trustee in teus{ to“fake income o other payments fot a period, of a life or lives or other period, to any individuals or for non-chatitable putposes, followed by pay- ments to or for the use of che undation, or in trust to make income or other payments to ot for the use of the Foundation, followed by payments to any individuals or for non-chatitable\purposes, only the payments to or For the use of the Foundation shall be regarded as Foundation funds subject to this Instrument and only when the Foundation becomes entitled to their use, but a Tastee or the Board may take’such actions as it from time to time deems necessary to protect the Foundation’s rights to receive such payments. / \\ Sec, (4). Any donor may, with respect to a gift made by such donor to ot for the use of the Foundation, give directions at the time of the gift as to the geographical limits for use of the gift, including use in of for areas within or outside the Pinellas County community. Any donor may also, with respect to any gift of. Five Thousand Dollars ($5,000.00) or more, give directions as to: (a) field of charitable purposes or particular-chatitable’ orga’ tions or purposes to be supported, (b) manner of distribution including amounts, times, and conditions of ‘payments and whether ftom principal or income, (¢) a name as a memorial or otherwise for a fund given/or'addition to a fund previously held, or anonymity for the gift, and (d) reasonable limits on or additions to investment or administrative powers of a Trustee, x ) Sec. (5). All such directions by donors shall be followed exce pt as provided in Sections (7) and (8) of iia Article [1, a Sec. (6). No gift shall be required to be separately invested or held unless the donor so directs, or it is’necessary in order to follow any other direction by the donor as to. purpose, investment or administration, ot-in’ order to Prevent tax disqualification, or is required by law. Directioits for naming a fund as a memorial of otherwise may be Satisfied by keeping under such name accounts reflecting appropriately the interest of such fund in each common oO investment. See. (7) th fund of the Foundation shall be presumed to be intended (a) to be used only for charitable Purposes, (b) to be productive of a reasonable return of net income which (except duridg the period referred to in Section. (3) of this Article II) is to be distributed at least annually or if accumulated is to be accumalated. only in // /; // tite eli pty aedcnarelapetenemoenss teeta eS an _ if or. 3O88 nce 24 a reasonable amount and for a/reasonable period for a charitable purpose or purposes, and (c) to be used only for such of those purposes and in such ‘manner as not to disqualify the gift from deduction as a charitable contribution, gift or bequest in computing any. Federal income, gift or estaté tax of the donor or his estate and not to disqualify Cc the Foundation from exemption from Federal income tax as a qualified charitable organization; otherwise applied. If a direction’by, the denor, however expressed, would, if followed, resulti and shall. nat be use contrary to the intent so presumed, of if the Trustee or the Board is advised by counsel that there is substantial risk of such result, the direction shall not be followed, but-shall'be varied by the Board so far as necessary to avoid such result, except thac if the donor has clearly stated that compliance with the direction is a condition of such gift, then the gift shall not be accepted in case of such advice unless an appropriate judicial or administrative body first decermi e that the condition and direction need not be followed. Reasonable charges and expenses of counsel for such advice and pro- ceedings shall be proper expenses of administration, Sec. (8). Whenever the Board of Governors decides that conditions or circumstances are such or have so.changed since a direction by the donor as to purpose, of as,to manner of distribution or use, that literal compliance with the direction is unnecessary, undesirable, impract al r.impossible, or the direction is nov consistent with the Foundation primarily serving effectively the charitable weds ‘of the Pinellas County community, it may, by affirmative vote of at least % of its members communicated ¢o the Trustee holding the fund, order such variance from the direction and such application of the whole or any part of the principal or income of the fund to other charitable purposes, as in its judgmenc will then more effectively serve such needs, Whenever the Trustee decides that a donor's direction as to investment or administration has because of changed circumstances or conditions or experience proved impractical or unreasonably onerous, and impedes effectual serving of sich needs, the Trustee may order variance from such direction to such extent as in its judgment is necessary. ARTICLE, HW TRUSTEES’ POWERSAND. DUTIES See, (1), Gifts to or for the use of the Foundation shall upon acceptance and receipt vest in the Trustee desig- nated by the donor or by the Board, subject to the terms.of this”Insteument and to directions given or varied pursuant to Article II. Whenever any Trustee is suceeded by another corporation through muryer ot consolidation OQ or by a corporation organized as its successor taking over its business, che Foundation funds then held by i¢ shall thereupon vest Likew! in the succeeding corporation, Any Trusteésmay at any time resi a as Trustee of any or all funds it holds, by designating with approval of the Board another’ consenting Trustee and transferring the funds to such Trustee, and the funds shall thereupon vest likewise in such ‘Trustee, and, the transferring rustee shall there- upon be discharged from obligation for further administration thereof. 7 ee \ Sec. (2)... No Trustee shall be responsible for the validity of any gift received. Any Thaltee may decline to accept any gift, but in such case shall promptly notify the Secretary of the Foundation so that another Trustee may be designated if possible. If a doxtor’s direction would, if followed, result in use contrary to the intent presumed by Section (7) of Article IT, or if a Trustee is advised by counsel that there is_substantial_risk of such result, the ‘Trustee may notify the Secretary of the Foundation and decline to accept the gift until“a.determination is obtained as provided in said Section (7) or the direction is varied as provided in Article Il Bach Trustee upon acceptance and veceipt of any gift to or for the use of the Foundation shall furnish the Secretary of the Foundation pa state- ment of the property given and its value or estimated value and a copy of anty directions given by, thé donor, and in case or receipt of property in a trust under which the Foundation has, ot may havea conti geat or vested terest although not then accepted as a Foundation fund, a like statement and a copy of the instrument creating the tens, Sec, (3). Solely for the puepose of cartying out the charitable purposes of the Foundations“each ‘Trustee shall have, in addition to Trustee's powers under the law of the State of Florida and other powers granted by this Instru- |i ment or by donor's directions, but subject to limita ns expressly provided by donor's directions and, the provisions of Section (7) of Article IL hereof or other provisions of this Instrument, the following discretionary ‘powers with respect to each fund held by it: / / (a) to retain property in the form and condition in which it received, to invest and reinvest from/time to time in any securities, obligations or other property of any kind i¢ may deem advisable, indi any common trust fund maintained by it; 77 (b) to sell, lease for any period, convey,, transfer, exchange, deliver and dispose of all or aK patt of the assets of any fund, and make contracts concerning any such assets, all at stich prices, for such terms as to credit and otherwise and whether by public auction or private negotiation, as it deems best: (©) to vote of refrain ftom, voting any corporate ot other setvirities; to give proxies; to exercise ot! sell subscription rights and pay security assessments; fo consent to extension of reneival or refunding of obligations and liens ot security therefor; to told property in its aame or the amé of a nominee without disclosing the A enna — neat eetnina om es _- a mena )\ (( ox 3588 me 25 interest of the Foundation exeept in its accounting: to participate in ecorganizations, members, ¢ olidations, foreclosures and liquidations, and to join with other security holders in delegating authority to, depos! ng securities and acting through, comn ees, depositories, voting trustees and the like, and receive and hold securities € oc property thereby received;.and to settle, compromise, against any trust aséets, all as it deems best; contest, prosecuce or abandon claims in favor of or (a) to allocate receipts and disbu cients t0 p neipal or income in accordance with reasonable accounting principles; 7 2 \\ (®) to execute and deliver téceipts, bil lls of sale, conveyances. assignments, transfers, powers of attorney, contacts, releases, deeds of trust, mortgages*and other instruments incident to any transaction: and (f) to employ attorneys and agents and special assistance as needed, and retain and pay reasonable com: pensation for services and expenses thereof, ard to retain and rective for its seevices as Trustee such compen- sation a is fair, reasonable and customary at.the.time, and as may be establi hed from time to time by advance written agreements with the Board\and to charge’ all such amounts in equitable proportions to the funds held by in, / ) Sec. (4). No one dealing with any Trustee need quire concerning the va y of anything che Trustee pur- ports to do, nor see to the application of anything paid or-transferred to or upon order of a Trustee, and anyone dealing with any Trustee with respect to any asset“of,any fund may rely without inquiry upon the authority of the Trustee in any action it purports to take, and Upon a-cértificate by any executive officer of the Trustee with respect to any fact pertinent to any fund of funds, assetoc administeation, cjz Sec, (5) ch Trustee shall quatterly certify tothe Secretary/of the Foundation a statement showing the receipts and disbursements of income and principal for the preceding quarter for each fund by it, and the amount, any, of income available for distribution at the end of the quarter and after the end of each fiscal year shall similarly certify an inventory of the capital assets of ach fund at the year end)with book values and its estimates of market values. Sec. (6), Bach Trustee shall be subject to audits and inspection as provided in Article VII, and shall retain for such audits and for a reasonable time thereafter invoices, receipts and other original records of transactions, and direc- », tions from the Board for distribution, disbursements and accumulations, O Se é (7). Each Trustee shall serve in a fiduciary capacity aid'shall refrain from exercising any powers in such manner as to disqualify the Foundation. from Federal income tax exemption as a qualified charitable organization or any gift from deduction as a charitable contribution, gift or bequest in computing Federal income, gift or esate tax of ‘the donor of his estate. Sec, (8), No Trustee shall be liable for acts, ne iledte Or defailtd of any’ oxioee Tristan i of any employee, agent oF representative selected with reasonable cate, nor for anything it may do or refrain from doing in good faith, includ- ing the following if done in good faith: errors in judgment, ais done or committed on advice of counsel, or any mistakes of fact or law. 5 ARTICLE IV { \ BOARD OF GOVERNORS' ORGANIZATIONAND ADMINIS" TRATION } Sec. (1). The Board of Governors of the Foundation shall consist of United States Ci zens who reside in or ) near Pinellas County, Florida. No person who is a salaried officer or employee of any Trustee or who is holding a salaried public office shall be a member of said Board. Each Board member is to be selected for Anowledge\of the educational, cultural, civic, moral, public and other charitable needs of che Pinellas County,,community and\shall setve- without compensation except for reasonable expenses incurred for the Foundation, Members appointed’ by the holder of any office or an officer or board member of an y other organization are to act in their own right and Hot as reptesentative of any interest or group. // Sec. (2). Nine regular members of the Boaed shall be appointed and elected as follows: (a) One appointed by the President or governing body of the Pinellas Count ty Medical Societys sia wt successor organization, (>) One appointed by the Presidents or governing bodies of the Bar Associations of Pinellas County, Oo acting jointly, (©) One appointed by the President or governing body of the United Fund of Pinellas County, or its successor orga: ization. (@) One appointed by the Chairman of the County Commission of Pinellas County. A cen prise has sd ean or. 3588 race 26 (e) One appointed wy ‘the Chaitman of the Pinellas County Board of Public Instruction. (£) One ‘appointed by. thé Senior Circuit Judge of Pinellas County. (g) One appointed” bythe Presidents or governing body or Bodies of the various chaptets of the League of Women Voters in’ Pinellas County) acting jointly (bh) ‘wo appointed by siajority vote of the Trustees’ Committee (as described in Axticle V). Sec, (3).‘The regular members initially appointed or elected shall setye from appointment or election for the following terms: Theee for five: years, three for, three years and three for one year, respectively, in the order above fisted, and uncil the firse Board. ime: ing ‘of. the fiscal year followin; Thereaft x the terms of all regular members shall be five years, Each regular member shall further continue in ofice until his successor is appointed or elected, See, (4). Tf, in the judgment of the-régulir members, the purposes of the Foundation at any time would be furthered by obtaining the setvices of any. person: of. persons as additional Board members, the Boatd may, by vote of at least five regular members, clect not more thant cwo additional members who shall thereapon become members, with the same powers as the other Board members, and shall serve for the term of office, not exceeding five years, specified at time of election, Upon expiration of the term of any additional member it shall be optional with the regular members whether to elect a successor. “» See. (5). Members who by change af citizenabipy sgsidGace’ofite or employment cease to be qualified shall suto- matically cease to be menibers. Failure without excuse acceptable to the Board to attend three consecutive regular meetings of the Board shall operate as a resignation.“Vacancies by-death, 1 ignation, refusal to serve or otherwise shall be filled for che unexpired term in the same manner asthe original’ appointment or election. If those entitled co fill any vacancy by appointment fail to do so within sixty days after request by the Board, the Board may fill the vacancy. > Sec. (6). In the event that an office of an organization having appointing authority shall cease to exist, then the ‘Trustees’ Committee shall designate the holder of another office ot another organization to exercise the appointing authority.